Child Support

Child Support Scheme

Contact costs considered

In regards to child maintenace, the Child Support Agency needs to consider how many overnights the child/ren spend with each parent. But there are many other considerations.

  • Non - resident parents that receive a Centrelink benefit, who have care of their child more than one night per week are eligible to receive a portion of the parenting payment (or Family Tax Benefit FTB)
  • 'Income cap' used to calculate the maximum of Child Support of just over $100,000
  • Where a parent's income is significantly reduced, the CSA can take more factors into consideration when deciding how much Child Support should be paid For example: when a parent needs to care for a family member, or health related issues
  • Payers and payees may seek a change of assessment.

Determining where the money goes

  • Payers can determine where the money goes. Prescribed Non - Agency payments credit can be up to 30%. These refer to payments made directly to payees or third parties e.g. school fees.
  • Minimum payments. The minimum is $7 per week. Indexed to CPI yearly.

 Appealing CSA decisions to the Social Securities Appeals Tribunal (SSAT)

Parents who object to CSA decisions will need to lodge their appeal through SSAT

  1. Internal review by the CSA
  2. Apply SSAT for review of objected decision
  3. 28 days after the CSA decision to lodge an appeal
  4. Can ask SSAT for an extension of time
  5. SSAT has no fees
  6. SSAT has 2 panel members
  • Other parent is notified
  • SSAT and both parents provided with all relevant documents from CSA
  • SSAT will conduct a hearing with both parents
  • No lawyer is necessary
  • SSAT decisions cannot be reviewed. Can appeal to the courts on a question of law.

 

 Child Support and the Courts

  • Parents can ask the court to enforce payments whilst the CSA continues to collect
  • Courts have broad powers to make orders for temporary arrangements while examining a case
  • Courts will be able to order re-payments to payers who have successfully disputed paternity

 

Time to work out parenting arrangements

  • Parents now have 13 weeks to work out parenting arrangements in order to claim Family Tax Benefits

Changes to Assessment Rules

  • Changes to reasons under which parents can apply for a Change of Assessment
  • Where high cost of contact was taken into account and contact has not been exercised
  • Step parent income to be taken into account where the relationship is over 2 years (defacto/marriage)
  • Parent is unwilling to work
  • Parent has reduced income below the level of normal full time work in that industry
  • Reduction of work not justified on the basis of caring responsibilities or parent's state of health

Centrelink

  • Child Support Assessment and FTB use the same definition for income.
  • That means the income used to calculate Child Support assessments include certain tax free pensions and benefits
  • Parents who care for their children between 14% - 34% (between 2 - 5 nights per fortnight) have 24% credited against their CS payment
  • Are not eligible for a share of the FTB
  • Are able to retain their Health Care Card, Rental Assistance and the Medicare Safety Net.
  • Only the paid chidl support will be used to work out the FTB Part A.

CSA formula

  • Based on the best estimated amount that parents on average spend on their children
  • Both parent's income is taken into account
  • Older children cost more than younger children
  • Looks at the cost of care of children for both parents
  • Takes into account children from 1st and subsequent relationships

The Formula

Based on the cost of raising children on Australian research showing older children cost more.

Uses and income share approach

  • Both parents will have the first $21,000 (approx) discounted (1/3 of Male Average Weekly Earnings)
  • The cost of the children calculated from combined incomes
  • This cost will be divided between the parents in proportions equal to their share of combined income
  • 14 - 34% care : 24% costs are met
  • 34 - 49% care : 25% costs are met
  • 50% shared care : equal share of costs

Formula

  • Find the adjusted taxable income for both parents
  • Calculate child support for each parent
  • Calculate the cost of the child using combined child support income of both parents
  • Apportion the cost of the child with the parent's capacity to pay; that is their share of the child support income
  • Adjust for the amount of time the child spends with each parent.