Child support is governed by the provisions of the Child Support (Assessment) Act and the Child Support (Collections) Act. The CS(A)A provides a statutory formula based on studies of costs of living for children, based on the respective incomes of the parents and based on children’s ages and time they spend with each parent or carer.
Parents or carers can agree about levels of child support informally or via a child support agreement or binding child support agreement. A child support agreement or binding child support agreement binds the parties to those agreements and oust the jurisdiction of the Child Support (Assessment) Act from assessing child support.
A Child Support Agreement or Binding Child Support Agreement can only be set aside by the Court in certain circumstances.
In addition to Child Support Agreement or Binding Child Support Agreement, parties can enter into a Child Maintenance Trust (“CMT”) which allows child support to be made on behalf of children.
A CMT segregates cash or assets separate from the parties so as to provide ongoing support for the children of the relationship. Funds settled on the CMT can be borrowed by the contributor on commercial terms provided the capital ultimately is repaid and benefit or be settled on the children. The advantages of a CMT are that it:
- provides asset protection from creditors attacking the parents’ assets;
- leaves an estate for the children when they reach the vesting age (say 18 years old);
- secures future maintenance arrangements that gives certainty to all parties involved; and
- provides tax advantages to the contributor or settlor of the CMT.
Alternatively, a parent or carer may apply for assessment of child support to the Child Support Agency (CSA). The assessment will follow the statutory formula.
Indications about child support levels under the statutory formula can be obtained by keying relevant information into the calculator at https://processing.csa.gov.au/estimator/About.aspx.
Once an assessment is made, an application for change-of-assessment can also be made to the CSA. Such an application must be based on special circumstances and one or more of ten grounds. Briefly, those grounds are:
- high costs of communicating or spending time with a child/children;
- costs associated with special needs;
- costs of education or training;
- child’s/children’s income or resources;
- property or assets transferred;
- high child-care costs (for children under twelve);
- necessary expenses reduce capacity to support;
- unfairness arising from earning capacity, assets or resources;
- legal duty to maintain another (or others);
- responsibility for resident (other) child.
In certain circumstances, applications for departure from a child support assessment made be made to a tribunal or court.
The above is necessarily a very brief and general summary of processes that can be more complex. There are many important cases that deal with child support. While we like to talk about those cases, it is difficult to know where to start or what particular aspects or topics to cover in notes like these. It is probably better to call us on (Sydney) 9222 8000 to ask about those aspects or topics that relate to your particular circumstances.
See Child support
- Child maintenance
Child maintenance pre-dates child support. It is not generally available where child support is. It may continue to apply in circumstances where maintenance is warranted in relation to an adult child (unable to complete education or suffering disability) or where child support is not available.
The above is necessarily a very brief and general summary of processes that can be more complex. There are a number of important cases that deal with child maintenance. While we like to talk about those cases, it is difficult to know where to start or what particular aspects or topics to cover in notes like these. It is probably better to call us on (Sydney) 9222 8000 to ask about those aspects or topics that relate to your particular circumstances.