When parents separate it is common for no agreement (even an informal one) to be in place about family law matters; including child support.
Often there is no agreement simply because parents are unaware of some or all of these matters. Why? Because separation isn’t something you experience often. Furthermore, these matters are not always common knowledge.
This post aims to summarise the different child support options for separated parents to consider.
We also provide some practical tips about how to limit confusion, anxiety and conflict which can occur following separation.
What is child support?
Child support is a payment made by a parent for the financial benefit of children following the end of a marriage or relationship. The duty as a parent to pay for their child will generally end when the child turns 18.
What are the different options?
As a first step, parents need to decide how they want child support to be managed.
Option 1 – Applying for an administrative assessment
The most common option chosen by parents is an administrative assessment.
A parent can apply to the Department of Human Services (otherwise known as the Child Support Agency or CSA) for an administrative assessment.
The CSA applies a set formula to calculate an administrative assessment. Ultimately, the CSA will consider eight factors in the formula, with the most significant of these being:
- The age of the children;
- The amount of time the children spend with each parent; and
- The adjusted taxable income of both parents.
Please see link to the CSA’s Child Support Estimator. This estimator can help parents work their likely child support entitlement or payment.
The problems we regularly observe with parents (both the parents receiving child support and the paying parents) subject to administrative assessments are:
- Parents get into disputes about the payment of other significant costs for the children (known as non-agency payments) that are not ordinarily taken into account as part of the assessment,such as:
- private school fees;
- child care fees;
- medical and dental expenses;
- private health insurance premiums;
- other out of pocket expenses; and
- extra-curricular activities.
- A receiving parent will refuse time between the children and the paying parent because it will reduce the child support they receive;
- A paying parent will deliberately try to escape their child support obligations by stopping work altogether, working for cash and/or not lodging tax returns, indefinitely; or
- A paying parent does not see the child support being put towards the children.
Some of these problems can be difficult to resolve. If you or someone you know is experiencing any of these problems, we strongly urge that person to seek legal advice about their options.
Option 2 – Making a child support agreement
Another option is a Child Support Agreement (Agreement), which is a contract that is entered into between parents and that sets out the financial support that each parent will pay for their children.
This option essentially allows parents to make their own private arrangements and agree on what they consider to be a fair level of financial support for their children.
- All of the children’s costs can be taken into account and agreed upon;
- Parents will have contractual obligations to make the agreed payments and if they do not, there will be legal repercussions;
- Payments can be made directly to third parties like schools to ensure certainty that the child support is benefiting the children;
- Parents may not feel they have to refuse time or escape their child support obligations.
There are advantages and disadvantages in entering into an Agreement depending on a parties’ own set of circumstances and what they are hoping to achieve. These Agreements may not be suitable for everyone and it is a requirement that parents obtain independent legal advice.
Option 3 – Self-management
Parents can manage the payment of child support between themselves.
The problems with this arrangement are:
- a parent can stop making payments at any stage without consequence and it can be difficult to recover unpaid amounts;
- a parent can seek to change the arrangement at any time; and
- if the parents self-manage, they are unable to receive more than the base rate of Family Tax Benefit Part A.
In our experience, this option may be used for a short time after separation; however, it is rarely used long term.
Option 4 – Court ordered
A Court may make an order for child maintenance when a child is over 18 if that child has a disability or is seeking further education.
If you have a court order, you can ask the CSA to collect the court ordered amount.
Take Away Message
Parents should seek legal advice about which child support option will suit their situation.
At the same time, advice should also be obtained about other family law matters that may arise from separation, including:
People who are informed about their rights, responsibilities and options available to them will experience less confusion, anxiety and conflict. They will also have a much greater chance of reaching an agreement.
The information contained on this site is for general guidance only. No person should act or refrain from acting on the basis of such information. You should seek appropriate professional advice based upon your particular circumstances.