If you do not have an informal arrangement or agreement as to child support, the formal system of child support is calculated and implemented by Services Australia. The child support formula in Australia is a complex system that is designed to ensure that both parents contribute to the financial support of their children after separation. The formula takes into account a number of factors, including the parents’ income, the amount of time each parent spends with the children, and the children’s needs.
The child support formula is based on the following principles:
- Both parents have a responsibility to financially support their children.
- The amount of child support that is payable should be based on the parents’ ability to pay.
- The amount of child support that is payable should be based on the needs of the children.
The child support formula is not a set amount. The amount of child support that is payable will vary depending on the individual circumstances of each case. However, the formula provides a starting point for calculating child support.
The child support formula is made up of the following steps:
- Work out each parent’s child support income. This is the amount of income that each parent has available to contribute to child support.
- Work out the parents’ combined income. This is the total amount of income that both parents have available to contribute to child support.
- Work out each parent’s income percentage. This is the percentage of the combined income that each parent has available to contribute to child support.
- Work out each parent’s percentage of care. This is the percentage of time that each parent spends with the children.
- Work out each parent’s cost percentage. This is the percentage of the costs of raising the children that each parent is responsible for.
- Work out each parent’s child support percentage. This is the difference between the parent’s income percentage and the parent’s cost percentage.
- Work out the costs of children. This is the amount of money that is needed to raise the children.
- Work out the child support amount. This is the amount of child support that is payable each month.
In addition to the factors that are included in the child support formula, there are a number of other factors that can affect the amount of child support that is payable. These factors include:
- The costs of raising the child are significantly affected by the high costs of spending time or communicating with the child. This can include things such as travel and accommodation expenses.
- The costs of raising the child are significantly affected because of their special needs. This can include children that require additional medical and other supports, or additional expenses for children that have a special talent or ability.
- The costs of raising the child are significantly affected because the child is being cared for, educated or trained in the way both parents intended. This can include children who attend private schooling.
- The child support assessment is unfair because of the child’s income, earning capacity, property or financial resources. This might apply for older children who are working.
- The child support assessment is unfair because you’ve paid or transferred money, goods or property to your child, the receiving parent or a third party, for the child’s benefit. This can include items received in a property settlement.
- The costs of raising the child are significantly affected by the parent or non parent carer’s child care costs, and the child is under 12 years of age.
- Your necessary expenses significantly reduce your capacity to support the child. This could be where the parent has significant medical or other expenses which affect their income.
- The child support assessment is unfair because of the income, earning capacity, property or financial resources of one or both parents. This may include an assessment be undertaken as to a parent’s self-employed income and expenses.
If any of the above factors apply, an application for change of circumstances can be submitted to Services Australia for an assessment and, if applicable, adjustment of child support payable.
Child support is assessed annually and will change depending on a parent’s tax return. However, if a parent fails to submit a tax return, Services Australia will still assess child support and make a deemed assessment.
The child support formula in Australia is a complex system, but it is designed to ensure that both parents contribute to the financial support of their children after separation or divorce.
If you are unsure about how the child support formula works, you should seek legal advice from one of our accredited specialists or experienced family law solicitors. We offer a fixed fee initial consultation for $220. Simply Contact one of our friendly staff members to make an appointment.
