What is child support?
Child support is financial support paid by one parent to another to meet the needs of their child/children.
In Australia, child support can operate in one of two ways:
- On a system of assessment; or
- On a system of agreement.
System of Assessment
In Australia, child support is administered by Services Australia.
There are two primary pieces of federal legislation relating to child support:
- Child Support (Assessment) Act 1989 (Cth) – this legislation assessed the amount of child support to be paid; and
- Child Support (Registration and Collection) Act 1988 (Cth) – this legislation regulates how child support collected.
Once you have established that you are eligible for child support, the next is the application of the child support formula to determine what amount of child support must be paid. In rare cases there may also be departure orders made in relation to child support. If you think this applies to you, we would recommend you obtain legal advice.
The Basic Formula (Formula 1) – A Single Case Assessment
The basic formula – i.e., formula 1 – is used to calculate the annual rate of child support payable when only the parents have care of the child/ren and neither parent has another child support case.
The amount payable will vary family to family and depend on the income of both parents. Section 35 of the Child Support (Assessment) Act 1989 (Cth) sets out the basic formula comprising of eight steps as follows:
- Step 1 – Determine each parent’s child support income – this is, the amount each parent earns less a “self-support” amount (this changes yearly – see: 4.2 Formula tables & values | Child Support Guide (dss.gov.au) for the current amount) and any amounts for the support of other people who are not included in this assessment – e.g. the support of a child with another person.
- Step 2 – Determine the parents’ combined child support income – that is, the amounts calculated from Step 1 combined.
- Step 3 – Determine each parent’s income percentage – that is, the amount of each parent’s child support income divided by the combined total (Step 2).
- Step 4 – Determine each parent’s percentage of care – this is calculated on the number of nights (not days) a parent spends with a child in any given basis (e.g. fortnightly, yearly). Spending daytime only is assessed as having 0 percentage of care.
- Step 5 – Determine each parent’s cost percentage – this is determined by using the Care and Cost table (see below).
- Step 6 – Determine each parent’s child support percentage – this is determined by subtracting the cost percentage from the income percentage for each parent – this is called the “child support percentage”. Importantly, the result will determine if a parent pays or receives child support.
If a parent’s percentage is negative, that parent is assessed to receive child support. This is because their share of costs for the child is more than the amount of care they provide.
If a parent’s percentage is positive, that parent is assessed to pay child support. This is because they are not meeting their share of the costs for the child directly through care.
It is important to note that, if you (or the other parent) have different care arrangements for various children, you might have different child support percentages for each child.
The following steps (7 and 8) are only used if a parent’s child support percentage is positive.
- Step 7 – Determine the costs of the child – this is determined based on the parents’ combined total income (Step 2), the number of children, and the children’s ages. The calculation is made by using the Costs of Children table – this can be accessed here: Basic child support formula – Child support assessment – Services Australia.
- Step 8 – Determine the annual rate of child support to be paid for the child – this is the final step of the formula. The amount of child support payable is calculated by multiplying the positive child support percentage (Step 6) by the costs of the child (Step 7). If it is assessed that both parents need to pay each other child support, these amounts are offset to reach a final figure – this final figure is the amount the one parent needs to pay the other in child support.
Care and Cost table
|Care percentage||Equal to number of nights a year||Equal to number of nights a fortnight||Care level||Cost percentage|
|0-13%||0-51||1||Less than regular care||0%|
|35-47%||128-175||5-6||Shared care||25% plus 2% for every percentage point over 35% of care|
|53-65%||190-237||8-9||Shared care||51% plus 2% for every percentage point over 53% of care|
|87-100%||314-365||13-14||More than primary care||100%|
Calculating Child Support: An Example
Jack and Jill have two children together – Harry (aged 7) and Holly (aged 5) who live mostly with Jack
The children spend 75 nights a year with Jill, who has regular care of the children.
Jack has an adjusted taxable income of $70,000 and Jill has an adjusted taxable income of $85,000.
- Step 1: Work out each parent’s child support income by deducting the self-support amount of $27,063 (from 2022 onwards) from their adjusted taxable income.
Jack has a child support income of $42,937 ($70,000 less $27,063).
Jill has a child support income of $57,937 ($85,000 less $27,063).
- Step 2: Work out the parents’ combined child support income.
$42,937 + 57,937 = $100,874
- Step 3: Work out each parent’s income percentage.
Jack = $42,937 ÷ $100,874 × 100 = 42.6%
Jill = $57,937 ÷ $100,874 × 100 = 57.4%
- Step 4: Work out each parent’s percentage of care for each child.
Jack has care of both children for 290 nights – this is 79.45% of the nights per year, which is rounded to a care percentage of 80%.
Jill has care of all the children for 75 nights – this is 20.55% of the nights per year, rounded to a care percentage of 20%.
- Step 5: Work out each parent’s cost percentage for each child by looking up the Costs and Care Table in section 55C (see above).
Jack has a cost percentage of 76%.
Jill has a cost percentage of 24%.
Note: a percentage of care is calculated for each individual child. As the care arrangements for these children are the same, the percentage is the same for both children. If there are different care arrangements for different children, then they will have different percentages of care.
- Step 6: Work out each parent’s child support percentage for each child by subtracting their cost percentage for that child from their income percentage.
As the care arrangements are the same for all the children the one child support percentage is used for all the children.
Jack = 42.6% − 76% = −33.4%
Jill = 57.4% − 24% = 33.4%
In effect, this means that Jill is assessed to pay child support because she is not meeting her share of the costs for the children directly through her care.
In order words, as Jill meets only 24% of the costs through her actual care of the children, Services Australia need to transfer 33.4% of the costs to Jack through child support.
- Step 7: Work out the costs of each child.
The combined child support income is $100,874.
From the current Costs of the Children table, the total costs of the children who are both 12 or under is $19,080 plus 20c for each $1 over $81,188.
Therefore: $19,080 + ($100,874 − $81,188 = $19,686 × $0.20 = $3,972)
Therefore: $19,080 + $3,972.20= $23,017
Therefore, the cost of each child = $23,017.20 ÷ 2 = $11,507
- Step 8: Work out the annual rate of child support payable by the parent with a positive child support percentage.
33.4% × $4,033 = $3,844
$3,844 × 2 (children) = $7,688
In effect, Jill is liable to pay Jack child support of $7,688 per annum.
What happens once an assessment has been made?
Either parent can apply for an assessment to be made by Services Australia.
Once an assessment is put in place, the agency has a responsibility to ensure that the child support assessment is complied with by the paying parent.
The CSA has various collective powers to ensure child support is paid, such as garnishing wages or garnishing tax returns (by intercepting them before they return to the paying parent).
Lawyers Who Care
If you, a family member or a friend have separated and need assisting with parenting and/or financial matters, we encourage you to seek legal advice from one of our friendly and knowledgeable lawyers here at Joss Legal.
We pride ourselves on being lawyers who care – being there for you every step of the way!
If you would like to book a $150 initial consultation with us, we can be contacted on (08) 6559 7480 or via email at firstname.lastname@example.org.