Paying for the Kids

Date: Jul 02, 2009
Document Type: Newsletter

Australia's Child Support system has been in force for about twenty years now, so most separated parents have experienced it. In summary, it requires one parent (the liable parent) to pay the other an amount of money calculated by a formula.

The formula takes into account both parents taxable incomes, the number of children both have, the time the children spend with each parent and the ages of the children.

The Child Support Agency's website has a very good calculator available if you want to make an estimate.

Parents can come to their own agreement, which if registered with the Agency is binding and takes the place of an Agency assessment. If the receiver is in receipt of income-tested Centrelink benefits, the Agency will not register an agreement which will lead to Centrelink paying more than it would under an assessment.

Obviously any fixed formula can lead to unjust or inappropriate outcomes, so an aggrieved parent can seek a variation. The most common grounds are:-

  1. That the liable parent's income or financial resources are not reflected in the assessment (the wealthy parent with a good tax advisor!). The Agency can also look at a parent's earning capacity, not just their actual income.
  2. That a child has special needs, usually medical expenses because of a disability or illness.
  3. High costs of access. If access costs exceed five percent of child support income, an allowance can be made.

The first step in a review is an application to the Agency, which uses review officers to examine the matter and then make a ruling. The review process involves letting both parties present their arguments and documents if required, and the decision is in writing, often in some detail. A party who does not like the outcome can appeal to the Social Security Appeal Tribunal. The Tribunal's hearings are less formal and less expensive than a court's.

Ground 1 referred to above can require some investigation and research, unless many of the facts are known from when the parties lived together. It can also be used when the paying parent has a lot of cash in hand income, and the clue here is to calculate his or her expenditure. Often this will exceed the declared income, thus raising interesting questions!

Ground 2 is sometimes cynically known as the orthodontal ground, and can cover unusually high medical, dental or pharmaceutical costs, special educational expenses and child care where needed because of a child's special condition.

It is often overlooked with ground 3 that access costs can include not just travel, but accommodation such as a motel, and the extra costs of living away from home, such as eating out.

Life wasn't meant to be easy, was it? The Child Support system can be complicated and technical. The Child Support Agency is generally very helpful, but the quality of the help may vary depending on the actual helper. There is often no substitute for good professional advice.

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