The term ‘child support’ refers to the financial support provided for children by parents who do not live together. The law says that both parents (including same sex parents) have an obligation to financially support their children.
The amount that should be paid depends on a number of variables, including:
- the adjusted taxable income of each parent;
- the costs of children (based on Australian research);
- the level of care each parent provides for the children; and
- whether either parent supports other children who they have a legal duty to support.
The Child Support Scheme is part of the Commonwealth Department of Human Services. Centrelink and Medicare are also part of the Department of Human Services. The Department administers the Child Support legislation, which is made up of the Child Support (Assessment) Act 1989 (Cth) and the Child Support (Registration and Collection) Act 1988 (Cth).
Child Support Assessments
The Department of Human Services - Child Support (DHS-Child Support) processes applications for child support, creates assessments of child support based on the legislative formula or a child support agreement, and manages a variety of administrative remedies which are available to customers under the legislation. The most common of these remedies include seeking a change to the level of care recorded in the assessment, lodging an Estimate of Income and seeking a Change to the Assessment in Special Circumstances.
The formula assessment relies on having accurate information about parents’ incomes and care arrangements. For this reason, it is important that parents lodge their tax returns on time and provide DHS-Child Support with accurate information about the care of the children.
It is also important to notify DHS-Child Support of any other change in circumstances as soon as possible. These could include the birth of a relevant dependent child, a change in the care arrangements for a child or a significant decrease in the income of a parent. Such changes may have a direct impact on the child support assessment, or may lead to taking other steps such as lodging an Estimate of Income or an application to Change the Assessment in Special Circumstances.
Collection and Enforcement of Child Support Payments
If necessary, DHS-Child Support can collect payments of child support or maintenance from payers, and transfer these payments to payees. The Department has a range of powers to enforce collection of child support debts if they are not paid voluntarily. These powers include the ability to:
- collect payments directly from a payer’s employer;
- intercept tax refunds due to a payer who has a child support debt;
- withdraw funds from a payer’s bank account (where it can be identified);
- collect a limited amount from Centrelink benefits; and
- issue a Departure Prohibition Order to prevent a payer who has a child support debt from leaving Australia until s/he enters into a payment arrangement.
Relationship with Centrelink
Child Support, Centrelink and the Family Assistance Office share information about the amount of child support calculated in an assessment, and about the level of care each person provides for the children. If DHS-Child Support is collecting the payments, information can also be provided to Centrelink about the actual amount of child support paid or received.
Child support payments can affect Family Tax Benefit (A) entitlements. A person must have at least 35% care of a child to be eligible to receive a payment of FTB (A) for a child.
NB: Centrelink and DHS-Child Support do not automatically share information about parents’ incomes. Therefore, if there are changes in a parent’s income or if a payer becomes unemployed, it is important to contact DHS-Child Support to discuss the options for changing the child support assessment.
Either parent or a non-parent carer can apply to DHS–Child Support for an administrative assessment of child support. The application can be made to the Department:
- online at https://childsupportapplication.humanservices.gov.au/; or
- by telephone (131272).
The Department requires information about:
- proof of parentage for each parent;
- care arrangements for the child/ren; and
- whether the collection of the liability will be done privately or by the DHS–Child Support.
When applying for a child support assessment, the Department of Human Services – Child Support will require proof of parentage from each parent. This can be provided in a number of ways, as set out in section 29(2) of the Child Support (Assessment) Act 1989 (Cth). DHS-Child Support can accept any of the following as proof that a person is a parent of a child:
- the child was born during the course of a marriage;
- the person is recorded on the birth certificate as a parent of the child;
- the person has been found to be a parent of the child by a relevant court;
- the person has acknowledged parentage by signing a Statutory Declaration or other instrument;
- the person has adopted the child;
- the father and the mother lived together during the period 44 weeks to 20 weeks before the birth of the child;
- the person is a parent of the child under section 60H (artificial conception procedures) or section 60HB (surrogacy provisions) of the Family Law Act 1975 (Cth). This includes children born of same-sex parents who have a child using artificial conception procedures under section 60H.
Determining parentage can be complex, and DNA parentage testing can be used to help resolve uncertainties. Testing for legal purposes must be done by laboratories accredited as required by the Family Law Act 1975 (Cth), and using strict procedures that are set out in the Family Law Regulations 1984 (Cth).
DHS-Child Support cannot accept a DNA parentage testing report as proof of parentage. DNA reports can be produced as evidence in a court to obtain a court order stating that a person is, or is not, a parent of a child.
In circumstances where a mother is required by Centrelink to apply for a child support assessment and the application cannot be accepted because there is no proof of paternity, advice should be obtained by calling the Child Support Helpline of the Legal Services Commission on 8111 5576. Assistance may be available to
- contact the alleged father and to ask him to sign a Statutory Declaration stating that he is the father of the child/ren; or
- arrange, where necessary, for parentage testing to be carried out to determine paternity;
- seek an order of the court for a declaration of paternity, where necessary.
If a father is concerned that he is assessed to pay child support for a child who is not his child, he should obtain legal advice as soon as possible by calling the Child Support Helpline on 8111 5576. Assistance may be available to
- arrange parentage testing where appropriate;
- make an application to a court for a declaration that a payee is not entitled to receive child support from the payer;
- seek a court order to recover monies already paid.
Legal advice should be sought promptly in relation to any matters involving disputed parentage. Delay in bringing an application can adversely affect the legal rights of the parties.
Where to get help
Free independent legal advice can be obtained from the Child Support Help Line on (08) 8111 5576.
Centrelink and the Family Assistance Office are key stakeholders in the Child Support Scheme. One of the major reasons that the Child Support Scheme was introduced was to reduce the burden on the welfare system, and to ensure that parents were responsible for the financial support of their children in the first instance.
A person must have at least 35% care of a child to be eligible to receive a payment of Family Tax Benefit Part (A). The payment is individually calculated to suit the care arrangements for each child.
Maintenance Action Test
Any parent who is eligible to receive more than the base rate of FTB (A), is required to ‘take reasonable maintenance action’ to obtain child support payments from the other parent. Taking reasonable maintenance action includes obtaining legal assistance to establish parentage to allow an application for child support to proceed. A parent has 13 weeks to take this action before their FTB (A) can be reduced to the minimum rate.
Legal assistance can be obtained from the Child Support Help Line on (08) 8111 5576.
Exemption from taking Maintenance Action
Some parents may be eligible to obtain an exemption from taking maintenance action for the following reasons:
- Fear of violence
- Risk of harmful or disruptive effects
- Exceptional cultural circumstances
- Father of child unknown
- Identity of father cannot be proven despite legal assistance
An appointment should be made with a Centrelink social worker to discuss obtaining an exemption on these grounds. The social worker will make a decision based on his or her professional assessment. A parent may be asked to provide evidence in support of a claim for an exemption.
Calculation of Family Tax Benefit Part (A)
The rate of FTB(A) is affected by
- household income;
- the amount of care provided; and
- the amount of child support that is paid or received.
The rate of FTB(A) can also be affected by the way that the child support payments are collected, either by
- private collection; or
- DHS-Child Support collection.
Collection by Private Arrangement
If a payee opts to collect payments of child support privately, Centrelink will assume that s/he is receiving the full amount that s/he is entitled to receive under the assessment, and calculate the rate of FTB (A) accordingly.
If child support payments are not made, or are not made in full, a payee can ask the Department of Human Services - Child Support to collect child support on his/her behalf.
Collection by the Department of Human Services - Child Support
If DHS-Child Support collects the payments of child support, Centrelink will be notified of all payments received. If payments are not being made, the payee can ask Centrelink to calculate the rate of FTB (A) based on the amount of child support that has actually been received (known as the ‘disbursement method’), rather than on the amount they are entitled to receive (known as the ‘entitlement method’).
It is recommended that payees discuss these issues with Centrelink to achieve the best outcome for them.
The child support assessment can be based on the formula set out in the legislation, or an agreement reached between the parents.
The current formula was introduced on 1 July 2008. It takes into account many variables including the incomes of each parent, the number and ages of children, the costs of children, the level of care each parent provides for the children, and whether either parent has a legal duty to support any other children.
The formula consists of three main elements:
1. Parents’ Incomes
2. Costs of Children Table
3. Level of Care
The starting point is each parent’s taxable income for the previous year, plus other amounts which are automatically included such as:
- Net financial investment losses (eg rental property, shares, managed investments)
- Reportable fringe benefits
- Foreign income
- Reportable superannuation contributions
- Some tax-free pensions or benefits
- Some payments from the Department of Veteran’s Affairs
The total of these amounts is called the ‘Adjusted Taxable Income’.
The first step in the formula is to subtract an amount described as the ‘self-support’ amount ($24 154 in 2017) from each parent’s Adjusted Taxable Income. The self-support amount is the same for each parent.
If a parent has other relevant dependent children in their care, or is paying child support for other children, a further amount is subtracted from the Adjusted Taxable Income to recognize the costs associated with these commitments. In general terms, a relevant dependent child is defined as a child who is in the care of the parent for at least 35% of the time. The definition does not generally include step-children.
The remaining income is called the Child Support Income. Each parent’s Child Support Income figures are added together to obtain the Combined Child Support Income. This combined figure determines the costs of the children by reference to a Costs of Children Table.
The individual incomes of parents determine each parent’s share of the costs of children that they are required to meet.
The Costs of Children Tables are based on Australian research which looked at the amount of money spent on raising children in households with differing levels of income. The Costs of Children Tables are adjusted each year in accordance with changes in average incomes.
The Costs of Children Tables also take into account the number of children (up to a maximum of 3) and the ages of the children who require support. There is a table for children from 0-12 years, a table for children 13 years and over, and a table for children of mixed ages.
The amount of care provided by each parent can be counted as a contribution to the costs of the children. The level of care is generally counted in nights. However, a request can be made to determine the level of care based on hours rather than nights.
Parents who provide care for less than 52 nights (Less than Regular Care) are not considered to be providing care to an extent that should impact on the child support assessment. Accordingly, these parents have a cost percentage of 0%.
Parents who have ‘Regular Care’ of 52 - 127 nights per year are said to meet 24% of the costs of the children through care. For parents with this band of care, the cost percentage is a flat 24%.
Shared Care of 128 - 237 nights per year is worked out on a sliding scale delivering a cost percentage of 25-75%.
Parents who have ‘Primary Care’ of 238 - 313 nights are said to meet 76% of the costs of the children through care.
It should be remembered that increasing levels of care generally reduce the amount of child support to be transferred in periodic payments because it is recognized that parents contribute to the overall costs of the child by paying for a range of items while the child is in their care. A contribution to the child’s costs is not limited to the provision of food and accommodation while the child is in their care. Contributions to the costs of the child can include an equitable contribution to any costs including clothing, public school costs, medical and pharmaceutical expenses, and extra-curricular activities.
While the child support formula does not prescribe in minute detail how these costs are to be divided, parents should be aware that a significant level of care will reduce the rate of child support because it is assumed that a contribution is being made to the whole range of costs associated with raising children while they are in each parent’s care.
Parents need to be able to negotiate with each other about how they will meet the costs of children while they are in their care. A mediation service may be able to assist if parents are unable to reach agreement.
A table that converts the number of nights of care into the percentage of a child’s costs is below.
|Nights per year||CSA terminology||
|Percentage of costs met through care|
|0-51||Less than Regular Care||=||0%|
|128-237||Shared Care||=||25-75% (sliding scale)|
|314-365||Greater than Primary Care||=||100%|
Jack and Jill separate. They have one child, Jenny, aged 3 years, who spends 285 nights of the year with Jill, and 80 nights with Jack. Jack earns $84,154 and Jill earns $44,154. They have no other children.
1. Work out each parent’s Adjusted Taxable Income.
|$84 154||$44 154|
2. Subtract the self-support amount.
|$84 154||$44 154|
|-$24 154||-$24 154|
|=$60 000||=$20 000|
3. Subtract a further amount if either parent has a relevant dependent child or pays child support for another child or children. This is not applicable in this example.
4. Calculate the Combined Child Support Income.
$60 000 + $20 000 = $80 000
5. Consult the Cost of Children table to determine the cost of a 3 year old child in a family with a Combined Child Support Income of $80 000.
$11 594 plus 12cents for every $1 of income above $72 462 ($80000 - $72 462 = $7 538 x .12c = $904.56)
$11 594 + $904.56 = $12 498.56 per year
5. Calculate each parent’s Income Percentage, which is their share of the costs of the child based on the Child Support Income alone.
Jack 60000 /80000 x 100 = 75%
Jill 20000 /80000 x 100 = 25%
6. Work out the Cost Percentage based on the level of care each parent provides for the child.
Jack 80 nights Regular Care Cost percentage 24%
Jill 285 nights Primary Care Cost percentage 76%
7. Calculate the Child Support Percentage by subtracting the Cost Percentage from the Income Percentage. This adjustment recognizes that some or all of Jenny’s costs are being met through the care that is provided by Jack and Jill.
Jack 75% - 24% = 51% Jack will have to pay child support to Jill.
Jill 25% - 76% = -51%
8. Work out the amount of child support payable by multiplying the cost of the child by the Child Support Percentage.
Jack $12 498.56 x 51% = $6 374 per year
The Department of Human Services – Child Support has a child support Estimator on their website. Parents may find it a useful tool in less complex cases: https://processing.csa.gov.au/estimator/About.aspx
Generally, payers who have a low Adjusted Taxable Income are only required to pay the Minimum Annual Rate of child support.
In 2017 the minimum rate is $420 per annum. This rate increases each year in line with increases in the consumer price index. If the payer has more than one family, the minimum rate is payable to each family (up to a maximum of three cases).
The Minimum Annual Rate is not payable if the paying parent has at least Regular Care of the child/ren (52-127 nights per year).
There are some cases where payers have a low taxable income but this is not an accurate reflection of their financial situation. Therefore, if a paying parent has a very low income but is not in receipt of a Centrelink benefit, the Minimum Annual Rate is replaced by a Fixed Annual Rate of approximately $26.70 per week per child (capped at 3 children or approximately $80 per week).
The Fixed Annual Rate is not payable if the paying parent has 35% (or more) care of the child, because it is accepted that they are contributing to the costs of the child through the care provided.
If a parent wishes to dispute a fixed rate assessment s/he should contact the Department of Human Services - Child Support on 131 272. The Department will require further evidence of income to enable the officer to make a decision.
There can be many reasons that require a change to a child support assessment - a parent’s income may not be accurately reflected in the assessment, or the level of care recorded may be wrong, or there may be a special circumstance that is not taken into account in the formula. What can be done? The child support legislation has some inbuilt remedies, which allow an assessment to be changed to reflect the circumstances in the case. The remedies are administered by the Department of Human Services - Child Support. They allow the child support formula assessment to respond to unanticipated changes in the lives of the parents and children.
If the assessment is not fair or not correct, it is important to identify the problem so that the appropriate remedy can be selected. For example, if the issue is about the care level used in the assessment then the remedy is to inform DHS-Child Support or Centrelink and ask for a care decision to be made.
If the issue concerns a special circumstance such as the special needs of a child or private education expenses, the appropriate remedy may be to make an application to Change the Assessment in Special Circumstances.
Alternatively, the issue may relate to the income used in the assessment for either parent. Ordinarily, the income used in the assessment is based on the parent’s most recent taxable income. For some people, particularly those people who are self employed or have experienced periods of unemployment, this may not produce an accurate assessment of child support. The remedies most often used to change the income used in the assessment are the lodgement of an Estimate of Income or an application to Change the Assessment in Special Circumstances. Deciding which of these remedies is appropriate will depend on the particular circumstances in the case.
The level of care forms an integral part of the formula assessment. For this reason, it is important to tell the Department of Human Services – Child Support about any changes to care arrangements as soon as possible. This is one instance where either Centrelink or Child Support can be notified and either can make care decisions which can affect both Family Tax Benefit (A) and the rate of child support.
DHS-Child Support or Centrelink will contact the other party to confirm the level of care. If there is a dispute about care levels, the parties may be asked to provide further information before the Department makes a decision. Usually the Department must make a decision based on the actual level of care that each parent or carer is providing for the child/ren.
Sometimes parents or carers have a written agreement, parenting plan or court order which sets out the care arrangements for the children. The level of care may initially reflect these written arrangements. However, it may be that circumstances change and the actual care arrangement is different to the written document. If parents or carers do not agree about the level of care that each is providing for the children the Department will need to make a care decision to reflect the actual care arrangement for the children.
Sometimes in these circumstances one parent is taking steps to enforce or change the written care arrangement. For example, s/he may be arranging mediation to renegotiate the care arrangements. Or s/he may have filed a court application seeking to enforce parenting orders made in a family law court. In these circumstances the Department can make an interim care decision to use the care level detailed in the written document for a period of 14 weeks (and sometimes up to 26 weeks) in the expectation that the care dispute will be resolved by mediation or through court proceedings. If the dispute is not resolved, the Department must eventually make a decision to reflect the actual care arrangement for the children.
If Centrelink makes a care decision, an appeal can be lodged with an authorised review officer (ARO). These appeals should be lodged within 13 weeks to ensure that the appeal decision can be backdated. There is a further right of appeal to the Administrative Appeals Tribunal which should also be lodged within 13 weeks.
If DHS-Child Support made the care decision, an objection can be lodged within 28 days. Unlike most objections, an objection in relation to a care decision can be made by telephone to DHS-Child Support (131 272). It does not have to be in writing. The objection decision can be appealed to the Administrative Appeals Tribunal if either party is not satisfied with the objection decision. An appeal to the AAT must be lodged within 28 days.
A further appeal (i.e. a second level review) can be made to the Administrative Appeals Tribunal in relation to care decisions.
Legal advice can be sought regarding objection and appeal rights by telephoning the Child Support Help Line on 8111 5576.
The table that converts the number of nights of care into the percentage of a child’s costs is below.
Child Support Care and Cost Percentage Table
|Nights per year||Department of Human Services terminology||
|Percentage of costs met through care|
|0-51||Less than Regular Care||=||0%|
|128-237||Shared Care||=||25-75% (sliding scale)|
|314-365||Greater than Primary Care||=||100%|
If the income used in the assessment is not correct, either parent can provide an Estimate of Income to the Department of Human Services – Child Support in the following circumstances:
- the estimated income must be at least 15% lower than the income used in the assessment;
- estimates can only be lodged for future periods, ie an estimate cannot change past periods prior to the day on which the estimate is made;
- estimates start from the date the parent provides the estimate to Child Support, or from a nominated future start date;
- the parent wishing to provide an estimate must have lodged their most recent tax return, or provided DHS-Child Support with their adjusted taxable income for that period;
- an estimate can be lodged for the whole or a part of a financial year;
- an estimate cannot replace an income in an assessment that has been fixed by a court decision or through the Change of Assessment process.
When lodging an Estimate of Income, parents are also asked to provide the income they have earned up to the day on which they lodge their Estimate. It is important that this ‘year-to-date’ figure is accurate, as it will be used when the DHS-Child Support reconciles the estimate with the actual income that the person has earned.
If there is any change to their income during the estimate period, parents are obliged to update their estimate of income by notifying DHS-Child Support.
Estimates are reconciled with taxable income after the end of the financial year. If the actual income is higher than the estimated income, the assessment will be amended to use the higher income for the estimate period. Penalties can apply if a person significantly underestimates their income.
NB: It is important to ensure that estimates include all types of taxable income such as a drawdown on superannuation or any event that might attract capital gains tax.
Either parent or a non-parent carer can lodge an application to DHS-Child Support to Change the Assessment in Special Circumstances. These applications are commonly made where parents’ incomes are disputed, or where parents or carers have extra costs associated with a child’s special needs, or with private schooling which both parents agreed to. This application must be made in writing on the appropriate form. DHS-Child Support will send a copy of the application and any supporting documents to the other parent, who is given the opportunity to respond and/or make a cross-application.
A Senior Case Officer is appointed to consider the application. The Senior Case Officer can consider variations to the current and future assessments. Changes to the assessment can be backdated for a period up to 18 months prior to lodging the application, although often a change is only made from the date the application was lodged.
To change any earlier assessments an application must first be made to a court seeking leave (permission) to make changes that are more than 18 months in the past. A court can only authorise changes to the assessment for a maximum of 7 years prior to the application being lodged.
When considering whether to make a change to the assessment, the Senior Case Officer must be satisfied of the following three criteria:
- that special circumstances exist;
- that one of the reasons (listed below) exists; and
- that it is fair to all the parties and the community to make a change.
There are ten specific grounds of review that can be established:
Reason 1 It costs more than 5% of the child support income amount to have spend time with the child(ren). (If a parent has at least regular care of the child(ren), a claim under this reason is restricted to travel related expenses).
Reason 2 It costs extra to cover the child(ren)’s special needs.
Reason 3 It costs extra to care for, educate or train the child(ren) in the way that both parties had intended.
Reason 4 The child support assessment does not take into account the income, earning capacity, property and financial resources of the child(ren).
Reason 5 The child(ren), payee or someone else has received or will receive, money, goods or property from the payer.
Reason 6 It costs more than 5% of the child support income amount for child care for the child(ren) who are 12 years or under.
Reason 7 The payee or payer have necessary expenses in supporting themselves that affect their ability to support the child(ren) of the assessment.
Reason 8 The child support assessment does not taken into account the income, earning capacity**, property and financial resources of one or both of the parties.
Reason 9 The payee or payer has a legal duty to maintain another person or another child(ren) not included in the child support assessment. This can include a legal duty to support an adult child who is in need of support because s/he is undertaking study or training, or because s/he has a disability, or a legal duty to support a spouse.
Reason 10 The payee or payer has a responsibility to support a resident child who lives with him/her but is not a biological child. A resident child is a child of the partner of the payee or payer with whom they have lived for at least 2 years. It must be shown that neither of the biological parents of the resident child is able to support them.
** Earning Capacity has a very specific definition. In order to have a parent assessed on his/her earning capacity (rather than on his/her actual income), an applicant has to satisfy three criteria –
1. The parent is either:
a) not working despite ample opportunity to do so, or
b) has reduced weekly working hours below full-time hours, or
c) has changed occupation, industry or working pattern
2. The parent’s decision about work is not justified by either:
a) caring responsibilities, or
b) health reasons
3. The parent (whose earning capacity is being examined) has failed to show that the work arrangements have not been put in place in order to have an effect on the child support assessment.
The Senior Case Officer, in making a decision, is bound by the Child Support (Assessment) Act 1989 (Cth), Child Support (Registration & Collection) Act 1988 (Cth) and the Family Law Act 1975 (Cth). The legislation states that an assessment can only be varied where it is just, equitable and otherwise proper to do so.
Applications can only be made to the DHS-Child Support to change an administrative assessment that is less than 18 months old on the date the application is lodged.
A person must first apply to a court for leave (permission) to seek a change to an assessment that is more than 18 months old. A court cannot give permission to change an assessment that is more than 7 years old.
- Applying to change an administrative assessment in special circumstances is free.
- Either parent or a non-parent carer can apply to have the assessment changed.
- The applicant must complete an application form and nominate the reasons they rely on, before the application can be processed.
- A non-parent carer (eg grandparent) is not required to provide their financial information on the application form.
- The applicant should provide any additional information or documents which are relevant to their case.
- Applicants and respondents should be aware that the Department of Human Services - Child Support has a policy of open exchange of information. This means that copies of the application/response and any supporting documents will be provided to the other person. Any information that an applicant does not want revealed to the other person, such as address, phone number or bank or credit card numbers should be removed before submitting the application.
- A Senior Case Officer will consider the application and will try to contact the parties to discuss the application and response.
- Applicants should retain a copy of their application.
- It is possible to receive an adverse decision in this process. For this reason, it is advisable to seek free legal advice and assistance from the Child Support Unit of Legal Services Commission before submitting an application or response.
- Parties cannot be represented by lawyers in this process.
- The Senior Case Officer will provide written reasons explaining the decision.
- The Senior Case Officer’s decision is binding on both parties until a further decision is made.
- If a party is not satisfied with the decision s/he can object to the decision in writing within 28 days.
- If a party is still dissatisfied with the objection decision s/he can appeal to the Administrative Appeals Tribunal within 28 days. An appeal to the AAT can be made by telephone on 1300 366 700.
- Appeals to a court from an Administrative Appeals Tribunal decision can only be brought on a question of law.
It is possible to object to many of the decisions made by the Department of Human Services – Child Support if an error has been made in determining the facts or applying the law. DHS-Child Support is required to inform people of their objection rights when a decision is made. An objection is usually lodged in writing.
An objection is usually lodged in writing. The exception to this rule is that objections in relation to level of care decisions can be made by telephone.
A person has 28 days in which to object to a decision by DHS-Child Support. This time limit is usually strictly enforced. An application for an extension of time in which to object to a decision can be made either in writing or by telephone.
Decisions which are commonly objected to include:
- decisions in relation to a Change of Assessment application;
- decisions to accept or refuse an Estimate of Income;
- decisions in relation to the level of care recorded in the assessment for the children;
- decisions to accept or refuse an application to register a Child Support Agreement;
- decisions in relation to remission of late payment penalties; and
- decisions in relation to non-agency payments.
Appeals to the Administrative Appeals Tribunal
Decisions made by the Department of Human Services - Child Support can be reviewed by the Administrative Appeals Tribunal (AAT). However, a person must first have objected to the decision through DHS - Child Support's objection process before they can lodge an appeal with the Administrative Appeals Tribunal.
An appeal can be lodged with the AAT by telephone (1300 366 700) or in writing. Forms and further information can be found at the AAT website.
When an appeal is lodged, DHS-Child Support provides all relevant documents to the AAT and a copy is given to each party. The Tribunal can request further information to assist it to make a decision.
If the appeal is in relation to a Change of Assessment decision, a pre-hearing conference is often held to identify the issues and determine if further information is required from either party. A date will also be fixed for the appeal hearing.
Both parties attend the appeal hearing in person, although in some circumstances arrangements can be made to attend by telephone. A person can bring along a support person, but the Tribunal will decide if the support person is allowed to attend the hearing. A party can apply to the Tribunal to allow a representative (including a legal representative) to make submissions at the hearing.
If a person is dissatisfied with an objection decision made by DHS-Child Support, s/he has 28 days in which to lodge an appeal to the AAT. This time limit is usually strictly enforced, although an application can be made to the AAT for an extension of time in which to appeal.
Appeals to a court
Where a parent is dissatisfied with a decision of the Administrative Appeals Tribunal, an appeal can be made to a court but only on a question of law. There is a 28 day time limit for lodging an appeal to a court, although an application for an extension of time can be made. It is important to obtain legal advice before lodging an appeal at a court. In any unsuccessful court application there is a risk that the court could make a costs order.
Administrative Appeals Tribunal
1300 366 700
Parents can make their own formal agreements about the amount of financial support they provide for their children.
There are two kinds of formal child support agreements:
- Limited Child Support Agreements; and
- Binding Child Support Agreements
Child support agreements can include periodic payments, payments to third parties, in-kind payments or lump sum payments. An agreement allows parents some freedom to make arrangements to suit their individual needs. However, the object should always be that the children receive a proper level of financial support from their parents, and agreements should not be used to unfairly take advantage of either party.
For such agreements to be registered with the Department of Human Services – Child Support they must be drawn up strictly in accordance with the child support legislation. Child support agreements can include various types of payments, but DHS-Child Support can only collect periodic payments such as a monthly or weekly rate of child support. The Department cannot enforce any clauses in agreements which relate to payments to third-parties, in-kind payments or lump sum payments.
Parties should be cautious about the duration of an agreement. The longer the period of the agreement, the less likely it will be able to accommodate future changes in the circumstances of the parents or the children in the same way that a formula based assessment can.
There is also a group of agreements which predate the change to the law on 1 July 2008, and which were ‘transitioned’ to become Binding Child Support Agreements, even though the strict criteria governing new binding agreements were not satisfied. These agreements are known as ‘Transitioned Agreements’.
An administrative assessment of child support must be in place before a Limited Child Support Agreement can be registered. It is recommended that parties seek legal advice before entering a Limited Agreement, but this is not a mandatory requirement.
A Limited Child Support Agreement has the following fundamental characteristics:
- provides a rate of child support equal to or more than the amount payable under the formula assessment;
- can include periodic and non-periodic payments;
- can be replaced with a further Limited or Binding Agreement, but cannot be varied;
- can be terminated upon application of either party after the passage of 3 years; or when the annual rate of child support payable under a notional formula assessment changes by more than 15%;
- can be set aside by a court under s 136 of the Child Support (Assessment) Act 1989 (Cth);
- Family Tax Benefit (A) entitlements will be calculated by reference to the child support payable under a notional formula assessment, (not the amount payable under the Agreement);
- a new notional assessment will be issued each three years; or at the request of either party; or where the amount of child support payable under the agreement changes by more than 15%;
- parties have options to challenge the new notional assessment within 14 days.
It is not necessary to have an administrative assessment in force prior to entering into a Binding Child Support Agreement. However, if a binding agreement is registered with the DHS-Child Support, a notional formula assessment will be created. A notional assessment is the formula based assessment that would apply if the agreement was not in place.
Some fundamental characteristics of Binding Child Support Agreements are listed below:
- can provide for the payment of child support that is less than, equal to, or more than the rate of child support that would be payable under the formula assessment;
- can provide for periodic, non-periodic and lump sum payments;
- each party must receive legal advice from a legal practitioner, and a Certificate of Independent Legal Advice must be annexed to the Binding Child Support Agreement;
- can be terminated by executing a Termination Agreement or a further Binding Child Support Agreement. Both alternatives require the provision of independent legal advice to each party;
- can be set aside by a court under s 136 of the Child Support (Assessment) Act 1989 (Cth);
- Family Tax Benefit (A) entitlements will be calculated by reference to the child support payable under the notional formula assessment, (notthe amount payable under the Agreement); and
- A new notional assessment will be issued each three years or where the amount of child support payable under the agreement changes by more than 15%. Parties have options to challenge the new notional assessment within 14 days.
It is mandatory for each party to receive independent legal advice before entering a Binding Child Support Agreement. Section 80C of the Child Support (Assessment) Act (1989) requires legal practitioners to advise parties as to:
(i) the effect of the agreement on the rights of that party;
(ii) the advantages and disadvantages, at the time that the advice was provided, to the party of making the agreement
To provide this advice, a legal practitioner would need an understanding of the Child Support scheme, and knowledge of the financial situation of each party. This involves the exchange of financial information. Even if a party indicates that s/he is perfectly satisfied with the terms of the agreement, the law requires that the advice be given by the legal practitioner.
Binding Child Support Agreements can include an agreement to transfer a lump sum payment of cash or non-cash. For example, transferring equity in the former matrimonial home can constitute a lump sum child support payment. Some fundamental characteristics of lump sum binding agreements are listed below:
- an administrative assessment must be in force prior to entering the agreement;
- each party must receive legal advice from a legal practitioner, and a Certificate of Independent Legal Advice must be annexed to the lump sum Binding Child Support Agreement;
- the lump sum amount must be more than or equal to the annual rate of child support;
- actual payment of the lump sum will be transferred between the parties (not paid to the Department of Human Services – Child Support);
- the lump sum credit will be recorded at DHS-Child Support where it will reduce each year by the annual rate of child support, and the remaining credit will be indexed by the CPI;
- unless the Binding Child Support Agreement also changes the rate of child support payable, the Department will continue to produce formula assessments in the usual way;
- Family Tax Benefit (A) entitlements will be calculated by reference to the formula assessment of child support, or if the agreement has also changed the rate of child support payable, by reference to the notional assessment;
- if the rate of child support is not set by the agreement, it will be impossible to predict how long the lump sum amount will last because the assessment will vary with changes in the parents’ incomes, ages of the children and care levels;
- when the lump sum credit is reduced to nil, it will be necessary to commence periodic payments according to the administrative assessment;
- a lump sum Binding Agreement can prescribe that the lump sum can represent either 100% or some other proportion of the amount payable under the administrative assessment.
A lump sum Binding Child Support Agreement may be used in conjunction with Property Settlement orders. For example, the agreement may provide for the transfer of equity in the family home to represent a lump sum payment of child support. The parties can agree that the lump sum is to be used to pay for all or part of the child support assessment.
Parties agree to a $20,000 lump sum payment, and agree that it will represent 50% of the assessed annual rate of child support. The annual rate is currently $5,000.
A Binding Child Support Agreement is executed and registered with DHS-Child Support, and the $20,000 credit is recorded.
The payer will pay $2,500 (50% of the annual liability) in periodic payments, and after twelve months the lump sum credit will reduce by $2,500 (50% of the annual liability) to $17,500. The remaining credit will be indexed by the CPI.
This sequence will continue (taking account of any variations in the assessed rate of child support and CPI) until the lump sum is exhausted or the case ends.
Parents/carers are able to make a Binding Child Support Agreement which provides for less than the assessed rate of child support. However, the entitlement to Family Tax Benefit (A) will not be calculated on the amount of child support payable under the agreement. FTB (A) will be calculated by reference to the notional assessment of child support, which will reflect the amount of child support that would have been payable, if the agreement had not been made.
For clients with Limited Child Support Agreements, Family Tax Benefit (A) will also be calculated by reference to the notional assessment, and not by the agreement.
Lump Sum Binding Child Support Agreements will not require the creation of a notional assessment, unless the agreement also changes the rate of child support payable. Although Transitioned Agreements (those executed and registered prior to 1 July 2008) are deemed to be Binding Child Support Agreements, in these cases Family Tax Benefit (A) entitlement is based on the amount of child support set out in the agreement.
- A court can set aside a Limited Agreement or a Binding Agreement if the agreement was obtained by fraud or the failure to disclose material information; or
- the court is satisfied that undue influence, duress, or unconscionable or other conduct was applied to secure the agreement; or
- in the case of Limited Agreements, a court can set the agreement aside if there is a significant change in the circumstances of either party or the child, or if the agreement provides for an annual rate of child support that is not proper or adequate; or
- in the case of Binding Agreements, a court can set aside the agreement if exceptional circumstances occur after the agreement is made, that would cause hardship if the agreement was not set aside.
[see Child Support (Assessment) Act 1989 (Cth) s 136]
It is clear from this section that parties should provide full and frank disclosure of their financial positions at the time of negotiating an agreement. It is also important that neither party, nor someone acting on their behalf, use any undue pressure or coercion to secure the agreement of the other party, because this can provide the grounds to have an agreement set aside.
In addition, parents should be aware that it is very difficult to set aside a Binding Child Support Agreement by showing ‘exceptional circumstances that would cause hardship’. There have been several cases where this test has been very difficult to make out. Changes in income, the birth of new children, even changes in care arrangements of the children are not always sufficient to satisfy a court that there are ‘exceptional circumstances’.
An agreement which has been appropriately drafted and executed, and which provides for the periodic payment of child support can be registered for collection with DHS-Child Support. Agreements for non-periodic payments (such as school fees) cannot be enforced by the DHS-Child Support.
The Department cannot enforce verbal agreements.
An agreement cannot exclude collection of the liability by the Department of Human Services – Child Support, even if expressed to do so. If the payments are not made voluntarily in accordance with the agreement, the payee can ask DHS-Child Support to commence collection of periodic payments.
What happens when my child turns 18?
A child support assessment will usually end when a child turns 18. However, if the child is still attending secondary school when s/he turns 18, the payee can ask the Department of Human Services – Child Support to extend the child support assessment until the end of the school year. This application can be made by telephone and must be made before the child turns 18.
What happens after the child support assessment ends?
In Australia the Family Law Act 1975 (Cth) provides that a maintenance order can be made for children who are over 18 if financial support is necessary
1) to enable the child to complete his or her education; or
2) because of a mental or physical disability of the child.
Education can include school, TAFE and university courses, apprenticeships and vocational courses. The court can consider whether the course is an appropriate path to assist the child to become independent. Parents do not generally have a legal obligation to support children through post-graduate degrees.
To have a legally binding arrangement for a child who is over 18, there must be a court order which sets out the amount of adult child maintenance. Orders for periodic payments can be registered for collection by DHS–Child Support if the payer defaults on making payments directly to the carer or child.Either the adult child, or the person who is caring for them, can apply to the court for an adult child maintenance order. The first step in such an application is to try to reach agreement between the adult child and one or both parents. This can involve negotiation between the parties and their lawyers, or mediation can be arranged. If agreement can be reached the parties can file Consent Minutes of Order at the court.
If agreement is not reached the next step is to file a court application which is served on the respondent parent. The respondent is required to file responding documents and both parties are required to provide “disclosure”, that is, to provide copies of all relevant financial documents to the other party. This includes tax returns, pay slips, bank statements, superannuation statements, proof of expenses and any other relevant information.
If the matter still does not resolve, the application would be listed for trial. At the trial, a Judge usually hears evidence from both parents and from the child. They then make a decision as to the appropriate rate of maintenance. The Judge must consider the following matters:
- necessary expenses of the child – this includes a contribution to their living expenses and items such as study books and equipment, but HELP-HECS payments are not considered a necessary expense. For children with special needs, expenses associated with their disabilities can also be considered;
- the contribution the child is making to their own upkeep. There is an expectation that adult children will contribute to their own support by working part-time where this is possible. If the child has disabilities and is not able to work the applicant will need to provide medical evidence to establish this; and
- the capacity of each parent to provide financial support. This includes a consideration of each parent’s income, expenses, financial resources and earning capacity.
If a maintenance application is decided by a Judge it may take 6 months or more for the matter to be finalised. If an order for maintenance is made, it may not be backdated. If the application is unsuccessful, a court can make a costs order. It is important to have legal advice before commencing a court application.
For more information, call the Child Support Help Line on 8111 5576 or 1300 366 424, or see our pamphlet Adult Child Maintenance.
Collection by Private Arrangement
The Department of Human Services – Child Support encourages parents to make their own arrangements for collection of payments. It is recommended that a reliable record of payments is maintained in the form of a regular bank transaction.
Private collection is only recommended in cases where the payer is likely to pay or has a good payment history, and where the child support assessments are based on reliable incomes that are not likely to be changed in the future.
Parents contemplating changing from DHS-Child Support collection to a private collection arrangement should seek legal advice about the possible implications of taking this step.
Private Collection and Family Tax Benefit(A)
If a case is privately collected between the parties, Centrelink assumes that the full payment is being transferred to the payee, and Family Tax Benefit (A) will be calculated on the amount stated in the assessment.
If a payee is receiving less than the amount calculated in the assessment, s/he can ask DHS-Child Support to commence collection of the liability. The Department can usually only backdate collection three months, so it is important to take action promptly if payments are not being made.
If a payee is receiving less than the assessed rate of child support and is fearful of asking the Department to collect because of threats or coercive behaviour from the payer, s/he can make an appointment to speak to a Centrelink Social Worker about obtaining a partial exemption from the Maintenance Action Test.
Private Collection and FTB(A) Overpayments
A child support assessment can be changed retrospectively to increase the amount of child support payable during past periods. This can occur as a result of late lodgement of tax returns which result in a higher rate of child support, or where an Estimate of Income is reconciled and replaced with a higher income. If a case was privately collected during these periods, the payee may be notified that s/he has been overpaid Family Tax Benefit (A), because Centrelink will automatically assume that the payee has received the amount s/he was supposed to receive pursuant to the (updated) assessment. If the debt of child support is not paid, parents can ask Centrelink to review the decision to create an overpayment.
Private Enforcement of Child Support Debts
Payees can personally make an application to a court to enforce collection of outstanding payments of child support. If the case is also registered for collection with the Department of Human Services – Child Support, payees are required to advise the Department in writing of their intention to take private enforcement action. The Department must also be notified of any orders made by the court in relation to the debt. Legal advice should be sought before taking enforcement action.
Collection by Department of Human Services – Child Support
DHS-Child Support can register and collect periodic payments of child support or maintenance which are due pursuant to the following:
- child support assessments;
- child support agreements;
- court orders for adult child maintenance;
- court orders for spousal maintenance;
- overseas maintenance orders from reciprocating countries.
Once the liability is registered for collection with DHS-Child Support, the debt becomes a debt to the Commonwealth, and the Department becomes responsible for collection of the debt.
Agreements for non-periodic payments (such as school fees) cannot be enforced by DHS-Child Support.
There are many options for a payer to make voluntary payments of child support or maintenance to the Department of Human Services – Child Support. These include payment by bank transfer, BPay, Billpay at Australia Post, employer deductions or by online card payment using the Government EasyPay system.
If payments of child support are not made voluntarily, DHS-Child Support can collect payments from wages, bank accounts, tax refunds, compensation or insurance payments, Centrelink benefits, or any other source of available funds that can be identified. The Department has broad powers of enquiry to ascertain whether a payer has any such financial resources, particularly if arrears are accruing.
If a payer is failing to make payments and the debt is escalating, the Department can bring a court application seeking orders that assets be sold to pay child support or maintenance arrears.
The Department can also issue a Departure Prohibition Order to prevent a payer from leaving Australia until the outstanding arrears are paid or an acceptable payment arrangement is entered into.
Non-Agency Payments apply to cases that are being collected by the Department of Human Services – Child Support. The payer can seek credit for in-kind or cash payments made in lieu of child support by advising the Department. If the payee agrees that such amounts were intended to be payments in lieu of child support, they will be fully credited against the payer’s child support liability.
However, if the payee does not agree, there are only very limited circumstances in which Non-Agency Payments can be credited. These are called Prescribed Non-Agency Payments (PNAPS) and primarily relate to:
- various educational expenses;
- essential medical and dental treatment; and
- payments towards accommodation, utilities and vehicle expenses of the payee.
Note: Prescribed Non-Agency Payments cannot be claimed by a payer who has at least Regular Care (14%) because the formula recognises that parents with regular care or shared care pay a reduced rate of child support on the basis that they are already contributing directly to these costs for the children.
Advice should be sought before making Prescribed Non-Agency Payments as the payer will only be able to receive a maximum credit of 30% of the future monthly liability, with any unused credit being carried over to the following months. The remaining 70% of the liability is required to be paid by the due date in order to be eligible for the 30% credit.
In general, the child support scheme is an administrative scheme which is designed to operate without the need for court applications. However, there are some circumstances in which a party may make an application to a court in relation to child support matters. The most common situations are listed below:
Child Support Legislation and Family Law Act 1975 (Cth)
Paternity Matters: either parent can apply to a court to resolve disputes involving paternity of children and entitlement to child support. The court may order DNA parentage testing in these cases. If a payer is excluded from paternity, a court may order the payee to repay child support paid by the payer.
Application for Leave to Change an Assessment that is more than 18 months old: a Court can give leave or permission to change an assessment that is more than 18 months old, but not more than 7 years old.
Court Review of AAT Decisions: Where a parent is dissatisfied with a decision by the Administrative Appeals Tribunal, an appeal can be made to a court but only on a question of law.
Child Support Agreements: Applications can be made to set aside child support agreements.
Lump Sum Applications: In limited circumstances, a court may order the payment of child support in a lump sum.
Stays Orders: An order to stay (or suspend) collection of child support can be sought from the court in limited circumstances. Alternative administrative remedies apply in some circumstances.
Maintenance Orders: Court orders and agreements can be made under the Family Law Act 1975 (Cth) for various types of maintenance payments, including maintenance for:
- Adult children (over 18) who are studying or have a mental or physical disability
- Children (under 18) who are living independently and applying for maintenance in their own right
- Step-children (step child maintenance)
- Spouses (spousal maintenance)
- Some cases where the payer is overseas
Enforcement Proceedings: A court can make orders to enforce the payment of a child support or maintenance debt.
Legal advice should be sought before making an application to a court. Applicants should seek advice about the relative merit of their case, and the risk of having a costs order made against them if their application is unsuccessful.
There are many cases where one parent is living in Australia and the other parent is living overseas.
Australia has reciprocal arrangements with many countries for the collection of child support. If the receiving parent is living in Australia and the paying parent is living in a reciprocating country, it is likely that the Department of Human Services – Child Support will be able to issue and enforce an Australian assessment of child support. Arrangements with each particular country differ, and some countries have better collection arrangements than others.
Disputes about parentage will need to be resolved before an assessment can be created. This can be difficult where one parent resides overseas.
Even if Australia does not have reciprocal arrangements with the country where one parent is residing, there may be some options for the payee to obtain child support. This is a complex area of law and legal advice should be obtained in each individual case.
Parents in Australia who have children living overseas may also be required to pay child support through DHS-Child Support. Often this child support has been ordered by a court in the country where the children reside. In some cases, it maybe possible to bring an application to an Australian court to review an overseas maintenance liability.
Parents can contact the Child Support Helpline at the Legal Services Commission for advice about overseas matters.
The content of the Law Handbook is made available as a public service for information purposes only and should not be relied upon as a substitute for legal advice. See Disclaimer for details. For free and confidential legal advice in South Australia call 1300 366 424.