Child support basics: What is it & what are my options?
What is child support?
Child support is a payment made by one or both parents to the other to assist in the cost of looking after children until they reach the age of 18 or complete high school.
The Department of Human Services (DHS) utilises a formula to calculate how much child support you should pay or receive. This is worked out based on:
– How many children you each have;
– How old the children are;
– How much money you need to support yourself;
– The income of the parents; and
– The percentage of care each parent has for the children.
The cost of the child is based on the research about how much parents spend to raise a child in Australia. These figures are updated each year to ensure they stay current. These amounts are also different for different people as the research has established that people that earn different incomes spend different amounts on their children.
This is a complex formula that leads to much confusion. The DHS has provided a child support estimator online to assist parents with this process.
How is child support paid?
You can choose to manage the payment of child support between yourselves. This does not involve the DHS at all. Parents who choose this option decide how much and how often child support is paid. This can affect your Family Tax Benefit if you receive any. This can also be risky as the DHS cannot enforce payment of an amount you have agreed to with the other parent.
The next option is private collection. To do this, you can ask the DHS to undertake an assessment for you. This can also be utilised if you have registered a child support agreement with DHS. This calculates the amount of child support that one parent needs to pay the other. A private collection arrangement would mean you and the other parent decide when and how this is paid.
The DHS would not become involved in this type of arrangement unless you asked them to be. If a parent falls behind in their payments, the agency can collect up to three months of arrears or nine months in extreme circumstances. This system works well for parents who are amicable.
If parents are unable to communicate, if there are issues with reliability in payment or if there are domestic violence issues, you can ask the DHS to collect on your behalf. This is called Child Support Collect. DHS can collect if a child support assessment has been made, if they have accepted a child support agreement or if there is a registered court order for child support.
For Child Support Collect, DHS collects the money from the paying parent and pays it to the receiving parent. The dates of these payments are set by DHS. If a parent fails to make payments, the DHS can take enforcement action including deducting money from a paying parent’s pay, intercepting tax returns and/or bank account deductions.
It is important that both parents continue to update the DHS regarding their circumstances to ensure that over or under payments are avoided and issues of debt recovery do not occur.
What if I want something specific in place for child support between the other parent and I?
You can enter into a private child support agreement with the other parent and this can be made binding and enforceable.
You may agree to cash payments, non-cash items such as health insurance or school fees, or a combination of these. These arrangements can be formalised by a Limited Child Support Agreement, which can have a limited life span, or a Binding Child Support Agreement which can remain in place for longer. Both parties need to have legal advice for a Binding Child Support Agreement.
If you would like to consider one of these options, we can provide you with the necessary advice. Many people negotiate property settlement, spousal maintenance and/or child support agreements at the same time.
Here are some examples of how a simultaneous settlement could work:
- The child support recipient parent agreeing to take less property from property settlement if all expenses are paid for the children until they turn 18 or finish high school, such as private health fees and associated costs and all health related costs.
- The child support recipient parent agreeing to take more property from property settlement than they might otherwise be entitled to, on the basis that they be paid no or relatively low child support in the future.
- The child support recipient parent agreeing to a settlement where they are paid certain child support (periodic amounts every week plus school fees and health costs paid for by the other parent), certain periodic spousal maintenance payments for a period of time and an agreed percentage of property.
The above arrangements can be negotiated and, once agreement is reached, drafted into binding and enforceable agreements by Daykin Family Law.
What if we do not agree with how much child support is being paid?
Parents often disagree with the estimation for child support. This can be as a result of not agreeing about the arrangements for time children spend with each parent or disputes about income. You can apply to DHS to have the assessment changed. If you still do not agree with the decision, there are other avenues you can take, and we suggest you seek legal advice from us about these issues.
I have a plan for what child support I would like for my children. What’s my first step?
The first step is to make an appointment for an initial consultation with us to discuss your options, your proposals and how your goals can be achieved in the most cost effective and amicable way. Daykin Family Law are experts in the Brisbane family law field and can assist you to resolve your issues so you can move on with your life sooner. Contact us today to discuss your situation and the options that can be specifically tailored for you.