How is Child Support calculated in Australia


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How-Child-Support-is-CalculatedChild support  is the ongoing payment made by one parent / guardian to another to assist in the care and support of their child/ren.

The basic formula that determines which parent pays child support and how much they pay has the following components.

  1. The child support cost paid by a parent depends on the number of children involved and their ages.
  2. Typically, parents who respectively earn higher incomes tend to pay more child support.
  3. A parent can receive credits for covering certain expenses while in care for their child(ren).
  4. Parents are required to pay child support when your Income percentage is greater than your cost percentage.

What information is typically used to calculate support

  1. The taxable incomes of each parent
  2. The percentage of nights each parent has the child(ren) with them
  3. The number of children aged below 13 years of age, and the number of children aged between 13 and 17 years of age
  4. Details regarding other dependents that each parent has

The relevant legislation which applies to child support issues is the Child Support (Assessment) Act 1989.

The relevant Child Support legislation

The Child Support (Assessment) Act 1989 (Cth) imposes a duty on a parent to maintain their children in the form of child support payments.

There are many options available to parents regarding the administration of child support. These include:-

  • Self-Administration – this arrangement remains private and flexible between the parents.
  • The parents can enter into a Child Support Agreement – an Agreement is binding and can only be changed or ended in limited circumstances. These circumstances include an event occurring which has been specified in the Agreement, the parents making another Agreement, or by application to the Court.
  • Administrative Assessment – this is a formula calculation based on each parents’ income and percentage of care of the child(ren). The child support may be collected privately or through the Child Support Agency.
  • Court Order – the amount of child support is determined by the Court.

How Child Support is Calculated

There are 8 steps to calculating the basic child support formula:

  1. Calculate each parent’s Child Support income. This is typically the taxable income of each parent minus the self-support amount which currently is $21,622.00
  2. Combined both parent’s Child Support income to come up with one combined amount.
  3. Divide each parent’s individual Child Support income by the combined Child Support income to get an income percentage.
  4. Work out each parent’s care percentage of the child (see cost table below)
  5. Work out the cost percentage of the child (using the care and cost table below)
  6. Once you have worked out step 4 and step 5 you subtract the cost percentage from the income percentage for each parent.The outcome is called the Child Support percentage. In the event that the result is a negative percentage, that parent is assessed to receive Child Support because their share of the costs of raising the child/ren is more than met by the amount of care they are providing.On the other hand, if it is a positive percentage, that parent is assessed to pay Child Support because they are not meeting their entire share of the costs of the child directly through care. You then move on to steps seven and eight using only the positive Child Support percentage.
  7. The costs for each child is based on the parents’ combined Child Support income using the care and cost table below.
  8. The final Child Support figure payable is achieved by multiplying the positive Child Support percentage by the costs of the child. This final figure is the Child Support amount the paying parent needs to transfer to the other parent.
Child Support Care and Cost table

Child Support Care and Cost table

Note: This is only a guide. If you have different care arrangements for various children, you might have different Child Support percentages for each child.

 

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