The Law Handbook 2024

Chapter 4.2: Parental responsibilities and child support 271 At the time of writing, the MTAWE is $82 524 The combined income of both parents is capped at $202 970 per year. For example, on the maximum income of $206 310 per year, the child support payable for three children over 13 years of age is capped at $58 592 per year. Child support agreements Parents can choose to either get Services Australia to collect child support, or to collect child support themselves. Parents can make agreements about the way in which child support is paid; for example, through periodic cash payments, non-cash payments (see ‘Collecting child support’, below) or a lump sum payment (including by way of property settlement). There are two types of agreements: binding child support agreements and limited child support agreements. The main difference between them is that parents are not required to obtain legal advice before entering into a limited child support agreement. The amount of child support payable in a limited child support agreement must not be less than the amount calculated in the Services Australia assessment. Agreements must be in writing and signed by the parties (ss 80C, 80E Assessment Act). If a parent is in receipt of Family Tax Benefit A, the amount of Centrelink benefits the parent will receive is based on the child support formula amount as though the child support agreement was not in place. This is called a ‘notional’ assessment and is worked out by Services Australia. Terminating agreements A binding child support agreement can only be terminated: • if both parents agree to do so after getting independent legal advice; or • by a court order; or • if a parent who is entitled to receive child support ceases to spend at least 128 nights per year with the child (s 80D Assessment Act). A limited child support agreement can be terminated: • if both parties agree to do so; • by either party after three years; • by either party if the notional assessment changes by more than 15 per cent; or • by a court order; or • if a parent who is entitled to receive child support ceases to spend at least 128 nights per year with the child (s 80G Assessment Act). How to change child support Lodge a tax return If a parent has not lodged a tax return or provided income information to Services Australia, Services Australia may determine an appropriate income to be used in making a child support assessment (known as a ‘default income’). Services Australia may change the income used in an assessment if the parent provides information about their income or if they lodge a tax return (ss 56, 58 Assessment Act). Adjustments to a parent’s income, in some instances, are not able to be backdated by Services Australia (ss 56, 58A Assessment Act). Estimate In some circumstances, if a parent’s income is expected to or has reduced by at least 15 per cent, they may give Services Australia an estimate of their current income (s 60 Assessment Act). If the estimate is accepted, Services Australia may change the rate of child support. A penalty may be imposed if a parent underestimates their income (s 64AF Assessment Act). Errors If there are any mistakes in the assessment (whether or not made by Services Australia or due to false or incorrect information provided to Services Australia), notify Services Australia (see ‘Contacts’ at the end of this chapter) so that the assessment may be changed (s 75 Assessment Act). Change of circumstances An assessment of child support may be affected by a parent’s change of circumstances (e.g. the birth of another dependent child, unemployment, or change to the arrangements for spending time with a child). Let Services Australia know as soon as changes occur as time limits may apply and some changes may not be backdated. If separated parents reconcile, Services Australia will suspend child support liability under an