Child Support Scheme
The Child Support Scheme is mainly covered by the Child Support (Registration and Collection) Act 1988 (Cth) (‘Collection Act’) and the Child Support (Assessment) Act 1989 (Cth) (‘Assessment Act’). There are also court rules and regulations.
Parents have the primary duty to maintain their children. This applies even if the parents have never lived together. In cases where the parents were not married or did not live together, Services Australia can make a child support assessment if there is evidence of who the child’s parents are.
The presumptions of paternity are set out in section 29(2) of the Assessment Act. If there is disagreement about parentage and the parents are not willing to have parentage testing, then it may be necessary to go to court (see ‘Application to court’ under ‘How to change child support’, below).
This primary duty of parents continues until a child reaches the age of 18 years, unless the child is able to support themself before then, marries or is adopted. In some circumstances, maintenance can be paid for children over the age of 18 years (see ‘Adult child maintenance’ in ‘Child and spousal maintenance‘).
Child support assessment
For an assessment of child support, separated parents can apply to Services Australia.
The assessment is based on a child support formula. This formula calculates each parent’s contribution towards the costs of raising a child based on the combined incomes of both parents and the care arrangements for the child.
The ‘Costs of Children Table’ sets out how much children cost by reference to the parents’ combined income, the age and number of children (s 5, sch 1 Assessment Act).
Parents must notify Services Australia about the care arrangements for the children. This may be in the form of an agreement (written or verbal), a parenting plan or court order.
At times, parents may not agree on the level of care. In most instances, Services Australia will make a determination based on the actual level of care. However, in limited circumstances where care is disputed, an interim care determination may be made and a person’s percentage of care for both child support and Family Tax Benefit purposes may be determined according to a written agreement, parenting plan, or court order for an interim period, rather than being based on actual care.
You should keep a record of the evidence of the change in care arrangements (the record could include, for example, diary entries, visits to healthcare providers or other services, and third-party statements).
‘Regular care’ is defined as having 14–35 per cent care of a child; ‘shared care’ is defined as having 35–65 per cent care of a child (s 5 Assessment Act).
An amount for self-support of each parent and the costs of children from new families are also taken into account.
Parents in same-sex relationships can apply for child support.
Children conceived through artificial conception procedures
A woman who gives birth to a child following an artificial conception procedure is the child’s legal parent. If the child is born to a woman while she is married or in a de facto relationship (either a same-sex or opposite-sex relationship) and her partner consented to the artificial conception procedure, then the partner is also the child’s legal parent. A woman’s partner is presumed to have consented to the procedure unless it is demonstrated, on the balance of probabilities, that he or she did not consent. In other circumstances, a known sperm donor may be regarded as a parent and have to pay child support.
For more information relating to parentage of children conceived through artificial conception procedures, see Chapter 4.3: Same-sex and de facto couples and families.
Minimum child support
If a parent is on a low income (e.g. Centrelink benefits), minimum child support of $8.82 per week to each family is payable (up to a maximum of three families). This amount is subject to indexation (s 66 Assessment Act) and the parent will be advised in writing of the new amount.
The minimum rate does not apply if there is a departure determination, court order or agreement in place (s 66(8) Assessment Act) or if a parent has at least regular care of one or more of the children (s 66(1) Assessment Act).
Fixed child support
A parent who declares a low income but is not on an income support payment may be assessed to pay a fixed rate of $29.25 per child per week (subject to indexation) up to a maximum of three children. This is called a ‘fixed assessment’ and may apply to parents who minimise income to avoid child support.
Maximum child support
The maximum child support payable is also known as the ‘cap’. The maximum child support is applied to the combined income of both parents up to 2.5 times the annual equivalent of all Male Total Average Weekly Earnings (MTAWE) and calculated using the Costs of Children Table.
At the time of writing (1 July 2022), the MTAWE is $81 188. The combined income of both parents is capped at $202 970 per year. For example, on the maximum income of $1917 393 per year, the child support payable for three children over 13 years of age is capped at $57 643 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.
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).
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).
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
A parent’s change of circumstances may affect an assessment of child support. Examples include the birth of another dependent child, unemployment, or change to the arrangements for spending time with a child. You should let Services Australia know as soon as changes occur as time limits may apply and some changes may not be back-dated.
If separated parents reconcile, Services Australia will suspend child support liability under an assessment (s 150E Assessment Act) for six months. Services Australia will amend the administrative assessment depending on when they are notified/become aware of the change in care arrangements.
Following separation and in some circumstances, either parent may apply to Services Australia to exclude additional income earned to meet post-separation costs. To apply, the requirements in section 44 of the Assessment Act must be met.
Administrative review: Change of assessment in special circumstances
Either parent may apply to Services Australia for an assessment to be changed (s 98B Assessment Act). Services Australia may also initiate a change of assessment (s 98K Assessment Act).
A change of assessment may not go back in time (more than 18 months and less than seven years from the date of lodgment), except with the court’s permission (see ‘Application to court’ under ‘How to change child support’, below).
An application for a change of assessment should be lodged as soon as possible as time limits may apply. You can’t apply for a change of assessment if your case has ended.
To apply to change an assessment, you must show that one of the reasons below apply, that there are special circumstances, and that it is just, equitable and proper to change the assessment (s 117(1) Assessment Act).
The reasons to apply for a change include:
- the costs of helping the parent spend time or communicate with the child;
- the special needs of the child;
- costs of the child being cared for, educated or trained in the manner the parents intended;
- income, earning capacity, property or financial resources of the child;
- money, goods or property received by the child, payee or other person for the benefit of the child;
- high childcare costs;
- either parents’ necessary expenses for supporting themselves;
- income, earning capacity, property or financial resources of either parent;
- legal duty to maintain another person or other child; and
- additional income earned for the benefit of a resident child (see s 117(10) of the Assessment Act for the definition of ‘resident child’).
To apply for a change of assessment, fill in the CS1970 form.
Administrative review: Child Support Regulations
A paying parent can apply for an administrative review under Regulation 11 of the Child Support (Assessment) Regulations 2018 (Cth) if, due to exceptional circumstances, they were unable to provide information about their adjusted taxable income at the correct time but did so within a reasonable time frame in light of the exceptional circumstances.
An objection may only be lodged against some decisions made by Services Australia (including some change of assessment decisions). These decisions are listed in section 80 of the Collection Act.
An objection must be made within 28 days of receiving the notice from Services Australia or longer by seeking an extension of time (ss 81, 82 Assessment Act). The other parent is provided with a copy of the objection together with any attached documents. They may respond by opposing or agreeing to it. Services Australia will make a decision on the objection in writing usually within 60 days.
Application to AAT
The Administrative Appeals Tribunal (AAT) (the Social Services and Child Support Division) can review certain objection decisions made by Services Australia (s 89 Collection Act). An application may be made to the AAT within 28 days of receiving the letter or notice of objection decision (or longer, by seeking an extension of time).
It is strongly advised that you get a lawyer to help you apply to the AAT because if your application is incorrect, it may be dismissed.
Application to court
An application to court can be made in the following circumstances:
- if a person disputes Services Australia’s acceptance or refusal of an application for assessment on the basis of paternity issues. The court will decide the parentage dispute and declare if a person should or should not be assessed in respect of the costs of a child (ss 106A, 107 Assessment Act);
- if a person is found to not be the father, the court will decide if an order should be made for repayment of the child support wrongly paid (s 143 Assessment Act). The amount ordered to be repaid is able to be registered for collection by Services Australia (s 17A Collection Act);
- if a parent seeks an order for child support to be paid in a lump sum or other non-periodic amount (s 123 Assessment Act);
- to set aside a child support agreement where parents cannot agree to change or end a child support agreement (s 136 Assessment Act);
- to depart from a child support assessment if Services Australia or the AAT says the case is too complex or both parents have another application in court and the court is satisfied that it would be in their interest to consider both matters together, and there are special circumstances (s 116(1) Assessment Act);
- to obtain the court’s permission to extend the time to change an assessment beyond 18 months and up to seven years (s 111 Assessment Act);
- to appeal an AAT decision on a question of law (s 44(1) Administrative Appeals Tribunal Act 1975 (Cth) (‘AAT Act’)),
- to appeal to the Federal Court or the Federal Circuit and Family Court of Australia against a departure prohibition order (s 72Q Collection Act) (see ‘Departure prohibition order’ under ‘Child support debt’, below);
- to enforce unpaid child support (see ‘Enforcement order’ under ‘Child support debt’, below);
- to temporarily stop an assessment, collection or payment of child support (also known as a ‘stay order’). This can happen where there is an application to Services Australia, the AAT, or the court, which has not yet been decided. The court is able to make a stay order if it considers that it should do so, taking into account the interests of those who may be affected (s 111C Collection Act; s 44A(2) AAT Act).
You should get legal advice to make sure you have correctly applied to the court, within the time allowed. If your application is incorrect, it may be dismissed and the court may order you to pay the legal costs of the other party.
Collecting child support
Parents can arrange private collection where payments – set by an order, assessment or agreement – are paid by one parent directly to the other parent. It is wise to keep receipts or a record of payments as proof of payment.
If private collection arrangements are not working, contact Services Australia to take over the collection of child support payments (s 39 Collection Act) (see ‘Child support collection by Services Australia’, below). If you have concerns of violence or threats from the other party, contact Services Australia and/or Centrelink. It may be recommended that your child support case be registered for collection with Services Australia, or you be exempted from pursing the father for child support.
If you receive the Family Tax Benefit (FTB), to avoid being overpaid, ask Centrelink to pay your FTB by the disbursement method and ask Services Australia to collect your child support. If you do not ask for your FTB to be paid by the disbursement method and for Services Australia to collect your child support, Centrelink will re-calculate your FTB for past years if the payer’s tax returns show income higher than the assessment as it is assumed that you are entitled to receive more child support.
You can personally take court action to recover any child support that has not been paid (s 113A Collection Act) (see ‘Enforcement order’ under ‘Child support debt’, below). However, note that you are responsible for your own legal costs. You must also notify Services Australia within 14 days of any court orders that are made.
Child support collection by Services Australia
If requested, Services Australia can collect periodic child support, adult child and spousal maintenance payments, and repayment of wrongly paid child support. In some instances, overdue payments may also be collected (s 28A Collection Act). Services Australia will need details of the relevant assessment, agreement or court order (ss 23, 25 Collection Act). Methods of Services Australia collection include deduction from salary, wages or Centrelink pensions and benefits, collection from another person who holds money on behalf of a parent or interception of tax refunds. Services Australia can impose a penalty for late payments (s 67 Collection Act). See ‘Late payment penalties’ under ‘Child support debt’, below.
A parent who has less than 14 per cent care of their children (i.e. less than one night per week) can make direct payments to the other parent or to a third party for the benefit of the child. These are called ‘non-agency payments’ (NAP). Keep proof of payment to send to Services Australia (e.g. bank deposit stubs, receipts or a bank statement). If Services Australia is not notified, these payments may not be taken into account.
If both parents agree that the payment was meant as child support, Services Australia will credit the NAP amount towards child support (ss 71, 71A Collection Act).
If both parents do not agree that the payment was meant as child support, Services Australia can only credit the amount if it falls under a special type of NAP specified in regulation 5D of the Child Support (Registration and Collection) Regulations 1988 (Cth) (‘Collection Regulations‘) (known as a prescribed payment) and at the time the payment was made the payer has less than 14 per cent care of the relevant children.
Specified payments in regulation 5D of the Collection Regulations are:
- childcare costs;
- pre-school or school fees;
- uniforms and school books;
- medical and dental services;
- rent or security bond for the payee’s home;
- utilities (e.g. gas, phone, electricity), rates or owners corporation charges for the payee’s home;
- home loan on payee’s home; and
- purchase, running or repair costs of payee’s motor vehicle.
Services Australia will credit specified payments at the rate of 30 per cent of the assessed child support each payment period, if the balance of child support is paid on time.
Payees who receive more than the base rate of FTB need to be aware that when Centrelink is notified of a prescribed payment, this payment will be included in the maintenance income test used to calculate FTB.
Child support debt
It is important to get legal advice as soon as you get behind in making child support payments as time limits may apply to certain applications to reduce the debt.
You are still required to pay off your child support debt after the assessment has ended or after the child has turned 18.
In some circumstances, you may seek an administrative review of your outstanding child support debt through Services Australia or through the court system.
A parent may not be able to pay child support at the rate assessed by Services Australia, causing a child support debt. A parent may be able to apply to pay less. (See ‘How to change child support’, above.)
Late payment penalties
Where Services Australia has imposed late payment penalties, you may request that they waive the penalties. This is called ‘remission of penalty’ (s 68 Collection Act).
Departure prohibition order
If a parent has not made satisfactory arrangements to pay a large child support debt, Services Australia may prevent them from leaving Australia by making a departure prohibition order (s 72D Collection Act).
Where there are outstanding child support payments either Services Australia or a parent can apply to the court for an order for payment of the child support debt. The court can make an enforcement order, such as for seizure and sale of property and attachment of earnings (chapter 20 of the Family Law Rules 2004 (Cth)). (Also see ‘Private collection’ under ‘Collecting child support’ above.)
Centrelink and child support
If you are applying for a Centrelink benefit, Centrelink may ask you to apply for child support within 13 weeks.
Parents who do not do this may be paid at the minimum rate of FTB Part A. The amount of child support payments that a person receives may affect the FTB paid to that person. For more information, contact Centrelink on 13 61 50.
Centrelink accepts that there may be reasons for a person not to apply for child support. These include the other parent is unknown or cannot be located after efforts have been made; or the applicant parent fears violence or threats from the other parent.
You usually cannot claim backdated child support payments for any period in which Centrelink grants an exemption from pursuing the other parent for child support. Discuss these matters with a Centrelink officer.
Centrelink is not required to approve child support agreements lodged with Services Australia. Centrelink will calculate a parent’s entitlement to FTB Part A on the basis of a notional assessment of child support made by Services Australia. (Also see ‘Child support agreements’ under ‘Child Support Scheme’, above.)
Family violence and child support
Financial abuse or economic abuse is recognised as a form of family violence in the Family Violence Protection Act 2008 (Vic). Financial abuse may be perpetuated through the child support system by avoiding paying child support, and by misusing child support procedures and legal processes.
For more information about family violence, see Chapter 4.4: Family violence.