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Child Support

Evolve Legal - Child Support <span id=child-support>   </span>

Child Support  

The fundamental aim of Child Support is to ensure that both parents contribute financially to the raising of their child or children after separation or divorce. This means that the child or children receives adequate financial support for their day-to-day maintenance, expenses, housing, activities, and education.

Parents can agree privately on how to meet their child’s costs, either informally or through a private agreement known as a Limited Child Support Agreement or Binding Child Support Agreement.

Generally, if parents cannot agree how to maintain their child, child Support will be assessed by a Child Support Registrar – care of the Australian Department of Human Services (DHS), also known as the ‘Child Support Agency’. It is an administrative process separate to parenting proceedings in the Federal Circuit and Family Court of Australia.

Under the Child Support Assessment Act, a parent or a non-parent carer of a child may apply for an administrative assessment of Child Support to be paid by a parent for a child. A ‘parent’ is defined to include biological, adoptive  or a parent of a child born by means of an artificial conception procedure (i.e. IVF).

Supporting Children, Resolving Disputes: A guide to child support in Australia

PRIVATE (INFORMAL) COLLECTION  

Parents can agree privately and informally on how they will support their children after separation.

Usually this is only suitable when:

(i)         there is a clear agreement between the parents for payments;

(ii)       there is amicable communication between the parents about Child Support;

(iii)      the parent receiving the benefit can rely on other parent making payment on time and in full.

The private collection plan does not need to be disclosed to DHS however, it is best to ensure the agreement between the parents is in writing and signed. There are ways that this private agreement can be formalised through family lawyers, discussed below under the heading Limited and Binding Child Support Agreement.

Under this option, the method and time in which Child Support is paid between the parents is based on the agreement reached between the parents but it is important to note the parents are not legally bound to comply with that private (informal) agreement. This option can often lead to disputes between parents.

DEPARTMENT OF HUMAN SERVICES COLLECTION  

The Department of Human Services (DHS), also known as the Child Support Agency can collect and distribute child support payments. This is the most common way parents pay and receive child support in Australia.

Here is an overview of how the DHS collects child support:

Assessment: The DHS first assesses the amount of child support that should be paid based on a formula that considers both parents’ income, the number of children, and the level of care provided by each parent. To see how that formula works, parents can visit the online child support calculator to assess what they may need to pay or be entitled to.

An application may be made by phone to the Child Support Registrar, online through the Department of Human Services website Application Portal or in writing by completing an “Application for Child Support Assessment” form.

Notice of assessment: Once an application is accepted, the Child Support Registrar will send the parties a notice of Child Support Assessment showing the amount assessed and how it was calculated. Child Support is assessed at an annual rate, payable monthly, and ends when the child:

(i)          Turns 18 years old; or

(ii)       Completes their final year of high school; or

Becomes “a member of a couple” or

(iii)      Other terminating events such as adoption or death.

Payment options: The DHS offers a range of payment options for parents, including direct debit, credit card, BPAY, and automatic payments from Centrelink payments.

Enforcement: If a parent fails to pay the required child support, the DHS has various enforcement options available, including garnishing wages, intercepting tax refunds, and taking legal action. We discuss this more below.

Collection and distribution: The DHS collects child support payments from the paying parent and distributes them to the receiving parent regularly.

It’s important to note that the DHS can only enforce child support payments assessed through their system. If parents have a private agreement for child support payments, the DHS is not involved and cannot enforce the agreement

BINDING CHILD SUPPORT AGREEMENT  

A Binding Child Support Agreement is a legal agreement between parents that sets out the amount and method of child support payments. The key feature of a Binding Child Support Agreement is that it is a legally enforceable agreement, which means that the terms of the agreement bind the parents.

Pros of a Binding Child Support Agreement:

Flexibility: A Binding Child Support Agreement allows parents to negotiate and agree on the amount and frequency of child support payments that suits their particular circumstances. This can provide more flexibility and control than the standard formula-based approach the DHS/Child Support Agency uses. Not only can you cover periodic (ongoing) costs weekly/monthly or yearly, but you also can insert how to meet other costs, such as specific medical or schooling-associated costs.

Certainty: With a Binding Child Support Agreement, the parties know exactly what the child support payments will be and when they will be made. This can provide greater certainty and security for both parents and children.

Avoids the DHS (Child Support Agency): By entering into a Binding Child Support Agreement, the parents can avoid dealing with the DHS, which can be time-consuming and complicated.

Cons of a Binding Child Support Agreement:

Can be difficult to change: Once a Binding Child Support Agreement is in place, it can be difficult to change. If circumstances change, such as a significant increase or decrease in income, it may be difficult to modify the agreement.

Legal costs: Creating a Binding Child Support Agreement can involve legal costs, which can be a barrier for some parents.

Lack of flexibility: While a Binding Child Support Agreement can provide more flexibility than the standard formula-based approach (noted above), it may not be as flexible as a private agreement between the parties.

It’s important to note that a Binding Child Support Agreement is a serious legal commitment and should only be entered into after careful consideration and legal advice.

LIMITED CHILD SUPPORT AGREEMENT  

A Limited Child Support Agreement is a legal agreement between parents that sets out the amount and method of child support payments. However, unlike a Binding Child Support Agreement, a Limited Child Support Agreement can only be in place for 3 years.

Pros and cons of a Limited Child Support Agreement:

Simplicity: Limited Child Support Agreements can be simpler and less costly than Binding Child Support Agreements, as they can be created without needing independent legal advice.

Flexibility: A Limited Child Support Agreement allows parents to negotiate and agree on the amount and frequency of child support payments that suits their particular circumstances. This can provide more flexibility and control than the standard formula-based approach the DHS/Child Support Agency uses.

Certainty: With a Limited Child Support Agreement, the parties know exactly what the child support payments will be and when they will be made. This can provide greater certainty and security for both parents and children. Parents can register the Limited Child Support Agreement with the DHS to have the DHS manage the periodic payments.

Cons of a Limited Child Support Agreement:

Limited duration: As the name suggests, a Limited Child Support Agreement can only be in place for 3 years. After that, the parties must renegotiate a new agreement, which can be time-consuming and may involve legal costs.

Difficulty in enforcing: Unlike a Binding Child Support Agreement, where parents get independent legal advice before signing, a Limited Child Support Agreement is difficult to enforce even if registered with the DHS/Child Support Agency.

Risk of misunderstanding: Limited Child Support Agreements can be less detailed and comprehensive than Binding Child Support Agreements, increasing the risk of misunderstandings or disputes between the parents.

Please note a Child Support assessment (through the DHS) must be in place before DHS accepts a Limited Child Support Agreement, and the payments set out in the agreement must be equal to, or more than, the annual rate in the assessment.

Receiving parents can choose private collect or DHS to collect the payments (if they register the agreement).

RECOVERING CHILD SUPPORT PAYMENTS  

If a parent doesn’t pay their child support, several steps can be taken to recover the payments.

Here are the steps that can be taken.

1.         Contact the Department of Human Services/ Child Support Agency: The first step is to contact the Department of Human Services (DHS), which collects and enforces child support payments. The DHS can investigate and take action to recover the child support owed. More information can be found here.

(i)         Provide evidence of non-payment: To assist the DHS in its investigation, it’s important to provide evidence of non-payment. This may include bank statements, invoices, and correspondence with the other parent.

Request enforcement action: The DHS has a range of enforcement actions available to recover child support payments. DHS may recover overdue Child Support payments from the paying parent through some or all of the following:

(A)       income support payment deductions

deducting from tax refunds

(B)       working with third parties

employer or bank account deductions

(C)       issuing overseas travel bans (known as a travel prohibition order)

2.         Private enforcement: If the DHS is unable to recover the child support owed, legal action may be able to be taken against the parent who has not paid. This may involve private lawyers and going to court to seek a court order from the family court to enforce payment.

Here are the key steps involved in a family court application to enforce child support:

Initiate the application: The first step is to initiate the application by filing an application with the Federal Circuit and Family Court of Australia. This involves completing the appropriate forms and paying a filing fee, which may be found here.

Serve the other party: Once the application has been filed, it must be served on the other party. There are strict requirements for how to serve family law documents. You can learn more here.

Attend the court hearing or hearings: The court will schedule a hearing to consider the application. Both parties must attend the hearing/s and provide evidence to support their case. The court will consider the evidence and decide on whether to enforce the outstanding child support.

Enforcement orders: If the court finds that the child support has not been complied with, it can make an enforcement order. This may include ordering the payment of the outstanding child support and imposing penalties and interest charges on any outstanding amount. The court may also order the seizure or sale of assets.

Compliance with the order: Once the enforcement order has been made, it’s important for the parties to comply with the order. Further legal action may be necessary if the parent who owes child support fails to comply with the order.

 

It’s important to note that a family court application to enforce child support can be a complex and time-consuming. It’s advisable to seek legal advice and assistance to ensure the best possible outcome.

Failing to pay child support is a serious legal matter, and can result in significant penalties and consequences, such as interest charges, legal fees, and even imprisonment in some cases. If you’re not receiving the child support payments you’re owed, it’s important to take action promptly to recover the payments.

FURTHER INFORMATION AND LINKS  

To decide which Child Support arrangement is right for your family, you can learn more about the options available through the Department’s website: https://www.servicesaustralia.gov.au/learning-about-child-support?context=60015

More information on managing your Child Support can be found on the Department’s website: https://www.servicesaustralia.gov.au/managing-your-child-support-agreements?context=60015

You may estimate your Child Support amount payable through the Child Support Estimator using basic information about you and the other parent: https://processing.csa.gov.au/estimator/About.aspx

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