The Child Support Agency has produced a plain English document setting out ten possible reasons for varying child support payments.
Child support - background and definitions
As I highlighted in an earlier article, Child Support Arrangements in Australia, the two Acts of Federal Parliament that deal with child support (the most significant being the Child Support (Assessment) Act 1989) are unnecessarily complex. They include unnecessarily complex definitions and terminology.
Child support as a topic provides a real challenge to most family lawyers and judges. In an endeavour to make the legislation more user friendly, the Child Support Agency (CSA) has now produced a document in plain English detailing the various circumstances in which a party could seek to change the amount of child support.
Today, either parent of a child can make an application to the CSA for a determination of how much money one parent should pay to the other parent by way of child support. Such a determination by the CSA is called an Assessment. The Assessment specifies the amount of periodic child support that is payable. This is usually expressed as an amount that is to be paid each month by the non-custodial parent.
The person who is required to pay child support is referred to as either the "liable parent" or "payer". This person can only be the biological parent of the child. A person who is assessed to pay child support can have a child support assessment terminated if he can prove that he is not the biological parent of the child.
Child support is received by the carer entitled to child support, usually referred to as the "carer". This person is usually the biological parent of the child. However, the carer can be someone other than the biological parent of the child, for example, a grandparent. The carer is the person who is actually caring for the child. This person can also be called the "payee".
Non-periodic child support payments
As an alternative to periodic child support, or in addition to it, a liable parent can also be assessed, ordered or agree to pay "non-periodic child support". Non-periodic child support can include payment of school fees, medical expenses and medical insurance. If the liable parent is paying non-periodic child support, the periodic child support might be reduced to take the non-periodic payments into account.
Child support departure applications
If either the payer or the payee seeks to change the amount of the Assessment then that person makes a "departure application". This application is normally made to the CSA although it can sometimes be made to a Family Law Court. Such an application is called a departure application because the applicant is seeking either for the CSA or a Family Law Court to depart from the amount of the assessment or depart from the formula used in making the assessment.
The various matters which either the CSA, or a Family Law Court is required to take into account when determining a departure application are set out in a particular section of the Assessment Act. This section sets out 11 complex and often very difficult to understand grounds upon which a departure application can be based. Fortunately, the CSA has produced a plain English version, in which the 11 grounds have been reduced to 10 reasons.
Possible reasons for varying the amount of child support
- The costs of maintaining a child are significantly affected by high costs of enabling a parent to spend time with, or communicate with, the child. A parent's costs are high if, during a child support period, they total more than 5% of the parent's adjusted taxable income for the period.
- The costs of maintaining a child are significantly affected by high costs associated with a child's special needs.
- The costs of maintaining a child are significantly affected by high costs of caring for, educating or training the child in the way both parents intended.
- The child support assessment is unfair because of the child's. income earning capacity, property or financial resources.
- The child support assessment is unfair because the payer has paid or transferred money, goods or property to the child, the payee or a third party for the benefit of the child.
- The costs of maintaining a child are significantly affected by the payee's high child care costs for the child (and the child is under 12 years).
- The parents' necessary expenses significantly affect their. capacity to support the child.
- The child support assessment is unfair because of the income, earning capacity, property and financial resources of one or both of the parents.
- The parents' capacity to support the child is significantly
- Their legal duty to maintain another child or person
- Their necessary expenses in supporting another child or person they have a legal duty to maintain
- The high cost of enabling them to spend time with or communicate with another child or person they have a legal duty to maintain.
- The parents' responsibility to maintain a resident child 10. significantly reduces their capacity to support the child support child.
Lump sum payments for child support
Child support can also be paid by way of a lump sum rather than by periodic child support. Parties can agree, as part of a financial settlement between them, that a sum of money or portion of property to be paid to/transferred to the carer by the liable parent, is to be credited against future periodic child support payments. Where parents decide to enter into such an arrangement, the arrangement between them needs to be documented in either a Binding Child Support Agreement or a Terminating Child Support Agreement.
Use of child support trusts
A payer can elect to pay child support via a child support trust. Such a trust, if properly documented and administered, can result in substantial savings in income tax for the payer.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.