Child Support
One of the factors that can cause anxieties to both parents when separating is the ongoing financial maintenance of their children.
Child support is administered by a Commonwealth Government entity called the Child Support Agency.
Child Support Assessment
Upon separation, either parent can ask the Agency to prepare a child support assessment. This will be based upon the income disclosed in tax returns filed by both parents.
The child support system has undergone significant reforms over recent, culminating in a new formula system which is used to calculate child support amounts. In assessing the level of child support each parent is liable for the Child Support Agency will look at the following factors:
- The incomes of both parents - This information is typically obtained from the most recently lodged tax returns of each parent.
- The amount of time the children spend with each parent
- The ages of the children
The formulas for calculating the child support are complex, and the results vary from one family to another.
If either parent disagrees with the assessment (either theirs or the assessment of the other parent) they can have the assessment reviewed by the Agency itself. If parties have undertaken the review process within the Child Support Agency, but are still unsatisfied with the result, parties are entitled to take their matter to the Social Security Appeal Tribunal. The Social Security Appeal Tribunal is a free service which is completely independent of the Child Support Agency. It is important to recognize that there are strict time limits in relation to making an application to the Social Security Appeal Tribunal, so parties who wish to undertake this course of action obtain legal advice as soon as they receive an adverse decision from the Child Support Agency. Also, in some circumstances, disputes about child support can be linked with any Court proceedings between the parents.
Child Support Agreements
If two parents decide that the Child Support Agency is not an avenue they wish to pursue they are entitled to reach agreements in relation to child support, and in some cases these can be made into formal documents that are binding on both parties. Agreements might be in relation to the amount of child support paid, things that can be purchased as opposed to cash payments, or lump sums that can be paid instead of regular payments. Parties who wish to enter into a binding child support agreement are required to seek independent legal advice before doing so as it is important that these documents are drafted in a manner which is acceptable to the Child Support Agency. Once completed, these documents are lodged with the Child Support Agency are the payments or arrangements outlined in the agreement are enforceable against the parties.
Common Areas of Dispute
It is not uncommon for complications to arise in relation to individuals who work for themselves, or who are a beneficiary under a trust, company, or other entity.
It is also commonplace for issues to arise in relation to parties who have legitimately reduced their income for taxation purposes.
Issues such as this can be complex in the context of child support, and suspicion often runs high.
We recommend to separating parents that they take advice in relation to child support expectations at the earliest possible time so as to minimize the stress this area can have on individuals, and their ongoing relationship with the other parent.
Our firm is able to provide advise in relation to:
- Social Security Appeal Tribunal (including appearing on behalf of parties at the Tribnual),
- Child Support Departure Applications to the Federal Magistrate Court or Family Court of Australia,
- Child Support Agreements,
- Advise as to how the Child Support Agency are likely to treat trust structures, company interests, investments and other income sources.
