When people who have a child or children separate, there are two primary issues that usually keep them in contact with one another after separation; the ongoing parenting and financial arrangements for the children.
There is no law in Australia which requires separated parents to involve lawyers and formalise the ongoing parenting and financial arrangements for the children in legally binding documents or agreements. Many separated parents arrange and agree upon their post-separation co-parenting affairs informally, by mutual consent.
Generally speaking, this is the best way to do it if you can make it work. Social science research unequivocally tells us that children of separated parents benefit greatly from seeing their parents co-operate with one another in a mutually supportive way that is focussed on the children’s needs, free from unnecessary conflict.
When separated parents are unable to reach agreement about such issues, they may choose to obtain the assistance of a family mediator, registered family dispute resolution practitioner or family lawyer to assist them to resolve the issues.
The fact that they may need to do this should not be considered a failure on their part. Separation is complex and stressful for everyone. It is understandable that separated parents may need to reach out for professional help to assist them through difficult times.
In relation to the ongoing financial or child support arrangements for the children, separated parents have one of two options for formalising their arrangements. These two options are separate but not always mutually exclusive options, for reasons explained below.
Child support assessment
The first option is to obtain a child support assessment through Services Australia (Child Support), otherwise known as the Child Support Agency (CSA).
Sometimes it is necessary for one parent to apply for a child support assessment to satisfy their eligibility requirements for government support such as Family Tax Benefits Part A. More information about this can be found here https://www.servicesaustralia.gov.au/child-support-and-your-family-tax-benefit-part?context=21911
Making a child support assessment application is relatively easy. It can be made by either parent online here:
Alternatively, the application can be made over the phone by calling 131 272.
Apart from your personal details, the main issues that you will need to address and confirm in your application are the parenting arrangements for the children and what you and the other parent earn. If you do not know what the other parent earns, don’t worry, the CSA can help you find out.
After you contact the CSA to make your application for a child support assessment, the CSA will contact the other parent to confirm their details, the parenting arrangements, and their income.
Once this is done, the CSA will produce a child support assessment, which is a legal decision requiring one parent to pay child support to the other.
Child support may be paid either directly between the parents or via the CSA, otherwise known as an “Agency collect” arrangement.
The weekly amount payable under a child support assessment is determined primarily by reference to each parent’s income and the parenting arrangements for the children.
If, for example, both parents earn $75,000 per annum and share the care of the children equally, this situation will be child support neutral and neither parent will be required to pay child support to the other for so long as those factors remain in place.
If, on the other hand, party A earns $50,000 and party B earns $100,000 and has the children 4 nights’ per fortnight, party B would be required to pay party A child support under any child support assessment.
You can check this yourself and enter in different configurations of time and salary using the child support estimator here https://processing.csa.gov.au/estimator/About.aspx
There are other special factors that may affect a child support assessment and it is open to either parent to make a application to change the assessment by reference to such factors. This is known as an Application for Change of Assessment (CoA) and it is usually made after the CSA has made a child support assessment.
A CoA may be made by either parent if one or more of ten special circumstances apply to their situation, as follows:
- The costs of raising the child are significantly affected by the high costs of spending time or communicating with the child.
- The costs of raising the child are significantly affected because of their special needs.
- The costs of raising the child are significantly affected because the child is being cared for, educated or trained 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 you’ve paid or transferred money, goods or property to your child, the receiving parent or a third party, for the child’s benefit.
- The costs of raising the child are significantly affected by the parent or non parent carer’s child care costs, and the child is under 12 years of age.
- Your necessary expenses significantly reduce your capacity to support the child.
- The child support assessment is unfair because of the income, earning capacity, property or financial resources of one or both parents.
- Your capacity to support the child is significantly reduced because you’re supporting another child or person.
- Your responsibility to support a resident child significantly reduces your capacity to support another child.
You can read more about CoAs here https://www.servicesaustralia.gov.au/changing-your-child-support-assessment-special-circumstances?context=21911
The weekly, regular child support that is payable by one parent to the other under a child support assessment is called “periodic child support”. Periodic child support is not intended to count towards the paying parent’s contributions towards other, non-periodic costs of raising the children, such as school fees, medical costs and the costs associated with the children’s participation in extra-curricular activities.
So, for example, it is not uncommon for party A to pay party B weekly periodic child support as assessed, and also make additional financial contributions towards the children’s non-periodic expenses.
But what if party B refuses to make sufficient additional (or any) contributions towards the non-periodic expenses for the children? This is a common question that arises in practise.
In short, there is nothing that party A or the CSA can do to compel party B to make additional contributions towards the non-periodic expenses (without making a Court application); however, party A can make application to the CSA for a Change of Assessment based on party A’s additional contributions, if the circumstances warrant and one or more of the ten special reasons apply.
Binding Child Support Agreements
A Binding Child Support Agreement is a statutory contract that is made under section 80C of the Child Support (Assessment) Act 1989 (Cth) between separated parents for the future financial support of their children.
It is intended to govern each parent’s obligations in relation to the payment of periodic and/or non-periodic child support expenses for the children.
It is not necessary for there to be a child support assessment in place between the parents in order for them to enter into a Binding Child Support Agreement, however, parents who have a child support assessment will often concurrently enter into a Binding Child Support Agreement also.
A Binding Child Support Agreement may provide that:
- neither parent is required to pay the other periodic child support; or
- one parent is required to pay periodic child support to the other in a fixed weekly sum, in lieu of periodic child support that would otherwise be payable under a child support assessment; or
- each party is required to pay the other periodic child support in accordance with any child support assessment that is in place between the parents from time to time for children.
In relation to each party’s obligation to contribute towards the children’s non-periodic expenses, a Binding Child Support Agreement may also provide that:
- one parent pays all of the defined, non-periodic expenses for the children;
- each parent makes equal contributions towards all of the defined, non-periodic expenses for the children; or
- the parents make financial contributions towards all of the defined, non-periodic expenses for the children based on, and relative to, for example, their respective incomes.
Subject to certain specific statutory rules, there is no limit to how parents may arrange their agreement under a Binding Child Support Agreement. It is ultimately a common law contract that allows for infinite flexibility, subject to the rules under applicable legislation.
A Binding Child Support Agreement may be prepared on the basis that it terminates at a specific point in time (such as in 2 years), but usually it will be stated to terminate when each child turns 18 or finishes their high school education, whichever is later.
The Binding Child Support Agreement may be registered with the CSA and, if one parent does not comply with their obligation to pay periodic child support under the agreement, the CSA may intervene to enforce the terms of the agreement.
The CSA will not, however, intervene in relation to the payment of non-periodic expenses; this must be negotiated between the parents or is otherwise determined by the Federal Circuit and Family Court of Australia on application by a parent.
Usually parents are able to work out their differences under a Binding Child Support Agreement; it is not very common for family lawyers to be called upon to intervene and make application to the Court to enforce the agreement on behalf of a parent. It does and can happen, it’s just a situation that does not arise often in family law practise.
A family lawyer will, however, be required to prepare, advise on and sign the Binding Child Support Agreement, before it will be considered binding, enforceable by the Court and can be registered with the CSA.
The information above is provided by way of general guidance. If you require further information and guidance that is specific to your circumstances, please telephone us to make an appointment with one of our specialist family lawyers who can advise you on any aspect relating to child support and on the preparation and enforcement of a Binding Child Support Agreement with the other parent.