Perth Child Support Lawyers

Child Support is the right of the child. It’s not the Father or the Mother’s right. The Family Law Act 1975 (Cth) says that parents have a responsibility towards their children which includes paying for their financial needs. So when you think of Child Support, think about your child benefiting from it, not you or the other party even when you think you are paying a large chunk of it to your ex and she or he is spending it on herself or himself and not on your child. It is expensive to raise a child and children have so many different needs which makes this area of law complex. School fees, medical, dental etc may be covered by child support.

Is there a formula for calculating Child Support?

Yes. The key components of the formula include the following:

• The cost of raising children from independent research as the basis for the formula
• The same self-support amount as deducted from each parent’s income before Child Support is worked out
• The level of care each parent provides for the child is considered
• Both parents’ income is taken into account and considered equally
• Children from first and subsequent families are treated in a similar way

How is Child Support Calculated?

Below is a basic formula which applies:

• Work out your Child Support income. If you have dependent children or more than two Child Support assessments, this will be taken into account at this step. This takes into account each parent’s taxable income plus any net rental or fringe benefits less the parenting self-support amount.
• Work out the total combined Child Support income by adding income of both parents together.
• Work out your income percentage by combining the Child Support income at Step 2 – each parent’s Child Support income can be viewed as a percentage.
• Work out your care percentage – a parent’s care percentage is based on the number of nights in a 365-calendar year the child lives with each parent.
• Work out your cost percentage – each party’s cost percentage is calculated from the percentage of care using a table contained in the Act.
• Work out the cost of your child – you will get either a positive or negative Child Support percentage. If the percentage is positive you need to pay Child Support.
• Work out your Child Support amount – each parent’s income percentage at Step 3 minus their cost percentage represents their Child Support percentage

You must also ensure that you keep the Registrar informed of any change within 14 days. The change will allow a recalculation of the assessment to take the change into account without the need for any formal application for a departure. The Registrar is allowed to depart from a Child Support Assessment in special circumstances if required and may initiate a change of assessment. The Registrar’s decision may be reviewed by the Administrative Appeals Tribunal. If the Registrar finds that your income has been underestimated the Registrar can retrospectively reassess your Child Support and may impose a penalty if your income is found to be at least 10% greater than the estimated amount.

• You and the other party may elect to stop a change to the Child Support assessment being initiated, however you cannot make this election if the receiving parent is receiving an income tested pension benefit or allowance.
• You can also ask the Registrar to allow credit for Child Support paid directly to the receiving parent or to someone else for example mortgage repayments school fees or other payments for the benefit of the child.
• You can withdraw an application for a Child Support assessment at any time before the Child Support Registrar accepts the application.

Can I object to a Child Support Assessment?

Yes, you can, based on your income and other factors permitting. You can also respond to an assessment to pay Child Support. The Child Support Agency has a procedure for dealing with objections and responding to objections to Child Support assessments. You should consult them to get the full facts.

Perth Binding Child Support Agreements

Parents can choose from two types of Child Support agreements under the Act, being Binding Child Support Agreements or Limited Child Support agreements. Perth Binding Child Support Agreements mirror the requirements for a financial agreement under the Family Law Act or under the Family Court Act. Binding Child Support Agreements have the following differences from limited Child Support Agreements:

• Each party must first seek independent legal advice from a lawyer about the  advantages and disadvantages and the agreement effects on their rights
• Each lawyer must provide a certificate that they provided independent legal advice to a party
• The agreement may be for any amount, even less than the assessed amount
• The agreement may only be ended by a new Binding Child Support agreement (for which independent legal advice is also required) terminating the agreement or by a court order setting it aside
• A Child Support assessment does not have to be in place to have a Binding Child Support agreement unless non-periodic provision is included in the agreement
• After signing, a copy of the agreement must be given to each party

Any Child Support Agreement must contain at least one of the following:

• Periodic Child Support
• A variation of the rate at which a parent is already liable to pay periodic Child Support
• Any provision that may be included in a departure order by a court
• In non-periodic provision, for example with school fees stating how it is to reduce the annual rate of Child Support payable under their Child Support assessment if at all
• A lump sum payment on any transfer or settlement of property stating that it is to be credited against the liability under the assessment.

Once an agreement is made you have the option of whether to register the agreement with the Perth Child Support Registrar. Relevant to this choice is whether an assessment is already in place and the type of Child Support that is payable under the agreement. If the agreement is registered, the payee can ask the Registrar to monitor and collect any periodic payments payable under the agreement. If arrears accrue, the Registrar has the power to garnishee the liable parents’ tax returns and treat their debt as one due to the Commonwealth. If an assessment is already in place the agreement should be registered so as to ensure that the Registrar updates the liable parents’ obligation to pay in accordance with the agreement. To register the agreement the parties must lodge with the Registrar an application for acceptance of the agreement using the form Child Support agreement. If an assessment is not in place:

• The parties need not register the agreement if they are content to enforce it between themselves.
• In the case of a limited agreement the parties will be unable to register their agreement until an administrative assessment has been made or applied for
• The parties may register a Binding Child Support Agreement whether an assessment is enforced or not

The Registrar has no power to enforce payment of non-periodic Child Support, but once the agreement has been registered in the Family Court, parties may file enforcement actions themselves.

You must have an administrative assessment in place before you may register an agreement that includes lump sum payments or provisions. Whilst it is usually beneficial to have an assessment in place before registering an agreement that includes third party non periodic provisions, such as school fees, so as to properly assess the effect of such payments being credited against any assessment, it is not mandatory as the acceptance of the agreement has the same effect as an application for an assessment in that a notional assessment will issue.

An assessment is mandatory for a lump sum provision as the lump sum acts as a credit against the assessment.

When an assessment is in force, register the agreement with the Child Support Registrar using the appropriate forms. Upon receiving notice that the Child Support Registrar has accepted their agreement, a party can register the agreement with the Family Court by sending the court a letter and an affidavit setting out the relevant information.

A stay order could order the:

• Child Support Registrar to stop or commence collecting from a payer’s salary
• Child Support Registrar to modify a garnishment notice not to collect a payers’ taxation refund to seize any and all administration collection among other things.

Is a Child Support Agreement right for you?

Like everything in life, there are advantages and disadvantages of entering into Child Support agreements.

Advantages

• Binding agreements are intended to provide a high level of certainty and finality about Child Support agreements for parents. Legal advice is therefore required to ensure that parents understand the consequences of making such an agreement and to provide some protection against coercive or misleading behaviour.
• A binding agreement is bound to be an advantage to a payer wanting to lock the other party into an arrangement which will remain fixed regardless of any future change in the parties’ needs or means that might render their agreement unfair.
• Parties have the freedom to arrange their own affairs flexibly, although the use of non-periodic provisions such as school fees and lump sum payments are available options to periodic Child Support under the act without an agreement.
• Any change requires consent or a court finding exceptional circumstances.

Disadvantages

• The requirements for ending a binding Child Support agreement are stringent.
• Circumstances change all the time, and it is possible that adherence to the terms of the agreement may be unfair. This renders them susceptible to risk of being challenged. Therefore, it is important that binding agreements are drafted in a way that takes account of the changing circumstances in which parties may find themselves.

Binding Child Support agreements cannot be varied. Neither can limited Child Support agreements. However, they can be terminated by a termination agreement or a new Binding Child Support Agreement or by Court order.

Limited Child Support Agreements

Limited agreements are more realistic as they may be ended after three years if a party so wishes or sooner in the case of a significant change of financial circumstances.

They do have to be in writing and be signed by both parties and lodged with Child Support Registrar but separate legal advice may be required.

The requirements for a limited agreement are that there must be a child assessment already in place and the annual amount payable under the agreement must be equal to or more than the assessed annual amount.

How can I terminate a Limited Child Support Agreement?

Limited Child Support agreements can be terminated by making a new Child Support agreement replacing the agreement, by an order of the court setting it aside, if the notional assessment changes by more than 15% from the previous assessment in any way not anticipated in the agreement or if one of the parties wants to end it. This provides a safeguard so that if circumstances change significantly the parties will not be locked into an agreement that does not reflect those new circumstances if more than three years has passed and a written notice is given to the Child Support Registrar by a parent who wants to end it. This recognises that it can be difficult to anticipate what will happen more than three years into the future and provides the parents and all parties with the flexibility to elect to end their agreement if it’s no longer suitable to their circumstances.

Change of care or suspension and termination of Agreements

In the absence of a change of care clause, every Child Support Agreement is suspended for up to 28 days if the eligible care percentage of care drops below 35%. The suspension may apply for up to 26 weeks if their agreement provides for more than a 28-day suspension. The parties may notify the Registrar within 26 weeks that they want a suspension for more than 28 days or special circumstance may have been established. The agreement resumes if the eligible carer becomes  eligible again within the relevant time. If that lapses without such a resumption, then the agreement is terminated.

Application to set aside Child Support Agreement

A party to a Child Support agreement may apply to the Court for an order setting aside their agreement under section 136 of the Child Support assessment Act.

Grounds for setting aside such an order

To set aside the agreement the Court must be satisfied that:

For both types of Child Support agreements

• That your agreement was obtained by fraud or a failure to disclose material information.
• That another party to the agreement or someone acting for another party exerted undue influence or duress in obtaining that agreement or engaged in unconscionable or other conduct to such an extent that it would be unjust not to set aside the agreement.

Limited Child Support agreements

• That a significant change in the circumstances of a party or  child  not covered by their agreement has taken place and it will be unjust not to set aside the agreement.
• That the agreement provides for an annual rate of Child Support that is not proper or adequate, taking into account all the circumstances of the case including the financial circumstances of the parties.

Binding Child Support agreements

• That because of exceptional circumstances that have arisen since the agreement was made relating to a party or child covered by the agreement, you or the child will suffer hardship if the agreement is not set aside.

Onus of proof

• The party applying to the Court bears the burden of proving his or her case.

Application for a Stay of Proceedings

If proceedings has been instituted in a court having the power to deal with the case for a departure from the assessment, a party may apply to the court for an order staying or otherwise affecting the operation of the Child Support assessment under the hearing if the court considers it desirable to do so taking into account the interest of those who may be affected by the outcome. The court has no jurisdiction to stay an overseas order in proceedings to vary a Child Support assessment.

Relevant matters include whether refusing to grant a stay will make any assessment or agreement nugatory, the balance of convenience any financial hardship if a stay is or is not granted, the financial needs of any child, any delay in applying, the bona fides of the stay and the merits of the application.

Do you require further assistance?

Entering into a Child Support agreement has both advantages and disadvantages depending on your circumstances and what you are hoping to achieve by entering into one.

We recommend that you first get legal advice before entering into a Child Support agreement so that you properly understand the difference between a limited and a binding Child Support agreement, the terms of a proposed agreement and its impact on you.

Our Family Lawyers can assist you with preparing a Child Support Agreement or give you advice before preparing one to ensure your rights are protected. Our Family Lawyers can also review Binding Child Support agreements drafted by another lawyer to ensure you understand what is at stake for you.

Contact our Family Lawyers to find out whether a Child Support Agreement is right for you on (08) 9468 3297 or via email at  office@abmslawyers.com.au.

Frequently Asked Questions