Child Support Assessments  

Under the Child Support Assessment Act (1989) (Cth), child support must be paid by parents of children under the age of 18. The Australian Government has a formula to calculate the amount of child support a parent is required to pay based on their income, the income of the other parent, the cost of the child as well as the amount of time each parent spends with the child.

Child support assessments can be reassessed upon an application by either parent to the Child Support Agency.  Reassessments usually are sought when:

1. There is a change in financial circumstances of one or both of the parties.
2. There are significant physical or psychological costs associated for the child.
3. There is a change in living arrangements for the child.

The reassessment process is undertaken by the Child Support Registrar and once a new assessment is made, either party can seek to challenge the assessment through an internal review with Child Support and thereafter through an appeal in the New South Wales Civil and Administrative Tribunal (NCAT).  If a parent is still unsatisfied, they can lodge an Application in the Federal Circuit and Family Court of Australia for a child support departure order to seek a Court determine the amount of child support required to be paid.

Alternatively, parents are able to use their own calculation to determine the amount of child support to be paid and enter into a private Child Support Agreement.

There are many advantages of entering into a Child Support Agreement which can include:

1. Avoiding the uncertainty of having assessments made in the future if your circumstances change. This is particularly for people who anticipate their income will increase;
2. Having certainty as to the amount of child support required to be paid in order to effectively budget;
3. Ensuring the children’s financial needs are being met particularly if the agreement provides for more than what would be paid under any assessment;
4. Finalising issues in dispute. Usually, the provision of child support can be included as part of a package deal to formalise all issues in dispute between parties who have separated;
5. Providing the receiving parent with the ability to use the Child Support Agreement as evidence of income for any future loan applications or income assessments.

There are some disadvantages of entering into a Child Support Agreement which can include:

1. Depending on the type of Child Support Agreement entered, it may be binding and enforceable until the child is 18 years of age or a later time, regardless if there is a change in financial circumstances. This is particularly risky for the paying parent if they have a significant change in their employment or income.
2. The Child Support Agreement may not reduce the amount to be paid over the course of the Agreement which would have been the case if child support was assessed by the Government. This would only be for a Binding Child Support Agreement, and not a Limited Child Support Agreement (see article on Child Support)
3. A Binding Child Support Agreement cannot be terminated unless agreed or if it is terminated by a Court. This can be an expensive exercise if agreement is not reached to terminate the Agreement.
4. A Child Support Agreement may impact other government benefits which is why it is important to obtain advice from Centrelink about the impact of any Child Support Agreement before entering into one.

If you are unsure whether a Child Support Agreement is right for you, contact Lewis Family Lawyers today and we can discuss the different options available.