When going through a separation or divorce involving children, an important thing to consider is the issue of child support. Whether you are the parent seeking child support or the parent who is required to pay it, you will need to understand:

• the different child support options;
• how child support is calculated by Services Australia; and
• your rights to object to a child support assessment if special circumstances arise.

This article focuses primarily on child support assessments and addresses the following:

1. What is child support?
2. What is a child support assessment, and how is it calculated?
3. How is child support collected?
4. Should I apply for child support?
5. Can I challenge a child support assessment?

What is child support?

Child support refers to financial support payments made between separated or divorced parents, and in some cases, from parents to non-parent carers (if they meet the eligibility requirements), to help cover the everyday costs of raising a child or children under the age of 18.

In Australia, there are two types of child support.

Self-managed child support

For parents who are able to reach mutual agreement and are seeking greater flexibility in their child support arrangements, self-managed child support is a great option. This option allows separated parents to manage the collection and transfer of child support payments between themselves and mutually decide:

• how much they will pay or receive from the other parent;
• when those payments will occur; and
• the method by which those payments will be made.

Child support assessment

Alternatively, circumstances may arise where the parents are unable to reach an agreement or do not want to self-manage their child support. In this case, applying for a child support assessment may be the most appropriate option. 

What is a child support assessment?

Services Australia is the government body responsible for managing and administering the child support scheme in Australia. Services Australia conducts what is known as a “child support assessment” to determine which parent pays child support and how much.

The basic eight-step formula, as outlined below, is used to determine each parent’s capacity in meeting the financial needs of the child or children of the relationship and the value of child support required to meet those financial needs.

How is the child support assessment calculated?

Child support assessments are calculated using the following eight-step formula:

1. Determine the child support income of each individual parent. This is calculated by determining the value of their adjusted taxable income and subtracting it from their personal living expenses and any costs they are required to meet in relation to a dependent child or children from another relationship (if those children are not already part of another child support assessment);
2. Determine the total combined child support income of both parents;
3. Determine the income percentage of each parent. This is calculated by dividing the child support income of each parent in step 1 by the total child support income in step 2; 
4. Determine the percentage of care provided by each parent. This percentage is calculated based on the total number of nights the child or children are in each parent’s care in a single calendar year;
5. Determine the cost percentage of each parent. This is calculated based on the estimated costs each parent is likely to incur as a direct result of caring for the children for a specific number of nights. For example, if one parent has care of the children for 7 nights a fortnight, then their cost percentage will be estimated to be 50%. Alternatively, if the parent has the children for 5 nights a fortnight, their cost percentage will drop on the basis that they have fewer days with the children in their care and, as a result, will incur fewer costs that arise directly from caring for the children;
6. Determine the child support percentage of each parent. This is calculated by subtracting each parent’s individual cost percentage in step 5 from their income percentage in step 3. This calculation is used to determine which parent should receive child support and which parent should pay child support. The parent who gets a negative percentage score will be the one who should receive child support, and the parent who gets a positive percentage score will be the one who should pay child support;
7. Determine the costs of the children. This is calculated based on an assessment of the parents’ combined child support income in step 2, the number of children and the children’s ages; and
8. Determine the child support amount. This is the final step in determining how much child support is payable. The final figure is calculated by multiplying the positive child support percentage of the parent who must pay the child support in step 6 by the costs of the child or children as calculated in step 7.

How is child support collected?

In most cases, Services Australia collects child support payments and distributes them so that the former couple does not have to manage or control the process themselves. However, it is possible to have a private payment arrangement where the money is transferred directly rather than through Services Australia.

Should I apply for child support?

The child support system is complex, which is why we often advise people to contact Services Australia (directly or through their website) to get the specific information they require to understand their entitlements or liabilities.

Either parent can apply for a Child Support Assessment. However, it is worth doing the calculations first. You may expect to receive money, yet end up owing money.

An estimator of child support payments is available on the Services Australia website. Simply input details of your income, your partner’s income and how much time you each spend with the children, and it will estimate how much you will need to pay or how much you can expect to receive. While these are only estimates, it can be a useful guide, especially if you are trying to work out an appropriate amount of child support to pay or receive from the other parent.

Can I challenge a child support assessment?

Yes, there are four ways in which you can challenge a child support assessment:

1. You can apply for a change to your child support assessment via the online form on the Services Australia website however, you must demonstrate that “special circumstances” exist to justify the change.

The online form has limitations as it only allows you to apply if you can provide evidence supporting at least one of the 10 reasons upon which Services Australia may vary an assessment. Merely stating your dissatisfaction with the current assessment is not sufficient and will likely result in your application being rejected.

2. If you don’t agree with a child support decision made by Services Australia, you must submit your objection within the following timeframes: 

Objections that do not relate to care percentage

• If you live in Australia, you have 28 days from the date you receive the decision letter to object; and
• If you live outside Australia in a reciprocating jurisdiction that can accept Australian assessments, you have 90 days from the date you receive the decision letter to object.

Objections about care percentage

You can object at any time but if you are seeking to backdate any child support payments (for example, one parent seeks payment of unpaid child support that the other parent has failed to pay), you must object within the following timeframes:

• If you live in Australia, you have 28 days from the date you receive the decision letter to object;
• If you live outside Australia, in a reciprocating jurisdiction that can accept Australian assessments, you have 90 days from the date you receive the decision letter to object; and
• If you live outside of Australia, in a non-reciprocating jurisdiction that does not accept Australian assessments, you have 28 days from the date you receive the decision letter to object.

If you are not satisfied with Service Australia’s response to your objection, you can seek a review of the decision by the Administrative Review Tribunal which you must apply for within 28 days of receiving an objection decision letter if you live in Australia, and within 90 days if you live outside Australia in reciprocating jurisdiction. These deadlines do not apply to reviews about care percentage; however, if you wish to backdate any child support payments, it is unlikely that you will be able to do so if you seek a review outside of the 28 and 90-day timeframes.

4. If you are not satisfied with a decision made by the Administrative Review Tribunal, you can apply for a court appeal of the decision; however, scope to make an appeal is very limited.

Get advice from a family lawyer

The child support scheme can be complex, and every family is different. Before applying for child support or making definite child support decisions, we recommend that you obtain specialised legal advice. At Emera Family Law, we can offer tailored advice during our no-obligation initial consultation.