Calculating Australian Child Support and Care Percentages
Child support is the term that describes what one parent pays the other parent after separation to assist with the costs of their child.
Ways to decide child support in Australia
You have multiple options for how to decide on a child support amount and whether to involve the government.
Self-manage the process
Self-management means parents reach a child support agreement but don't tell the government. The agreement may be not to pay child support at all.
This informal option gives you complete autonomy but no way to legally hold the other parent accountable.
Have a child support agreement approved
To make an agreement legally enforceable, first create a limited or binding document. The simplest way is to do this is to use the child support agreement form.
A limited child support agreement must be for at least the amount determined in your government assessment (explained below) because parents don't have to get a lawyer's advice for this type of agreement.
Parents can decide together to end a limited agreement at any time, and either parent can choose independently to end one after three years or when their assessment changes by more than 15 percent (usually due to a change in a parent's income).
A binding child support agreement, on the other hand, may be for any amount, including a lump sum. Both parents must have a lawyer's advice before signing.
A binding agreement is legally enforceable until parents reach a new binding agreement or until each child becomes ineligible (usually by turning 18 and completing secondary school).
Whichever type of agreement you choose, lodge your document with Services Australia for approval. A limited agreement isn't enforceable until it's approved. A binding agreement is legally enforceable as soon as it's signed, but you need approval from Services Australia in order to use their services.
Feel free to get creative with your agreement. For example, one parent could cover expenses like the child's school fees and have that count as child support. One parent could even do housework for the other, as long as both agree how much it's worth.
If you have a parenting plan, keep references to your agreement at a high level there so you don't have overlapping documents.
Get a child support assessment
If you cannot reach an agreement, ask Services Australia for a child support assessment. Afterward, one parent will be legally obligated to pay the amount set in the assessment, unless you have a child support agreement for a different amount approved.
Services Australia uses a formula that takes into account each parent's income and time spent caring for the child. (See details below.)
Child support assessment formula
Australia's child support formula is complex. The easiest way to estimate your payment is to use the government's child support estimator.
This estimates the amount you'll pay or receive if Services Australia does a child support assessment. You can also use the estimate to help you reach an agreement with the other parent.
The child support formula considers:
- Each parent's individual income (not including a new spouse's income)
- Each child's age
- How much time each parent cares for the children
It often changes slightly, due to fluctuations in typical child costs.
Normally, you'll receive child support if your care percentage (also known as a parenting time percentage) is at least 35 and is higher than your percentage of the total income both parents earn.
Otherwise, you will most likely pay child support.
Be careful to use accurate figures in the estimator and in government forms. Even seemingly-small errors, like forgetting to count your parenting time on public holidays, could cost you thousands of dollars.
Paying and receiving child support
Child support is normally paid weekly, fortnightly or monthly. Some parents prefer to pay annually.
To manage the logistics, parents have three options.
Self-management
If you self-managed the process of deciding a child support amount, you must also self-manage the payments. This means parents work out how to pay, when to pay and how to deal with late payments — all without Services Australia.
It's a good idea to put this information in writing and have both parents sign so there's no confusion.
Again, the main advantage of self-management is flexibility, while the major disadvantage is the lack of recourse if a parent fails to pay.
Private collect
If you did not self-manage the child-support-setting process, you will choose between two payment options: private collect and child support collect.
Private collect is basically self-management, except that Services Australia knows about your plan for payments.
Keep detailed records of payments while you're using private collect. If a parent fails to pay, these records will allow Services Australia to gather the owed payments after you switch to the child support collect scheme.
The receiving parent may switch to child support collect at any time.
Child support collect
Unless you self-managed the process of setting child support, you can have Services Australia collect and distribute child support.
The paying parent chooses their method: cheque, credit card, bank transfer, etc. Then Services Australia transfers each payment to the receiving parent's bank account.
With this scheme, Services Australia can collect back payments if the paying parent gets behind. This may involve taking the funds from the parent's paycheque, bank account, tax return or income support payment.
Child support and Family Tax Benefit
The Australian government pays Family Tax Benefit (FTB) to eligible parents with dependent children.
If you self-manage child support, you may only be eligible for the base FTB amount.
If you manage child support via another method, you can receive a certain amount before the support affects your FTB payment. Beyond that, additional child support will mean you get less FTB, regardless of whether the support is just an assessed amount or actually received.
Child maintenance: When a child is ineligible for support
Where neither parent may apply for support for their child, a court can order child maintenance. Alternatively, the parents can agree to maintenance in a consent order.
Usually, a parent pays maintenance because their adult child has a disability or is enrolled in school full time. A stepparent might also pay maintenance to their stepchild.
Getting an accurate assessment and care percentage
Guessing or estimating your care percentage can impact your child support assessment by thousands of dollars a year.
The Custody X Change app lets you quickly calculate your exact number of overnights, taking into account special occasions and school holidays.
You can also explore parenting schedules with Custody X Change to see how they affect your number of nights with your child. Plus, see how your number changes each year.
Whether you're paying or receiving child support, make sure your parenting time calculation is exact. The number will affect you, your child and the other parent for years to come.