Separation & Money: Child Support

Key points

  • If you are separated and take care of one or more children from a former relationship, at least part time, you may be entitled to Child Support
  • Use the governments Child Support Estimator to get an estimate of Child Support and use this as the starting point for Child Support arrangements
  • Based on your circumstances decide what approach you want to take to arranging Child Support – Self Managed, Child Support Assessment or a Child Support Agreement – and how you want the payments to be made – privately or via the Child Support Agency 
  • Your Child Support arrangements may affect other Government benefits like Family Tax Benefit Part A

What is Child Support?

Child Support Payments are usually payments made by one parent to the other parent to help meet the costs of raising children. Sometimes both parents are required to make Child Support Payments to a third person who is looking after a child.

It is generally paid until a child reaches 18 years of age (or until they finish the school year if they turn 18 while at school).

If you have children, it’s one of the most important financial issues to sort out with your ex-partner.

Child Support Options

Child Support can be arranged a number of different ways. The best way for you will depend on your circumstances and the nature of the relationship you have with your ex-partner.

Self managed – you and the other person make all the decisions about child support including how much is paid, when it is paid and how it is paid. You don’t need to contact the Child Support Agency or register your arrangement with them. Importantly, you can still ask them for help if you need it. If you “self manage” your child support you can only claim the base rate for Family Tax Benefit Part A (see below).

Child Support Assessment – you can ask the Child Support Agency for an assessment. They will tell you who needs to pay and how much they will have to pay using a formula based on things like income and percentage of care provided by each person. You can arrange to be paid privately or through the Child Support Agency.

Child Support Agreement – you can make a formal agreement with the other person about child support. This agreement can be either:

  • limited child support agreement”, or 
  • a “binding child support agreement”

When you make a limited child support you must have a Child Support Assessment and the agreed payments  must be equal to or more than the annual rate in the child support assessment. You can make a limited child support agreement without independent legal advice.

When you make a binding child support agreement you can agree to payments that are more than or less than the amounts that would be calculated using a Child Support Assessment, but both parents must have independent legal advice to enter into a binding child support agreement.

More information on Child Support options is available here.

Arranging the payments

If you choose to self manage your child support you must also agree how Child Support payments will be made.

If you use one of the other approaches you can arrange to be paid privately or through the Child Support Agency.

If you expect difficulties in being paid by your ex-partner it probably makes sense to ask for payment through the Child Support Agency.

Getting an estimate of Child Support

Regardless of how you plan to manage Child Support it makes sense to get an estimate of Child Support payments. If nothing else it can help provide a starting point for negotiations with your exp-partner. You can do this quickly and easily using the Department of Human Services Child Support Estimator. You’ll need to provide details about parents, income, children and care arrangements to get an estimate but you can do this anonymously.

How Child Support may affect other Government benefits

The Family Tax Benefit is a Government benefit designed to help with the cost of raising children. It has two parts known and Part A and Part B.
Part A is paid per child and is dependent on family circumstances. Generally it is payable if family income is less than $80,000 per year. More information on Family Tax Benefit Part A is available here.
Part B is paid if you are a single parent, a non parent carer, a grandparent carer or a member of a couple with one main income. For single parent families Part B is generally payable when income is less than $100,000. More information on Family Tax Benefit Part B is available here.
 
Child Support and how you arrange it can impact Family Tax Benefit Part A. In short, Child Support that you are paid over a certain amount may reduce the amount of Family Tax Benefit Part A that you are paid. Collection or non collection of unpaid Child Support can also affect your Family Tax Benefit Part A. More information on this is available here.
 

You may also be entitled to the following Government benefits:

Parenting payment – this payment is available to the principal carer of a child that is less than 8 years of age (or less than 6 if you have a partner) if you meet the income, assets and residency eligibility tests. More information on this payment is available here.

Rent assistance – this payment is available if you receive certain other payments from the Government (including more than the base rate of Family Tax Benefit Part A and Parenting Payment) and you pay rent. More information on Rent Assistance is available here.

Child care subsidy – this payment is made directly to child care providers to reduce child care fees for people who care for children 13 years of age or under (or aged 14 – 18 with a disability) at least 2 nights per fortnight, are liable for child care fees at an approved child care service and meet the residency rules. Extra support is also available with the Additional Child Care Subsidy. More information on these subsidies is available here.

Health Care Card/Low Income Health Care Card – these are concession cards that provide access to cheaper medicines and other discounts. You’ll get the Health Care Card if you receive one of the eligible Government payments (which includes Parenting Payment). Eligibility for these cards may also provide access to a range of State Government benefits on things like energy costs, car registration costs and public transport.

 

You can register for MoneyBrilliant online at www.moneybrilliant.com.au or download our app from the App Store or the Play Store.

This summary has been prepared by MoneyBrilliant Pty Ltd (AFSL 492711, ACL 493068). The information in this summary is of a factual nature only. We are not suggesting or recommending that you take any particular course of action in relation to any financial product or service. It does not take into account your personal circumstances or objectives. If you need financial advice or taxation advice you should seek advice from a licensed financial adviser or tax agent. You may also be able to access additional information from the websites of the Australian Securities and Investment Commission (ASIC) and the relevant product providers.

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