Kerry Ktenas, Associate, outlines the fundamentals of child support obligations.
Parents have an obligation to financially support their children when they are under 18.
There are two ways to determine how much child support a parent is required to pay – either by obtaining an assessment from Services Australia (the Child Support Agency), or by coming to their own private agreement, known as a Child Support Agreement.
It is common for families to obtain an assessment from the Agency. The Agency calculates how much a parent is obligated to pay the other parent by considering:
- their respective annual taxable income;
- the number and age of children; and
- the number of nights the children are in each parent’s care.
If a parent does not pay child support, in full and on time, arrears will accrue and other penalties can apply. The Agency also has the ability to recover overdue child support, for example, by redirecting the payment of some of the payee’s wage until the arrears are discharged.
Parents may come to their own private agreement as to how much child support they pay each week, fortnight or month (called “periodic child support”) and/or how much they will contribute towards other fixed/recurrent expenses (called “non-periodic child support”) such as school fees and education-related expenses, private health insurance, sporting and extra-curricular activities and the like. It is important that these arrangements are documented by way of a Child Support Agreement and each parent will need to obtain their own independent legal advice as to the terms of the agreement and the advantages and disadvantages of entering into it. Registration of the agreement will prevent child support simultaneously accruing under the (Agency) assessment process.
If you would like to consider your options, or you require assistance with documenting a private agreement, our team can assist. Get in touch with us today on (03) 8602 2000 or firstname.lastname@example.org.