Who has to pay Child Support and how is it calculated?

It is no surprise that parents are obligated to pay for their children.

Whilst in a relationship, parents often pool their money together for the mutual benefit of the kids.

So what happens when the parents separate?

What if Dad only sees the kids every alternate weekend? Is there still an obligation for both parents to financially support their children?

The short answer is YES.

The financial obligation for a parent to support their child doesn’t simply end in the event of a separation.

In situations following a separation, the parents have the opportunity to make arrangements for the financial support of their child through either:

1. a private self-managed agreement;
2. a child support assessment, child support agreement or court order; or
3. the Child Support Agency (“CSA”).

But what happens when one party fails to pay child support?

Unfortunately, non-payment of child support is a fairly common occurrence.

In this article, we are going to explore your options if you find yourself in this situation.

Who owes who what?!

A parent’s obligation and liability to pay child support arises from a child support assessment, a child support agreement or a court order.

The parent required to pay child support is defined as the liable parent or the payer parent.

The CSA has the authority to assess, collect and enforce a child support liability pursuant to the Child Support (Assessment) Act 1989 (Cth) and the Child Support (Registration and Collection) Act 1988 (Cth).

If during an assessment period a payer parent has a liability to pay child support and fails to do so, then the CSA has the authority to chase that parent up.

The CSA can specifically do any one or more of the following:

1. impose late payment penalties (payable to the government NOT the other parent);
2. engage in a payment plan with the payer parent for missed payments;
3. recover the outstanding liability through:
   • income support payment deductions;
   • enforcing tax return lodgements and receiving any tax refund;
   • obtaining third party payments, including any compensation sums or insurance payouts;
   • employer or bank account deductions;
   • issuing a travel prohibition order for overseas travel;
   • litigation, including seeking the sale of the payer parent’s assets; and/or
   • prosecution and imprisonment.

What if a parent can’t afford to meet their child support expenses?

In some circumstances, it may not be possible for the payer parent to meet their child support arrangements.

In that event, it is open to the payer parent to negotiate a payment plan with the CSA.

The plan can include securing a periodic payment cycle or making lump-sum payments to the other parent.

The financial circumstances of the payer parent are highly relevant here and will be under very close scrutiny by the CSA.

The payer parent may also apply to the Commonwealth Government to waive or cancel any late payment penalties, costs, fines and debts associated with their child support liability.

Payments in lieu

A previously mentioned, it is possible for the liable parent to use some kind of third-party payment to absolve a child support debt.

A payer parent could also transfer an asset or provide the provision of services to satisfy their child support liabilities.

The CSA recognises ‘prescribed’ non-agency payments.

These specific non-agency payments may be accredited to up to 30% of the payer parent’s child support liability when very limited and specific conditions are met.

The following non-agency payments are currently accepted by the CSA:

1. childcare costs;
2. school fees;
3. school textbook and uniform payments;
4. fees for essential medical and dental services for the child;
5. the payee parents share of amounts payable for the payee parent’s home; and
6. the costs to the payee parent of obtaining and running a motor vehicle, including repairs and standard costs.

Generally, both parents will need to agree on the provision of non-agency payments in lieu of payment.

However, where one parent objects to having benefited from any non-agency payment, the CSA can be called in to make a decision based on the evidence of both the parents.

It is incredibly important that parents capture any child support agreements in writing for this purpose.

Ending child support arrangements

A payer parent can make an application to change, vary or terminate the child support liability.

In doing so, the payer parent may either seek a partial reduction of the child support arrangement or have it reduced to nil.

That parent may choose to apply to the Family Court of Western Australia or CSA to change these arrangements depending on the form of their initial agreement.

Generally, the CSA will only change child support arrangements where:

1. the child is turning 18 years old or has completed secondary education (despite being 18 years old);
2. the child marries or lives in a de facto relationship;
3. another person adopts the child;
4. the child dies;
5. the child is no longer in Australia and no longer a resident or citizen, and the payee parent is not a resident in a reciprocating jurisdiction;
6. the payer parent is no longer a resident of Australia or a resident in a reciprocating jurisdiction;
7. the parents reconcile and have reconciled for more than 6 months; or
8. if another person cares for your child under the relevant welfare law in Western Australia.

If you have any concerns about your current child support arrangements or you simply know someone who is going through a family law matter and needs advice, please don’t hesitate to contact our growing Family Law team here at Lynn & Brown Lawyers.

About the Authors: This article was co-authored by Stewart Kattowicz, Senior Associate at Lynn & Brown and Jasmine Trewin, Lawyer at Lynn & Brown.  Stewart has been practicing in Family Law for more than eight years and is well-regarded by his peers.  Jasmine has spent some time working at the Federal Court before joining Lynn & Brown in August 2021.