Parents’ Incomes

The child support assessment can be based on the formula set out in the legislation, or an agreement reached between the parents.

Formula Assessment

The current formula was introduced on 1 July 2008. It takes into account many variables including the incomes of each parent, the number and ages of children, the costs of children, the level of care each parent provides for the children, and whether either parent has a legal duty to support any other children.

The formula consists of three main elements:

  1. Parents’ Incomes
  2. Costs of Children Table
  3. Level of Care

The starting point is each parent’s taxable income for the previous year, plus other amounts which are automatically included such as:

  • Net financial investment losses (eg rental property, shares, managed investments)
  • Reportable fringe benefits
  • Foreign income
  • Reportable superannuation contributions
  • Some tax-free pensions or benefits
  • Some payments from the Department of Veteran’s Affairs

The total of these amounts is called the ‘Adjusted Taxable Income’.

The first step in the formula is to subtract an amount described as the ‘self-support’ amount ($23 523 in 2014) from each parent’s Adjusted Taxable Income. The self-support amount is the same for each parent.

If a parent has other relevant dependent children in their care, or is paying child support for other children, a further amount is subtracted from the Adjusted Taxable Income to recognize the costs associated with these commitments.  In general terms, a relevant dependent child is defined as a child who is in the care of the parent for at least 35% of the time.  The definition does not generally include step-children.

The remaining income is called the Child Support Income.  Each parent’s Child Support Income figures are added together to obtain the Combined Child Support Income.  This combined figure determines the costs of the children by reference to a Costs of Children Table.

The individual incomes of parents determine each parent’s share of the costs of children that they are required to meet.

Costs of children

The Costs of Children Tables are based on Australian research which looked at the amount of money spent on raising children in households with differing levels of income.   The Costs of Children Tables are adjusted each year in accordance with changes in average incomes.

The Costs of Children Tables also take into account the number of children (up to a maximum of 3) and the ages of the children who require support.  There is a table for children from 0-12 years, a table for children 13 years and over, and a table for children of mixed ages.

The table is available here: http://www.humanservices.gov.au/customer/enablers/child-support/child-support-assessment/working-out-child-support-using-the-basic-formula

Level of Care

The amount of care provided by each parent can be counted as a contribution to the costs of the children.   The level of care is generally counted in nights.  However, a request can be made to determine the level of care based on hours rather than nights.

Parents who provide care for less than 52 nights (Less than Regular Care) are not considered to be providing care to an extent that should impact on the child support assessment.  Accordingly, these parents have a cost percentage of 0%.

Parents who have ‘Regular Care’ of 52 - 127 nights per year are said to meet 24% of the costs of the children through care.  For parents with this band of care, the cost percentage is a flat 24%.

Shared Care of 128 - 237 nights per year is worked out on a sliding scale delivering a cost percentage of 25-75%.

Parents who have ‘Primary Care’ of 238 - 313 nights are said to meet 76% of the costs of the children through care.

It should be remembered that increasing levels of care generally reduce the amount of child support to be transferred in periodic payments because it is recognized that parents contribute to the overall costs of the child by paying for a range of items while the child is in their care.  A contribution to the child’s costs is not limited to the provision of food and accommodation while the child is in their care.  Contributions to the costs of the child can include an equitable contribution to any costs including clothing, public school costs, medical and pharmaceutical expenses, and extra-curricular activities.

While the child support formula does not prescribe in minute detail how these costs are to be divided, parents should be aware that a significant level of care will reduce the rate of child support because it is assumed that a contribution is being made to the whole range of costs associated with raising children while they are in each parent’s care.

Parents need to be able to negotiate with each other about how they will meet the costs of children while they are in their care.  A mediation service may be able to assist if parents are unable to reach agreement.

A table that converts the number of nights of care into the percentage of a child’s costs is below.

Nights per year CSA terminology Equals Percentage of costs met through care
0-51 Less than Regular Care = 0%
52-127 Regular Care = 24%
128-237 Shared Care = 25-75% (sliding scale)
238-313 Primary Care = 76%
314-365 Greater than Primary Care = 100%