The Legal Practitioner's Guide
1.3 (b) Formula 1 example
Adam and Emma apply to CSA for an administrative assessment for Jimmy who is 10 years old
and who is in Emma's care for 300 nights per year and Adam's care for 65 nights per year.
(Note: this example uses values for child support periods starting in 2008.)
Step 1.
Work out each parent's child support income by subtracting the self-support amount and any
relevant dependent child amount from each parent's Adjusted Taxable Income (ATI). Emma's
ATI is $53,252 and Adam's ATI is $73,252. Neither parent has a relevant dependent child.
The self-support amount that applies is $18,252.
Emma's child support income is $53,252 - $18,252 = $35,000
Adam's child support income is $73,252 - $18,252 = $55,000
Step 2.
Work out the parents' combined child support income by adding the child support
incomes from step 1.
$55,000 + $35,000 = $90,000
Step 3.
Work out each parent's income percentage by dividing each parent's child support
income (step 1) by the combined child support income (step 2). Round to two decimal
places.
Emma: $35,000 divided by $90,000 = 38.89%
Adam: $55,000 divided by $90,000 = 61.11%
Step 4.
Work out each parent's percentage of care by dividing the number of nights care that
they are likely to have over the next 12 months (regardless of the child support
period) by 365. Round up to the nearest percentage if the percentage is above 50%,
and down if it is below 50%.
Emma's care percentage:= 300/365 = 82.19% = 83%
Adam's care percentage:= 65/365 = 17.81% = 17%
Step 5.
Work out each parent's cost percentage, using the table in section 55C.
Emma has between 66% and 86% care (primary care) and so has a cost percentage of 76%.
Adam has between 14% and 34% care (regular care) and so has a cost percentage of 24%.
Step 6.
Work out each parent's child support percentage by deducting the share of costs that
they meet through care (cost percentage, step 5) from the share of costs that they
must meet due to their share of the resources (income percentage, step 2).
Emma: Income percentage minus Cost percentage
38.89% - 76% = <0
Emma has 38.89% of the combined child support income, but meets 76% of the costs
(directly through the care she provides). Emma, therefore, needs to receive some
child support from Adam.
Adam: Income percentage minus Cost percentage
61.11% - 24% = 37.11%
Adam has 61.11% of the combined child support income, but meets only 24% of the costs
(directly through the care he provides). Adam, therefore, needs to transfer some money
to Emma.
Step 7.
Work out the costs of the child according to the gazetted Costs of Children Table and
round to the nearest dollar.
Using the figures in the combined child support income (CCSI) $82,135-$109,512, column,
the cost of Jimmy (one child 12 or under) is $12,046 plus 10c for each dollar of CCSI
over $82,135
= $12,046 + (90,000 – 82,135)x10c
= $12,046 + 7,866x10c
= $12,046 + $786.60
= $12,832.60
Cost for Jimmy = $12,833
Step 8.
If a parent has a positive child support percentage under step 6, the annual
rate of child support payable by the parent is:
Parent's child support percentage × Costs of the child
Adam: 37.11% x $12,833 = $4,762.33 = $4,762
Adam transfers $4,762 to Emma. Emma is meeting all of her share of Jimmy's cost
directly, so does not need to transfer child support.