4. Court orders or child support agreements that vary the child support assessment

Court orders for departure from the formula (departure orders) and child support agreements (limited and binding) can all contain the same types of clauses to vary or prescribe the child support assessment.

Generally, variations that can be made to formula assessments fall into two categories – variations due to circumstances that affect the resources of the parents and variations due to circumstances that affect the cost of the child. The most appropriate way to vary the assessment will depend on these circumstances.

4.1 Resources of the parents

The new formula from 1 July 2008 approaches the resources of parents in a similar way to the previous formula. The major difference is that the income of each parent is treated in exactly the same way – both parents have the same self-support amount, and their income above this level is used to calculate the cost of the child and the appropriate share of this cost to be met by each parent. This means that it will be necessary more often after 1 July 2008 to make departure decisions (and agreements) that adjust the resources of the parent who receives child support. As the income of each parent is treated in the same way, the same types of adjustment will be appropriate for all parents, regardless of whether they pay or receive child support.

Where a parent has resources greater than reflected in their Adjusted Taxable Income (ATI), or where they effectively have lower resources than reflected due to high costs in maintaining themselves or another person, it would generally be appropriate to reflect this by adjusting one of the elements of the formula that relate to their resources and necessary expenditure. For example, the ATI could be increased to reflect non-assessed income available from a superannuation fund. Conversely, the self-support amount or relevant dependent child amount could be increased to recognise the high medical costs of the parent themselves or their relevant dependant.

In some circumstances, multi-case allowances may be adjusted, to recognise the costs borne by the parent for children in other child support cases. More information on multiple case liabilities is available in chapter 2.4.9 of The Guide: CSA Law and Policy available at www.csa.gov.au. Note that all the children of two parents form a single child support case from 1 July 2008 (see Chapter 1.4).

Adjusting one of these measures, (rather than setting the Child Support Income (CSI) alone), will usually be preferable if the decision or agreement is to stand for some time, since setting the CSI means that such things as normal variations in the self-support amount, multi-case costs and post separation costs cannot occur.

Examples of circumstances resulting in such adjustments and suggested draft terms follow at 4.4.

Print this page Top of page