2.6.9: Reason 3 - high costs of caring for, educating or training the child in the manner expected by the parents

Context

A payer or payee can apply for a change of assessment in special circumstances if the costs of maintaining a child are significantly affected by high costs of caring for, educating or training the child in the way both parents intended.

Legislative references

Sections 98B(1), 98C, 98S, 117(2)(b)(ii) and 117(4) to 117(9) Child Support (Assessment) Act 1989.

Sections 71C and 71D Child Support (Registration and Collection) Act 1988.

Explanation

An assessment can be changed if in the special circumstances of the case, the costs of maintaining a child are significantly affected because the child is being cared for, educated or trained in the manner that was expected by the parents (section 117(2)(b)(ii)).

The phrase 'special circumstances of the case' is not defined in the Assessment Act. The Family Court has held that 'it is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary' (Gyselman and Gyselman (1992) FLC 92-279).

A parent can make an application to change their child support assessment if they consider that the cost of meeting the parents' expectations significantly affects the costs of maintaining the child.

The parent applying for a change to their assessment has to show that there are additional costs involved in maintaining the child because of an agreement between the parents about how the child will be maintained. The ordinary costs incurred in raising a child will not be considered under this reason as those costs do not set a particular case apart from other cases in a way that establishes special circumstances.

Example

When is the cost of maintaining the child significantly affected?

Is the child being cared for, educated or trained in a manner expected by his or her parents?

What is 'just and equitable' when considering the expectations of the parents?

Changes that reflect educating the child in the manner expected

The interaction of reason 3 and the provisions for credit of non-agency payments

When is the cost of maintaining the child significantly affected?

Once the costs associated with educating, maintaining or training a child in the manner expected by the parents have been calculated CSA will consider the extent to which those costs significantly affect the capacity of the parent to support the child.

Example

Is the child being cared for, educated or trained in a manner expected by his or her parents?

The most common application for this reason involves the payment of private school fees and whether the child is being educated in a manner expected by the parents. However, this reason can apply to education and/or training outside the school environment.

In cases involving school fees CSA will generally determine whether both parents agreed to the child being educated in the way outlined in the application. CSA will also consider the financial situation of both parents. The fact that a payer can afford to pay the fees, or is a wealthy person, is not in itself a reason for imposing a liability to contribute to school fees (Mee v Ferguson (1986) FLC 91-716).

Where a payer agreed to the child attending a private school they will be liable to contribute to the fees to the extent that they have the financial capacity. Where a payer has not agreed to the child attending a private school they will not be liable to contribute to the fees unless there are reasons relating to the child's welfare that mean that the child should attend a private school (and the costs would then relate to the child's special needs - see reason 2).

In deciding whether the reason is established CSA will consider the type of education intended by both parents for the child, rather than any particular school intended by the parents (Wild v Ballard (1997) FLC 92-771).

CSA will also consider the circumstances at the time of separation. If the child was attending a particular school, or was participating in a particular extra curricular activity, then this element will usually be established. If not, evidence of the parents' expectation would need to be provided, e.g. the payment of fees. The parents' expectation can be created at any time, not just during the period that the parents lived together. 

What is 'just and equitable' when considering the expectations of the parents?

If the reason is established CSA must consider whether it would be just and equitable to the child, the payer, and the payee and otherwise proper to make a particular determination (section 98C(1)(b)(ii)).

CSA will consider the financial circumstances of the other parent and decide whether the child's needs, including the additional costs, can be met by the assessed rate of child support (as can be the case where the payer is paying a high rate of child support). The other parent may also be able to contribute towards the child's additional expenses taking into account that parent's circumstances. 

The importance of maintaining the expectations of both parents and the primary purpose of the Assessment Act in ensuring that children receive a proper level of financial support from both parents has to be balanced against the capacity of either or both parents to meet those expectations. Changes to the financial circumstances of either parent may mean that earlier expectations for a child's care are no longer possible.

Changes that reflect educating the child in the manner expected

CSA will consider the financial circumstances (including assets) of the payer in deciding if they have the capacity to meet the additional expenses as well as the rate of child support already paid. CSA must consider the effect of any decision on the amount of Family Tax Benefit received by the payee, bearing in mind that it is the primary duty of the parents to support the child (section 117(5)).

The costs of educating or training a child in accordance with the expectations of the parents are usually readily identifiable and verifiable. If the payee is meeting the additional costs, a decision will usually increase the child support liability by an appropriate proportion of those additional costs. The length of time and stability of the education costs can determine the period of time that any change to the assessment will apply.

Where the payer is meeting the costs, it may be appropriate to reduce the assessment. However, another alternative is to increase the assessment and for the payer to claim credit (as non-Agency payments) for any payments that they make directly to third parties in relation to training and education costs for the child. Where this occurs, CSA will be satisfied that the parties mutually intended that these payments were for child support for the child.

The interaction of reason 3 and the provisions for credit of prescribed non-agency payments

A payer who makes certain types of payments to third parties, including child care costs or fees charged by a school or preschool for a child, is generally able to have those payments credited towards their liability to pay child support for that child, even if the payee did not intend that the amount be for child support. However, this option is not generally available if CSA has already taken into account those costs met by the payer in making a decision to reduce, or refuse to change the assessment. (See chapter 5.3 - Non-agency payments and offsetting liabilities for further information.)

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Version 1.2

Issued 30 August 2004

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