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Formula to calculate child support
- How does CSA work out how much child support is paid?
- What is the basic child support formula?
- What are the detailed values in the child support formula?
- How does the basic formula work?
- When is the basic formula modified?
- What is a minimum assessment?
- How is the formula changing?
How does CSA work out how much child support is paid?
All child support assessments conducted by CSA apply the same basic formula, as defined in the Child Support (Assessment) Act 1989.
This formula takes into account each parent's income, the number of children and their living arrangements. In some circumstances, the formula may be modified in order to calculate assessments in a more accurate and balanced way.
The child support calculator can be used to give you an estimate of child support payments for your circumstances.
[Top]What is the basic Child Support formula?
The basic formula is used to calculate the annual rate of child support for a child support period.
The formula can be explained as follows:
| {(1 + 2 = 3) - 4 = 5} x 6 = Annual child support payable |
Where
1 = Taxable income
2 = Supplementary amounts
3 = Child support income
4 = Exempted income
5 = Adjusted income
6 = Child support percentage
| {(Taxable income + Supplementary amounts = Child support income) – Exempted income = Adjusted income} x Child support percentage | = | Annual child support payable |
What are the detailed values in the Child Support formula?
The formula can be explained as follows:
| {(1 + 2 = 3) - 4 = 5} x 6 = Annual child support payable |
CSA uses your last relevant year of taxable income to work out a child support assessment. The last relevant year of income for a child support period is the last financial year that ended before the start of the child support period.
For example, for a child support assessment starting on 30 October 2006, CSA will use your 2005–06 taxable income.
If your current taxable income is not available, CSA may use a default income. This may be a previous taxable income, increased by the relevant inflation factor (5.0% - 2008 figure).
This includes any foreign income exempt from tax, plus any rental property losses, plus any reportable fringe benefits for the relevant tax year.
NOTE: Reportable fringe benefits are only amounts over $1,000.
This is the total of your taxable and supplementary incomes.
More detailed information about incomes used in a child support assessment is available in The Guide.
This is an amount deducted from your child support income. This amount varies depending on the number and age of children in your care.
More information is available in The Guide under 2.4.2: Basic values used in a child support assessment.
This is your child support income less any exempted income. The adjusted income amount cannot be less than nil.
The adjusted income is multiplied by a percentage which is determined by the number of children you need to pay child support for.
| Number of children | Child support percentage |
|---|---|
| 1 | 18% |
| 2 | 27% |
| 3 | 32% |
| 4 | 34% |
| 5 or more | 36% |
Further detailed information about the basic formula is available in The Guide.
How does the basic formula work?
View an example of the formula in action, or use the child support calculator to estimate the child support payments for your circumstances.
When is the basic formula modified?
There are a number of modifications to the basic formula that take into account special circumstances.
If the paying parent has a low income, they may be eligible for a minimum assessment. There are a number of factors that may influence the paying parent’s qualification for a minimum assessment.
Under changes being made to the Child Support Scheme by the Government, a new formula for calculating child support will be introduced on 1 July 2008.
This formula will:
- Base the costs of children on Australian research that has identified the best estimate of the amount parents spend on their children in an equivalent intact family (the 'costs of children')
- Treat parents' incomes more equally by giving both parents the same self-support amount, working out the costs of children from combined incomes, and dividing the cost between the parents in proportions equal to their share of the combined income
- Take account of the fact that older children cost more than younger children
- Recognise the costs of care for both parents, and allow resident parents to keep all of their Family Tax Benefit except where there is shared care (35 per cent or more).
- Treat children from first and subsequent families more equally.
More information about the new formula will be available closer to its introduction in July 2008.
For now, the current child support formula remains unchanged. Parents must keep paying current child support payments calculated under the existing formula until the new formula comes into effect. Please notify the Family Assistance Office of any changes in income and shared care arrangements.
Information about the changes to the Scheme is available from the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA).
