The new Child Support Scheme

The new Child Support Scheme and changes to Family Assistance

Care of the children

The change to how child support is calculated means shared parenting is recognised to a much greater degree. It also means that minor changes to care, such as a missed day due to illness, will not change the care level or the child support assessment.

In this section:

• How do care arrangements affect child support?
• Meeting costs directly through care
• Care and family assistance
• How are care arrangements recognised?
• Parenting plans
• Oral agreements
• Court orders
• When there are changes to care
• If care arrangements don't work out

How do care arrangements affect child support?

Child support payments calculated under the new formula will reflect each parent's level of care and how much it costs parents to care for their children.

Levels of care
Where a paying parent has regular care of a child, child support assessments are reduced to acknowledge that the parent directly contributes to the costs of raising the child through care.

Regular care is care of your child between 14 and 34 per cent of the time. This equals between 52 and 127 nights per year, which is two to four nights of care per fortnight.

Where parents share care of a child, child support is further adjusted. Both parents may receive family assistance payments to help them with the costs of the children.

Shared care is care of your child between 35 and 65 per cent of the time. This equals between 128 and 237 nights per year, which is five to nine nights of care per fortnight.

The new formula recognises other levels of care too. Go to child support tables for more information.

For more information about levels of care, go to the Child support care and cost table.

Meeting costs directly through care

Parents with regular or shared care will be acknowledged as directly meeting some of the costs of the children through care. Parents with regular care will be acknowledged as directly meeting 24 per cent of the costs of the children, with the remainder of their share of the costs being payable as child support.

Where you have care for at least 35 per cent of the time (at least 128 nights a year), a sliding scale will increase the direct cost percentage as care increases, from 25 per cent up to 50 per cent. So, a parent will be recognised as meeting 50 per cent of the costs of children if their care percentage is between 48 to 52 per cent (equal to 176–189 nights per year).

The direct cost percentage reflects your expenditure on costs like accommodation, food and entertainment while the kids are in your care.

If you are on a low income
If you pay the minimum amount of child support because you are on a low income, and you care for your children 14 per cent or more of the time (52 nights or more a year), you may not be required to pay child support. Your level of care will be recognised as your contribution towards the cost of your child.

Important note about access and care
It's up to parents to manage care arrangements that is in the best interests of the children. Under the new Scheme, the child support formula will recognise the care each parent has of their children, and small changes will not affect payments as much as they do under the current formula.

 Important information for people receiving family assistance

Care and family assistance

Child support and family assistance work together to make sure the costs of the children are being met by both parents.

The current Child Support Scheme doesn't recognise the costs a non-resident parent incurs if they have less than 30 per cent care of the children, but sometimes these parents can receive a share of Family Tax Benefit.

Under the new Scheme, the child support formula will take into account the costs of care when a parent has at least 14 per cent care, which will differ depending on how much care you have.

If you have regular care of your children —that is, 14 to 34 per cent of the time (52 to 127 nights)—the costs you incur will be taken into account under the new child support formula. You will no longer be able to receive a share of Family Tax Benefit Part A or B (or other family assistance payments such as Multiple Birth Allowance, Large family Supplement or Maternity Immunisation Allowance).

Parents with regular care may still be eligible to access other benefits like:

• Rent Assistance
• Low Income Card
• Health Care Card
• Dependant child rate of Remote Area Allowance
• Lower threshold of the Medicare Safety Net
• Child Care Benefit (You may be able to get Child Care Benefit if you pay child care fees to an approved or registered child care service provider, even if you have care of your children less than 35 per cent of the time.)

You may also be able to receive a higher ‘with child' rate of income support. For more information go to the Centrelink website www.centrelink.gov.au or call 136 150.

If you receive a family assistance payment and have less than 35 per cent care, you will not need to reclaim payments you currently receive; Centrelink will work these out for you. If you don't currently receive a family assistance payment and want to see if you are eligible, you will need to lodge an application at your nearest Family Assistance Office or Medicare Australia office on or after 1 July 2008.

If you have shared care of your children —that is, 35 to 65 per cent of the time (128 to 237 nights)—you may be able to share the Family Tax Benefit with the other parent.

If you have primary care of your children —that is, more than 65 per cent of the time (more than 238 nights)—you may be able to receive 100 per cent of Family Tax Benefit. This recognises that your household expenses don't decrease much when the other parent cares for the children for a few nights a fortnight.

For general advice about how the rates of Family Tax Benefit will be worked out from 1 July 2008, go to Family Tax Benefit care table.

 Important information for people receiving family assistance

How are care arrangements recognised?

To make sure the Child Support Agency (CSA) and Centrelink have the same information about care from both parents and can therefore calculate your payments correctly, we recommend you have one of the following in place:

• a written parenting plan
• an agreement (verbal or written) with the other parent about the level of care
• a court order about care, which you have supplied to the CSA.

Parents will have up to 13 weeks to work out parenting arrangements after they separate before family assistance is affected. If parents cannot agree on care levels, and have not made a parenting plan or obtained a court order, then care levels will be determined by CSA and Centrelink after talking to both parents (where possible).

Parenting plans

Parenting plans are written plans that can include an agreement about the amount of time the children will be in each parent's care. A parenting plan doesn't need to spell out the exact arrangements for every night in the year; parents can agree on what the care percentage will be.

Under the new Scheme, a parenting plan is the best way for parents who have significant and regular daytime care to have it recognised in their assessment. While the formula is based on care measured by number of nights, it has the flexibility to cover the very small number of customers who have significant regular daytime caring responsibilities and no night time responsibilities, in some circumstances. If you have an arrangement like this, we recommend you and the other parent make a parenting plan and provide a copy to the Child Support Agency (CSA).

Because all parents with 14 to 34 per cent care (52 to 127 nights a year) are taken to meet the same 24 per cent of the child's costs through care, it doesn't matter what the exact percentage in this range is. This means parents can be flexible about changes to care within this range, without worrying about the effect on child support.

If you have a parenting plan, it's still current and CSA has a copy of it, we can base your care levels in your child support assessment on the plan. If care changes, we recommend you try to make a new parenting plan.

Oral agreements

Parents can make oral agreements about their care arrangements. An oral agreement can be used to determine parents' levels of care even where there is a court order or parenting plan, so long as both parents agree with the arrangements.

If one parent doesn't agree with the oral agreement and there is a parenting plan or court order registered with CSA, the care level used in the assessment will be what is stated in the order or plan.

This makes oral agreements a good option for parents who want to try out new care arrangements before they make a new parenting plan. Like parenting plans, oral agreements don't need to spell out every night of the year—for example, parents can agree that they each have 50 per cent care.

Court orders

If there's a court order that outlines care levels, your child support assessment will be based on the order unless both parents agree to change it, for example by parenting plan or oral agreement. The Child Support Agency (CSA) has no legal ability to enforce levels of care specified in court orders. If orders are contravened, either parent may seek legal advice, attend family dispute resolution or apply to the Family Court.

When there are changes to care

Where possible, try to make a new parenting plan or agreement.

For child support purposes, very small changes in care don't significantly change the costs that parents meet, so it might not change child support payments. This gives parents more flexibility about small changes in care without worrying about the effect on child support.

If care arrangements don't work out

If one parent doesn't meet their care obligations and doesn't seek a new agreement, parenting plan, or order despite the other parent's efforts, CSA can change the assessment.

The Family Relationship Advice Line provides free information, advice and referral to services to assist people affected by family relationship or separation issues, including developing and reaching agreement on parenting arrangements. For more information call 1800 050 321 or go to www.familyrelationships.gov.au

CSA's Community Services Directory lists over 2,300 community support services for separated families.