The new Child Support Scheme and changes to Family Assistance
Costs of children
The new formula recognises that the cost of raising children is different in households with different income levels, numbers of children, and children of different ages.
In this section:
How are costs of children worked out?
In 2005, an independent taskforce reviewed research into the costs of children in Australia, and considered factors such as households with different income levels, different numbers of children and children of different ages. The taskforce recommended a new way of calculating child support payments based on these findings.
The costs of raising children will be calculated according to the combined income of both parents after the self-support amount is deducted. These costs will be divided between the parents according to their share of the combined income. Parents can meet some of their share of the costs directly through care, and the rest of their share is payable as child support.
Go to the Costs of children tables for more information.
Joseph and Ellie have three children, Paul, 11, Jack, 8, and Kylie, 6.
Because the children are all aged under 12, we use Table 3A: Costs of children to work out how much it costs Ellie and Joseph to raise them.
Joseph and Ellie's combined child support income is $43,496. At the top of Table 3A we look up the relevant column—in their case it is $27,379–$54,756.
Joseph and Ellie have three children, so the independent research says the cost to raise them is $7,392 plus 26 cents for every $1 of income over $27,378.
The calculation is:
- $43,496 minus $27,378 = $16,118
- Multiply $16,118 by 26 cents = $4,190.68
- Add $4,190.68 to $7,392, and we arrive at the cost for the three children—$11,583.
- Divide $11,583 by three (the number of the children) and we get the cost for each child—$3,861.
What about second families?
If you have children (either natural or adopted) from a second or subsequent family that live with you, an amount for their support will be deducted from your income when calculating your child support.
This amount—called the relevant dependent child amount—is based on the cost of the children in your second or subsequent family, using the same cost of children table used for child support. So, all children will be treated similarly. The amount will be worked out using only the child support parent's income.
Because parent's incomes will be treated equally under the new formula, either parent can have children from a new family recognised in this way.
Relevant dependent children are a parent's biological or adopted children with a new partner.
See how relevant dependent children are taken into account using the new formula.
What about step-children?
Where a parent has a second family that includes step-children, the responsibility of financially supporting the step-child may rest with that parent if neither of the child's biological parents can pay for the costs of their child due to illness, death, or incapacity to earn income.
Under the new Scheme, in special circumstances, parents with child support children who also care for a step-child can apply for a change of assessment to have their child support payments reviewed. It doesn't matter whether the step-parent pays or receives child support, as long as they need to support the step-child with their income.
To have this care recognised, the parent must be able to demonstrate:
- they have lived with the parent of the step-child for a continuous period of two years or more
- the parents of the step-child cannot support the child because of:
- death
- ill-health that prevents them from working or
- their caring responsibilities—for example, caring for a young child or an older child with disabilities
- the step-child is aged under 18 and not married or in a de facto relationship.