The new Child Support Scheme and changes to Family Assistance
How we work out your child support
The new child support formula
While every family situation is different, we will work out most child support assessments using a new child support formula.
In this section:
- How we work out your child support
- The basic formula
- Parents with other relevant dependent children
- Parents with two or more child support assessments
- You receive child support but are not the parent
A significant change to the Child Support Scheme is the introduction of a new method for calculating child support payments.
The new formula is based on the cost of raising children; these costs were determined by independent, Australian research.
The new formula recognises that by caring for your child you are directly meeting some or all of the costs through care. It also acknowledges shared care of the children much better, and treats the children from first and subsequent families in a similar way.
The new formula takes both parent's incomes into account and considers them equally. Both parents get exactly the same self support amount deducted from their income before child support is worked out.
Every family is unique, and the new child support formula is very flexible and takes into account many different family circumstances. Most child support assessments will be calculated using the basic formula.
The information in this section is provided to help you understand how the new formula works.
How we work out your child support
The Child Support Agency will follow these steps to calculate your child support.
| 1 Work out your child support income |  |
If you have dependent children or more than two child support assessments, this will be taken into account at this step. |
| 2 Work out the combined child support income | ||
| 3 Work out your income percentage | ||
| 4 Work out your care percentage | ||
| 5 Work out your cost percentage | ||
| 6 Work out your child support percentage | ||
| 7 Work out the cost of your child | |
You will get either a positive or
negative child support percentage. If the percentage is positive, you need to pay child support |
| 8 Work out the child support amount | ||
You don't have to work out your new child support payments yourself. The Child Support Agency will work it out for you and send you a new child support assessment before May 2008.
You can use the worksheet or the online estimator to estimate what your child support payments might be from 1 July 2008.
The basic child support formula
There are eight steps we follow to calculate child support for each child.
-
We calculate each parent's child support income. See more
information and an example.
-
We add both parent's child support incomes together to get a
combined child support income. See more
information and an example.
-
We divide each parent's individual child support income by the combined child support income to get an
income percentage. See more information
and an example.
-
We work out each parent's care percentage of the child. See more
information and an example.
-
We work out the cost percentage of the child. See more
information and an example.
-
We subtract the cost percentage from the income percentage for each parent. The result is called the
child support percentage.
-
If it's a negative percentage, that parent may receive child support because their share of the costs of children is being more than met by the amount of care they are providing.
- If it's a positive percentage, that parent needs to pay child support because they aren't meeting their entire share of the costs of the child directly through care. We go on to steps seven and eight using only the positive child support percentage.
Note
If you have different care arrangements for various children, you might have different child support percentages for each child. -
If it's a negative percentage, that parent may receive child support because their share of the costs of children is being more than met by the amount of care they are providing.
-
We work out the costs for each child. See more
information and an example and the Costs of
children tables.
- We get the final child support payable by multiplying the positive child support percentage by the costs of the child. This final figure is the child support amount the paying parent needs to transfer to the other parent.
Parents with other dependent children
The cost of a biological or adopted child living with a parent will be calculated in the same way as the cost of the child support children. To recognise the care a parent provides for these children, called relevant dependent children, we deduct an amount from the parent's adjusted taxable income before going on to apply the basic formula.
To calculate amounts for relevant dependent children, we follow these steps:
- We calculate the parent's child support income.
- We work out the parent's care percentage and cost percentage for the relevant dependent child. (This is usually 100 per cent.)
- We work out the costs of the relevant dependent child. However, only the income of one parent is used—not the combined income of both parents.
- We multiply the cost of the child by the cost percentage. This is the relevant dependent child amount.
- We deduct this amount from the parent's adjusted taxable income, to get their child support income.
- We then go to step two of the basic formula and follow all the steps outlined to work out the child support payable for the child support children.
For adopted children, all the legal consequences of parenthood are transferred from the birth parents to the adoptive parents, including financial responsibility. Therefore, only the adoptive parents can be liable for child support for an adopted child. Adopted children can also be relevant dependent children for parents who pay child support.
There are special rules for when a step-child can be taken into account. See more information.
Johanna pays child support for her daughter Helga, 16 and has two relevant dependent children, Mitchell, aged 14, and Frida, aged 11, in a new family.
Mitchell and Frida live with Johanna and her partner, Greg, 100 per cent of the time. So when Johanna is assessed for child support for Helga, a relevant dependent child amount needs to be deducted from her income.
To get this amount, we first deduct the self-support amount of $18,252* from her adjusted taxable income of $36,000—giving $17,748.
We work out her percentage of care for her relevant dependent children, Mitchell and Frida. Because these children live with Johanna full-time, her percentage of care is 100 per cent.
We also work out Johanna's cost percentage for her relevant dependent children. Because Johanna has 100 per cent care of Mitchell and Frida, her cost percentage is 100 per cent.
We work out the costs of the relevant dependent children using Johanna's child support income only. The total cost of Mitchell and Frida is $4,703, so the cost of each child is $2,352.
We multiply each child's cost by the parent's cost percentage for the child. Johanna has a cost percentage of 100 per cent for each child, and the cost for each child is $2,352—this gives an amount for each child of $2,352.
We then take Johanna's adjusted taxable income of $36,000, deduct the self-support amount of $18,252 then deduct $4,703 for the relevant dependent child allowance.
* The self-support amount for child support periods starting in 2008 is $18,252. This amount is indexed each year. You will be advised in writing when this amount changes.
Parents with two or more child support assessments
The calculations for parents with two or more child support assessments are a little more involved yet are still based on the basic formula.
If you pay or receive child support for two or more families, we deduct an amount—called the multi-case allowance—after we deduct the self-support amount and any relevant dependent child amount from your adjusted taxable income, to arrive at your child support income. We then go on to apply the basic formula.
The multi-case allowance recognises your responsibility for supporting your children in other child support cases.
The multi-case allowance for each child support child is the total of the multi-case costs for children in your other child support cases. We work out the multi-case cost for each child according to the age of the child and how much it would cost if all the children were living full-time with you.
We calculate the multi-case cost of each child as if all the children were the same age as that child. To work out this cost, we:
- Work out the total number of your child support children
- Look up your income and the age of the child on the relevant Cost of children table to find what all the children would cost if they were all the same age
- Divide this amount by the total number of child support children.
We follow this process for each child. Older children have a higher multicase cost than younger children of the same parent.
This process also produces the multi-case cap. The multi-case cap ensures you don't pay more in child support than it would cost you if you had all your child support children living with you. To work out the multi-case cap, we take the multi-case cost of the child adjusted for any care that you have of the child.
If you pay child support for children who live overseas, this may be taken into account in your Australian child support assessment. For more information go to the International parent section of the CSA website.
Ari has three children who live with their mothers: Tara, 14, and Maya, 9 live with their mother, Jenny, and Aron, 5, lives with his mother, Fay. Ari has no level of care of the three children, and he has no relevant dependent children.
Ari's adjusted taxable income is $40,000. We deduct $18,252* (the self-support amount), which gives a child support income of $21,748. This is the income we use to calculate the multi-case cost of his three children.
Even though the child support worked out in each of Ari's cases will acknowledge his obligation to support all of his children, each case is worked out separately.
Multi-case costs
For Tara:
- Because Ari has three children, the multi-case cost for Tara is based on the cost of three children aged 14, using Ari's child support income of $21,748. We divide the cost by three to get Tara's multi-case cost.
- Table 3B: Costs of children 2008 shows that the cost of three older children at this child support income is $6,959 ($21,748 multiplied by 32 cents).
- Divide $6,959 by three gives a multi-case cost for Tara of $2,320.
For Maya:
- Because Ari has three children, the multi-case cost of Maya is based on the cost of three children aged 9, using Ari's child support income of $21,748. We divide the cost by three to get Maya's multi-case cost.
- Table 3A: Costs of children 2008 shows that the cost of three younger children at this child support income is $5,872 ($21,748 multiplied by 27 cents).
- $5,872 divided by three gives a multi-case cost for Maya of $1,957.
For Aron:
- The multi-case cost for Aron is the same as the multi-case cost for Maya, as they are both aged under 13.
- Aron's multi-case cost is also $1,957.
Multi-case allowance
The multi-case allowance is the total of multi-case costs for children in other cases.
For Tara and Maya:
- Aron's multi-case cost is $1,957.
- Ari's multi-case allowance in the case for Tara and Maya is $1,957.
- We take Ari's adjusted taxable income of $40,000, deduct the self-support amount of $18,252 then we deduct $1,957 in multi-case allowance.
- Ari's child support income for this case is $19,791.
For Aron:
- Tara's multi-case cost is $2,320 and Maya's is $1,957, so Ari's multi-case allowance in the case for Aron is $4,277.
- We take Ari's adjusted taxable income of $40,000, deduct the self-support amount of $18,252* then we deduct $4,277 in multi-case allowance.
- Ari's child support income for this case is $17,471.
Multi-case cap
The multi-case cap is calculated for each child separately.
For Tara her multi-case cost is $2,320.
Because Ari has no care of Tara, the multi-case cap for Tara is $2,320. The same care and cost percentages apply as for other child support calculations.
If Ari had regular care (14–34 per cent) of Tara, he would be credited with meeting 24 per cent of her costs directly. So, the multi-case cap for Tara would be 76 per cent of $2,320—$1,763. If Ari had 50 per cent care of Tara, he would be credited with meeting 50 per cent of her costs directly. So, the multi-case cap would then be 50 per cent of $2,320—$1,160.
The same process is followed to calculate the multi-case cap for Maya and Aron.
Next steps
- Ari then goes to step two of the basic formula and follows the steps outlined to work out the child support payable for each case.
- Ari uses his child support income as worked out above, and calculates each child support case separately.
- The child support amount calculated is then compared to the multi-case cap amount—Ari will pay the lesser of these two amounts.
You receive child support but are not the parent
If you provide care for a child and you are not the parent, you can receive child support from one or both parents of the children if you apply to the Child Support Agency (CSA) for a child support assessment. Non-parent carers usually apply for child support from both parents.
Child support is still worked out using both parents' incomes, cost percentages and child support percentages—similar to how child support is worked out for parents. However, only the non-parent carer's cost percentage, based on their percentage of care, is relevant to working out how much child support is payable—their income is not taken into account.
Ben and Jacki have two children, Tom, aged 4, and Shona, aged 2. Ben and Jacki separate and Tom and Shona live with Ben's mother, Lisa, most of the time. Ben has regular care of Tom (equal to 24 per cent). Jacki has less than 14 per cent care of both children.
Ben has an adjusted taxable income of $45,000 and Jacki has an adjusted taxable income of $25,000. Neither Ben nor Jacki has a relevant dependent child or any other child support cases.
We work out Ben and Jacki's child support income by deducting the self-support amount of $18,252* from each of their incomes.
- Ben's child support income is $26,748
- Jacki's child support income is $6,748
We work out Ben and Jacki's combined child support income by adding together their child support incomes. Ben and Jacki's combined child support income is $26,748 plus $6,748, which equals $33,496.
We work out each parent's income percentage by dividing their child support income by their combined child support income.
- For Ben this is $26,748 divided by $33,496 = 80 per cent
- For Jacki this is $6,748 divided by $33,496 = 20 per cent
We work out Ben, Jacki and Lisa's percentage of care of each child.
- Ben has 24 per cent care of Tom and no care of Shona
- Lisa has 76 per cent care of Tom and 100 per cent care of Shona
- Jacki has no care of Tom and Shona
We work out Ben and Jacki's child support percentage for each child by subtracting their cost percentage for that child from their income percentage.
Ben has an income percentage of 80 per cent:
- We deduct 24 per cent (the care percentage) which gives a child support percentage of 56 per cent for Tom
- We deduct 0 per cent (the care percentage) which gives a child support percentage of 80 per cent for Shona
Jacki has an income percentage of 20 per cent:
- We deduct 0 per cent (the care percentage) which gives a child support percentage of 20 per cent for Tom
- We deduct 0 per cent (the care percentage) which gives a child support percentage of 20 per cent for Shona
Note
Lisa does not have a child support percentage because, although she is bearing some of the costs of the children, she has no legal obligation to financially support them. Therefore, her income is not used in the child support calculation.
We work out the costs of each child. Ben and Jacki's combined child support income is $33,496 and, according to the relevant Costs of children table, this makes the total cost of the children $7,978. We divide this amount by two (the total number of children), giving a cost for each child of $3,989.
Ben has a child support percentage of 56 per cent for Tom, so he needs to transfer 56 per cent of Tom's costs through child support. Tom's cost is $3,989 and 56 per cent of this is $2,234. Ben needs to pay $2,234 in child support for Tom.
Ben has a child support percentage of 80 per cent for Shona, so he needs to transfer 80 per cent of Shona's costs through child support. Shona's cost is $3,989 and 80 per cent of this is $3,191. Ben needs to pay $3,191 in child support for Shona.
Jacki has a child support percentage of 20 per cent for Tom, so needs to transfer 20 per cent of Tom's costs through child support.
Tom's cost is $3,989 and 20 per cent of this is $798. Jacki needs to pay $798 in child support for Tom.
Jacki has a child support percentage of 20 per cent for Shona, so needs to transfer 20 per of Shona's costs through child support. Shona's cost is $3,989 and 20 per cent of this is $798. Jacki needs to pay $798 in child support for Shona.
Because both Ben and Jacki's child support percentages are positive, Lisa is entitled to receive the total of the child support from both parents.
- Ben pays $2,234 for Tom and $3,191 for Shona—a total of $5,425—to Lisa.
- Jacki pays $798 for Tom and $798 for Shona—a total of $1,596—to Lisa.
Notes
- If one of the parents had a negative child support percentage (for example, because they had more care) and shared care, they would be entitled to receive some child support from the other parent. In this example, Lisa would receive less child support because one of the parents would be meeting more of the child's cost directly.
- Because Lisa is the only non-parent carer, she receives all of the child support: a total of $7,021. If there was more than one non-parent carer, the amount of child support would be divided between them according to their cost percentages.
One parent is not an Australian resident, or there are special
circumstances
If a non-parent carer asks for a child support assessment and one
parent is not a resident of Australia, or special circumstances apply, we still
use the basic formula with one variation. After the available parent's child
support income is calculated, we double that income. We then apply the basic
formula using that income.
Once we work out a final child support figure, we halve it to arrive at the amount of child support payable, and compare it with the parent's multicase cap if they have another child.
One parent is deceased
If a non-parent carer applies for child support from one parent and
the other parent is deceased, we use the parent's income on its own before
applying the basic formula.
You don't have to work out your new child support payments yourself. The Child Support Agency will work it out for you and send you a new child support assessment before May 2008.