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When parties separate, under the Child Support (Assessment) Act 1989, a parent is liable to provide financial support to a party who has primary care of an eligible child if they do not have primary care.
There are many ways in which this financial support can be provided from one parent to another however the most common practice is by parties seeking assistance from the Department of Human Services/Child Support Agency. A parent who seeks child support can apply to the agency to obtain a child support assessment which determines the periodic monthly payment that a parent is liable to pay. In determining this assessment the Child Support Agency collects both parents financial information inclusive of their taxable incomes and then considers the percentage of care that each parent have with the child. The Child Support Agency then applies a formula to calculate the amount of the child support. A parent thereafter elects as to whether they wish for the child support to be collected by the child support agency or by a private collection.
It is possible for parents to agree to child support payments outside of the assessment process. For example, this might be a lump sum of child support, or payment of school fees or other costs, or some other variation of the assessment. For these parents, they can enter into a child support agreement, which can be either limited or binding.
When an assessment is in place and a party fails to pay then a child support debt is accrued. These debts need to be raised with the child support agency immediately especially in circumstances where a parent is making payment to the other parent directly. The Child Support Agency will then take steps to retrieve the debt. If a parent refuses to make payment and the debt accrues then the Child Support Agency has the following powers:
Additionally, if a parent is late in making their payments then the Child Support Agency may apply a penalty on the accrued debt. This penalty is not paid to the recipient of child support but rather to the Australian Government.
The non-payment of child support is considered a serious issue in Australia. If a parent ceases or refuses to make child support payments, or tries to diminish their income so that their liability is decreased, then if requested, the agency can investigate the circumstances of that parent. Specifically, the child support agency target individuals whose lifestyles do not match their income. The Agency may also scrutinise those who work in occupations that are commonly paid cash in hand, self-employed individuals, and individuals attached to companies, trusts and partnerships which have the capacity to hide or reduce income.
The payment of child support can be a sensitive subject and parents often link it to the arrangements in place for the children spending time with each parent. However, there is separate legislation governing parenting arrangements and payment of child support. The liability to pay child support exists no matter what difficulties there may be in the parenting arrangements. But often it is advisable to consider the situation holistically to try to address and resolve all of the issues surrounding the parenting arrangements and payment of child support.
It is always best to seek advice as soon as possible, preferably before the situation gets out of hand or particularly difficult. All of our lawyers at Sarah Bevan Family Lawyers have extensive skill and experience in helping parents work through these issues.