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Child-Support

Child Support Options

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Child Support

Most parents find child support a source confusion.   Commonly they ask us if they have to go through the department to human services, child support (CSA) or not? The first point is that parents are expected to support their children to the best of their ability. Here is an overview of some child support options for you to consider:

(1) Private arrangement

Here parents agree how the child’s care costs will be paid or shared in the future.

Some couples in their property settlement might agree to put money aside for certain expenses such as private school fees or they might set up a formal trust for example for the children’s education. Other couples might agree as to which parent will be responsible for paying certain expenses. An example might health insurance premiums and medical costs, extra curricular activities or the costs such as school uniforms, excursions etc.

(2) Child Support as Assessed

If parents cannot agree then a parent might apply for child support through the Child Support Agency who may issue a child support assessment. A parent who has applied for Centrelink or means tested benefits must have a child support assessment issued.

Child support as assessed takes into account each parent’s income and the number of nights that the child is in each parent’s care which is then included in the assessment formula used by CSA. Child support is generally insufficient for extracurricular activities,  dental and medical treatments eg orthodontic treatment or private tuition/schools fees and the like. If the other parent will not pay more than child support as assessed then a change of assessment application can be made through the Child support agency.

To bring that application, the applicant needs to satisfy one or more of the 10 grounds for that change of assessment some of which include costs in spending time with  a child; if the child support assessment is unfair because of the income, earning capacity, property or financial resources of the parent or the type of education or training that the parents agreed their child would receive such as private schooling.

If the application is successful then the child support agency can increase the  assessable child support.   That mean the parent receiving child support will receive more child support on account of the higher care costs. If the decision is disputed then it can be reviewed  by the CSA Registrar. That decision can appealed to the Administrative Appeals Tribunal and/or an application made to the Federal  Circuit Court of Australia for child support orders but within the specified time limit.

Sometimes a child support order might be appropriate especially if a paying parent resides overseas and in a country which does not have reciprocal child support arrangements in place.

Child support agreements

To give greater certainty and where child support as assessed will not be sufficient eg the child attends a private school or has higher health care costs, then a child support agreement might provide more certainty.

There are two types – Binding or Limited.

A binding child support agreement enables any amount to be paid. It can include lump sum child support in the form of property to be credited fully against any child support liability. Each parent must get independent legal advice before the agreement is signed. Each solicitor must sign that certificate of advice and it should be registered with CSA. A binding child support agreement is serious transaction and need careful drafting and consideration as to what events in the future might arise and should terminate it. It can only terminate by a new binding child support agreement which expressly terminates the former or court order. As the threshold findings to support such an order are high, they should not be rushed into.

They cannot be varied – to vary it the parties must enter into a new binding child support agreement to specifically terminate it and set out the newly agreed terms. They do offer clear advantages too – such as greater certainty in terms of obligations to pay and receive certain payments, can provide for any amount of child support and they do not require a child support assessment to be issued.  They work well for many families.

A limited child support agreement offer more flexibility (but less certainty as a result). The parties do  not require legal advice before entering into it. There must be a child support assessment issued  for the registrar to accept it for registration.

It can end if both parties agree to end it in writing, after 3 years or more and a party request CSA end it and if the paying parent is paying 15% of more than the notional assessment and asks CSA to end it.

If you need child support advice, please email us [email protected] or call 03 9993 7184 (Melbourne) or 02 9186 8135 (Sydney).

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One Family Law Myth Exposed

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Do we start at 50/50?

After the breakdown of a de facto relationship or marriage, parties are usually uncomfortable about their financial and property entitlements.

There is a myth that there is a presumption that assets should be divided equally. There is, however, no automatic entitlement in property and financial matters. Each parties’ entitlement depends on their circumstances and the entitlement should be determined and estimated by an experienced family lawyer.

There is no presumption of a percentage entitlement in relation to a property or financial settlement.

The things that are taken into account when determining a property/financial settlement.

In Australia, the Family Court determines how property and financial matters are to, the Family Court determines how property and financial matters are to be settled by reference to the Family Law Act. Family lawyers will tell you what is to be taken into consideration by the Court. Again, there is no formula to be applied as the settlements are based on all of the facts provided and the discretion given to the Court by the Act in deciding each case.

The Court will, however, take into account the following factors:-

  1. Whether it is just and equitable to make an order in the first place.
  2. The value of all assets and liabilities are identified so as to establish the net assets, including assets held individually, in partnership, by companies and by trusts.
  3. The contributions made by each party to the acquisition, maintenance and improvement of the assets, including financial contributions, assets owned at the commencement of the relationship, windfalls such as gifts from parents, inheritances, redundancy packages, etc.
  4. Non-financial contributions made by each party such as where one party looks after domestic matters or children to the detriment of their career.
  5. Indirect financial contributions such as giving up a career to allow the other party to further their own career.
  6. The future needs of the parties such as whether they have responsibility for the care of children, their income earning capacity, their qualifications, age, financial resources, health and superannuation.

Conclusion

Remember that there is no presumption of a 50/50 split as a starting point and that each matter is decided upon the particular circumstances of each case.

The Family Court can make Orders that are just and equitable in relation to division of property.

Separating parties should obtain independent legal advice about their entitlements at the earliest opportunity.

Should you seek assistance with property settlement entitlements following the breakdown of your marriage or relationship, email us [email protected] or call 03 9088 3184 (Melbourne) or 02 9188 2031 (Sydney).

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What is a Prenup?

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Marriages and defacto relationships often fail leaving parties in a quandary as to how to settle their financial affairs. In the event that you are organised and have a Pre-Nuptial/Financial Agreement, then your property and finances will, in all likelihood, be divided in accordance with your wishes in the event that your relationship breaks down.

Pre-Nuptial/Financial Agreements can be made at the start of a relationship, during the course of a relationship or after the relationship has broken down.

Pre-Nuptial/Financial Agreements are regulated by the law and include a provision that each party must be represented by an independent legal advisor who must give those parties certain advice and certify that they have done so. In the event that these technical requirements are not adhered to, then it is quite possible that a Court will overturn the Agreement and it may be of no effect.

Pre-Nuptial/Financial Agreements apply not only to marriages but in relation to defacto relationships as well. You are living in a defacto relationship when you and your partner are living together on a genuine domestic basis but you are not married to each other. A large number of matters are looked at to define defacto relationships, including the length of time that you have been in the relationship, whether finances are intermingled, whether you live together under the one roof and whether you have children together. There are other matters that are considered as well.

In the event that your relationship breaks down and you do not have a Pre-Nuptial/Financial Agreement, then it is essential that you obtain immediate legal advice on your rights and obligations. We can assist you negotiating a settlement, however, it is always wise to give early consideration to entering into a Pre-Nuptial/Financial Agreement so that the future contains some certainty.

Should you have a query, contact one of our lawyers on (03) 9088 3184.