Child Support Explained: Who Pays and How Is It Calculated?

Co-Authored by Jade Johnston

KEY TAKE-AWAYS

• Child support is designed to ensure children receive appropriate financial support from both parents following separation.
• Services Australia uses a legislated formula that considers income, care arrangements, and the age of the children to calculate child support.
• Parents can either rely on a formal child support assessment or make their own private child support arrangements.
• If you disagree with a child support assessment, you may have rights to object or seek a review.

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How is Child Support Calculated in Australia

Child support is calculated using a formula that considers both parents’ incomes, the amount of care each parent provides, and the ages of the children. Services Australia uses this information to determine who pays child support and how much is payable.

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What is Child Support?

Child support is a financial payment paid by one parent to the other parent, following separation or divorce. In Australia, Child support is governed by the Child Support (Assessment) Act 1989 (Cth) (“the Act”). The Act provides that its main goal is to ensure that children receive an appropriate level of financial support from their parents when their parents have separated.

There are two ways that child support arrangements can be made.

1. First, parents can choose to apply a child support assessment, meaning that their rights, obligations and the amount of child support to be paid will be assessed by the Child Support Agency.

2. Alternatively, parents can choose to self-manage child support payments or in other words, come to their own private agreement as to how much to pay, when to pay and how to pay child support.

 

Who Pays Child Support and How Much?

Where you decide to apply for a child support assessment, the Agency uses an assessment formula which involves looking at your circumstances to work out the amount of child support that needs to be paid per year.

In general, there are two main factors that the Agency considers in determining who pays and the amount that must be paid.

In working out who pays, the agency will consider both your and the other parent’s income equally, and in doing so, identify the parent whose percentage of care of a child is less than their share of the combined income.

In working out how much or the amount to be paid the Agency will consider three main things.

1. The parent’s income and combined income

2. The percentage or amount of care that you and the other parent provide the child/ren

3. The age/s of the child/ren.

 

Who Pays Child Support?

• Each parent’s income is looked at when a child support assessment is being made.
• The Agency use information from the Australian Taxation Office (ATO), specifically each parent’s adjusted taxable income for the financial year immediately preceding the current child support period.
• If a parent hasn’t lodged a tax return for the last financial year, the Agency will determine a provisional outcome for them.
• A parent must tell the Agency if and when their income changes

 

How Much Child Support Must Be Paid?

• The Agency does not just consider the parent’s income and combined income in determining the amount of child support to be paid but also the amount of care each parent provides.
• If you and other parent don’t agree on the amount of care that each of you provide, the Agency will work this out for by using pieces of evidence that can show each parent’s care percentage.
• Some of the materials the Agency may request include diaries showing when you care for the children, a court order or parenting plan, doctor visit records, medical visit records, day care or school documents, and statements by other people.
• A parent must tell the Agency within 28 days of their care arrangements increasing or decreasing.

 

How is Child Support Calculated? The Child Support Assessment Forumlas

Part 5 of the Child Support (Assessment) Act 1989 (Cth) provides that there are six different administrative formulas for calculating the annual rate of child support payable by a parent for a child/ren.

These Formula’s are:

Formula 1 – the basic formula

• What cases is this formula used for? This is the most common formula that is used and assesses cases where only the parents provide care of the child/ren and neither parent has another child support assessment case.

Formula 2 – single case with a non-parent carer

• What cases is this formula used for? This formula is used for cases where there is a non-parent carer who provides some care for the child/ren and neither parent has another child support assessment case.

Formula 3:

• What cases is this formula used for? This formula is used for cases where one or both parents have one or more child support cases open, and there is no non-parent carer.

Formula 4:

• What cases is this formula used for? This formula is used is used for cases where one or both parents have one or more child support cases open, and there is a non-parent carer.

Formula 5:

• What cases is this formula used for? This formula is used when a non-parent carer applies for a child support assessment and considers only one parent’s income, in instances where other parent is not an Australian resident or there are other special circumstances.

Formula 6:

• What cases is this formula used for? Similarly to Formula 5, this formula is used when a non-parent carer applies for an assessment but considers only one parent income due to the death of the other parent.

 

How to Calculate Child Support Using the Basic Formula

As flagged above, unless you find yourself in circumstances outlined in formula’s 2-6 (you are a non-parent carer applying for child support or, a parent with multiple child support cases), most generally, the annual amount of child support payable will be calculated using Formula 1, commonly referred to as the Basic Child Support Formula. This is an 8-step formula.

1. Identify the child support income for each parent

• Firstly, each parent’s child support income will be identified.
• This requires assessment of a parent’s taxable income not including the amount that each parent needs to support themselves.
• The Agency will use information from the Australian Taxation Office (ATO) to determine each parent’s adjusted taxable income for the financial year immediately preceding the current child support period.
• If a parent hasn’t lodged a tax return for the last financial year, the Agency will determine a provisional outcome for them.

 

2. Calculate the combined child support incomes for a total child support income

• Next, each parent’s incomes will be added together to work out a combined child support income.

 

3. Calculate each parent’s income percentage
   • Next, each parent’s incomes will be divided by the total child support income to work out their income percentage.

 

4. Determine each parent’s percentage of care

• Next, each parent’s percentage of care must be determined. This refers to the amount of care each parent provides for the child/ren.
  • EXAMPLE: one parent may provide care for 70 nights a year, while the other parent provides care for the remainder of the time.
• There are 5 levels of care that are used when determining a parent’s percentage of care.

1. Below regular care:

• Care from 0% to 14% of the time
• = 0 to 51 nights a year or
• = 0 to less than 2 nights a fortnight

2. Regular Care

• Care from 14% to 34% of the time
• = 52 to 127 nights a year or
• = 2 to 4 nights a fortnight

3. Shared Care

• Care from 35% to 65% of the time
• = 128 to 237 nights a year or
• = 5 to 9 nights a fortnight

4. Primary Care

• Care from 65% to 86% of the time
• = 238 to 313 nights a year or
• = 10 to 12 nights a fortnight

5. More than primary care

• Care for more than 86% of the time

A parent who provides primary care and more than primary care are not required to pay child support.

NOTE: If you and other parent don’t agree on the amount of care that each of you provide, the Agency will work this out for by using pieces of evidence that can show each parent’s care percentage.

Some of the materials the Agency may request include diaries showing when you care for the children, a court order or parenting plan, doctor visit records, medical visit records, day care or school documents, and statements by other people.

 

5. Determine the cost percentage

This step requires use of the ‘Care and Cost’ Table.[1]

• Referring to the care percentage determined in the prior step, use the table to identify your cost percentage, or in other words, the share that you directly contribute to the child’s costs through care.
• EXAMPLE: If you have a care percentage of 66% or provide care for 238 nights a year, then your cost percentage will be 76%.

6. Calculate each parent’s child support percentage

• Next, each parent’s child support percentage must be calculated; this is ultimately the step that determines which parent will pay child support and which parent will receive child support.
• To calculate the child support percentage, the cost percentage (as determined in step 5) will be subtracted from the income percentage for each parent (as determined in step 3).
• The parent who has the negative child support percentage will receive child support payment.
• The parent who has the positive child support percentage will be required to pay child support.
• NOTE: if you have different care arrangements for several children, you could have different child support percentages for each child.

 

NOTE: that for the following steps 7 and 8, it is only the positive child support percentage that that is used for calculation.

 

7. Work out the cost of each child

• The Agency recognises that the costs for each child will differ depending on the parent’s combined child support income, the child/ren’s age/s and the number of children.
• As such, the cost for each child is calculated with reference to the parent’s combined total income (as determined in step 2) as well as the ‘Costs of Children’ Table.[2]
• There are three different tables that may be used
  • Children aged 12 and Under
  • Children aged 13 or older
  • Children of mixed ages

 

 

8. Work out the child support amount

• This step provides us with the final figure that the paying parent must pay the other parent.
• The final child support amount to be paid per year (also referred to as the annual rate of child support) is calculated by multiplying the positive child support percentage (as determined in step 6) by the cost of the child (as determined in step

What Can You Do?

Object a child support decision

You may be able to send an objection to a child support assessment decision.

• If the Child Support Agency come back with a decision that you do not agree with, such as the care percentage of the other parent (the amount of time the other parent provides the child/ren), you may be able to send an objection.
• The Agency will often send you a decision letter outlining their reasons.
• It is important to read this letter carefully and consider objecting the decision in instances where the Agency has used incorrect or outdated information, or important details and facts pertaining to your unique situation/circumstances have not been considered. You may also object where the law has not been applied correctly, and that’s why visiting a family lawyer is integral where you suspect that your child support decision has been made incorrectly.
• You can also refer to the child support Guide on the Department of Social Services website https://guides.dss.gov.au/child-support-guide/2/2/2
• Note that you have 28 days from the day you receive the decision letter to object a decision.
  • However, there is an exception for objections about care percentage (the amount of time the other parent provides the child/ren) which can be objected at any time. Note however that where objections are not received by the Agency within 28 days, they will not be able to backdate child support changes.
• If you do not agree with decision about the care percentage, it is a good idea to call the Child Support general enquiry line (131 272)

Decisions you cannot object

There are some decisions that can only be reviewed by a Court or the Administrative Review Tribunal (ART)

• Decisions pertaining to who is or is not a child’s parent (only court can determine this),

Changing a departure prohibition order (you can only appeal to a court)

The Family Lawyers at Coutts can provide advice to parents who are wanting to understand their child support agreements and assessments.

Services Australia Support Number

For questions about child support, the Services Australia Child Support Enquiry Line is available to assist. By calling 131 272, parents can access support for a range of matters, including:

• Applying for child support
• Registering for child support collection
• Understanding child support calculations
• Resolving issues related to child support payments
• This helpline is a valuable resource for navigating the child support system and ensuring that obligations are met fairly and efficiently.

Need Help Understanding Child Support?

Child support assessments can become complicated, particularly where care arrangements, income, self-employment, or parenting disputes are involved. Every family’s circumstances are different, and understanding your rights and obligations is essential to ensuring a fair outcome for both parents and children.

Whether you’re seeking advice about a new assessment, a private child support agreement, or challenging a decision made by Services Australia, the Family Law team at Coutts Lawyers & Conveyancers can help you understand your options and navigate the process with confidence.

📞 Contact our team today to discuss your child support matter and receive tailored legal advice.

 

Common FAQs?

📌 Who pays child support in Australia?
Generally, the parent whose share of the combined income is greater than their share of care for the child may be required to pay child support.

📌 How is child support calculated?
Services Australia uses a formula that considers each parent’s income, the percentage of care they provide, and the age and number of children involved.

📌 Can parents make their own child support agreement?
Yes. Parents can enter into private child support arrangements rather than relying solely on a formal assessment through Services Australia.

📌 What is a care percentage?
A care percentage refers to the amount of time each parent cares for the child. It is a key factor used when calculating child support obligations.

📌 What if I disagree with a child support assessment?
You may be able to lodge an objection if you believe the decision was based on incorrect information, failed to consider relevant circumstances, or incorrectly applied the law.

📌 Can child support assessments be changed?
Yes. Assessments may change if there are changes to income, care arrangements, or other relevant circumstances. Parents should notify Services Australia when significant changes occur.

📌 How long do I have to object to a child support decision?
Generally, you have 28 days from receiving the decision to lodge an objection, although different rules may apply for care percentage disputes.