Blog post by Jeremy Gitsham
Child support is often a contentious issue after a relationship breakdown, and while some parents seek to abscond from their obligations, the legislation provides that parents have a duty to maintain their children. This duty has priority over all commitments of the parent other than those of supporting themselves or any other child they are obliged to maintain.
When formalising child support arrangements, parties can consider:
- an assessment by the Child Support Agency;
- a binding or limited child support agreement registered with the Child Support Agency; or
- a private agreement.
While binding or limited child support agreements and private agreements can include specific clauses accounting for the payment of non-periodic expenses (e.g. education, co-curricular and medical expenses), an assessment by the Child Support Agency is instead for periodic payments of child support only (e.g. weekly, fortnightly, monthly or yearly payments calculated by the Child Support Agency on their criteria).
In the case of an assessment however, any payments over and above the periodic amount that has been assessed can be treated as ‘non-agency payments’ should the parties agree.
What is a non-agency payment?
A non-agency payment is one of the following types of payment:
- a payment made directly to a payee of a child support liability;
- a payment to a third party in discharge of a debt owed by the payee or payer of the child support liability; or
- a non-cash transaction, such as a transfer of property or the provision of services, taken to be an amount paid under the child support liability.
Non-agency payments can usually be credited towards child support if both parties agree for this occur, in which case both parties should notify the Child Support Agency of such agreement.
In the event the parties do not agree for a non-agency payment to be credited, the Child Support Agency can still credit certain ‘non-agency prescribed payments’ towards a payer’s child support liability regardless of the intention of the parents at the time the payment was made.
The prescribed payments can generally be applied towards a child support liability (to a maximum of 30% of the liability), provided that:
- the balance of child support is paid as it becomes due and payable;
- the payer has less than 14% care of all of the children to whom the relevant child support assessment relates at the time the credit is being applied; and
- the child support liability is not already being met by a lump sum credit.
Prescribed payments include:
- child care costs for the child who is the subject of the child support liability;
- fees charged by a school or preschool for that child;
- amounts payable for uniforms and books required by a school or preschool for that child;
- fees for essential medical and dental services for that child;
- the payee’s share of amounts payable for the payee’s home; and
- costs to the payee of obtaining and running a motor vehicle, including repairs and standing costs.