Tips & Tricks
Care Issues: What’s the Magic Number?
Spoiler alert: 52 nights is the 1st magic number.
One of the major factors impacting the calculation of child support is the level of care being applied to the child support formula calculations.
The Difference Between Care Percentage and Cost Percentage
Care percentage is the percentage of actual care a parent/carer provides over a 12-month period. For example, 52 nights of care equals 14% care.
Cost percentage calculates what percentage of costs you incur by having different levels of care. As your care percentage increases, so do the costs incurred by having that care.
When a parent/carer expects to have a minimum of 52 nights of care in a 12-month period, the child support assessment can be adjusted to reflect that the person is incurring costs by having that amount of care. For each care percentage, there is a corresponding cost percentage that goes hand in hand.
Care and Cost Percentages
For care between 52 and 127 nights, Child Support refers to this as “Regular Care.” The care percentages in this bracket range from 14% for a minimum of 52 nights to 34% for 127 nights in a 12-month period.
Here is the key point: Any percentage of care in this first bracket equates to a cost percentage of 24%.
This means the financial impact is THE SAME whether you have 52 nights of care (an average of 4 nights per month) or 127 nights (an average of just over 10 nights per month).
In Summary
The table below shows the cost percentage that applies to different levels of care.
Percentage of care | Cost percentage |
0 to less than 14% | Nil |
14% to less than 35% | 24% |
35% to less than 48% | 25% plus 2% for each percentage point over 35% |
48% to 52% | 50% |
More than 52% to 65% | 51% plus 2% for each percentage point over 53% |
More than 65% to 86% | 76% |
More than 86% to 100% | 100% |
If a parent or carer has 35% care or more of any child claimed in the assessment, they are considered eligible for a child support assessment for that child. They can also apply for additional Family Assistance benefits for that child if they meet Centrelink’s requirements.
Detailed explanations on care can be found here:
I Object
If you disagree with a decision made by child support (the Department) or centrelink, you can ask for that decision to be reconsidered, also known as lodging an objection. CSRC Act section 80(1)
Details on the Objection requirements and process can be found here in the Services Australia resource: the Child Support Guide.
https://guides.dss.gov.au/child-support-guide/4
If you believe the decision is incorrect or that certain facts were not considered in the original decision, you have the right to have your objection heard. An objection is a full merit review. If the objection is successful, the original decision is removed as if it never happened and is replaced by the new decision made under objection.
If you are lodging an objection to a care decision, you can lodge your objection by calling child support and lodging over the phone or in writing. All other objections must be in writing.
You must state the grounds for your objection in full and in detail for it to be progressed to the next stage. (CSRC Act section 84)
There are time frames within which you must lodge an objection. At the bottom of the original decision letter, there is always a disclaimer if the decision has objection rights. In general, you have 28 days to lodge your objection plus time for postage. If the 28-day timeframe has lapsed, you can submit an application to lodge your objection late. If that request for an extension of time (EOT) is granted, your objection will progress to the next stage.
What if I was not notified of the original decision and the 28 day period has long lapsed.
It is important to note you are required to lodge your objection within 28 days of the day you were served with written notice of that decision (CSRC Act section 81(1)).
If a decision letter was not sent by child support to notify you of the decision, you can request child support send it to you. You may have 28 days from then to lodge your objection.
What Decisions Can’t I Object To?
You cannot object to a decision to accept an application for assessment if the reason for objection is that you are not the parent of the child. If the objection is not withdrawn, child support can make the objection invalid.
There are no objection rights to a decision to refuse to accept an application for assessment if one of the reasons for refusal was that child support was not satisfied that a person who was to be assessed in respect of the costs of a child is a parent of the child. If the objection is not withdrawn, child support may make the objection invalid.
There are also no objection rights to enforcement action that has been taken to collect a child support debt. Nor can you object to the Legislation.
Although there are no objection rights to these decisions, there are limited and lengthy options available if this is something you want to pursue.
What if I Have No Evidence to provide
You may not be aware, there are literally dozens of types of evidence that can be provided to support an objection. For over 22 years, I analysed child support evidence, and it is not too difficult to provide factual and provable evidence. Some types of evidence are weighed as being much more reliable than others, so it is important to liaise with the objections officer to get an understanding of how different evidence is considered by child support’s decision-makers.
I am passionate about ensuring incorrect decisions are overturned and the sound and correct decisions remain unchanged.
Want to Know More?
If you have questions about the objection process from an ex- insider, or need assistance with ideas for evidence; consider booking a free consultation with me. No strings attached!
Whether you are a paying child support or a receiving parent/carer, if you have overdue child support or an overpayment, your tax refund could be at risk… or is it?
Perhaps you are anticipating a tax refund this year and have concerns child support may intercept it?
Did you know there is a way to have child support turn off the automatic process of intercepting your tax refund? It’s simple, you can call and ask! This must be done before you lodge your tax return. You then will have time to lodge an application together with supporting documentation for the specific amount you require. Some find this process difficult; however, if you are genuinely in hardship, this is easy to prove.
Typically, once you lodge your tax return, the income details are electronically sent to Child Support (The Department), where they are automatically uploaded and applied to your child support record.
Are you aware that strategically timing your tax return lodgement can maximize your savings and benefits? The date of lodgement plays a major role in the calculation of your child support assessment, as it determines when the new income will start to apply to your case(s). This rule also applies to tax returns lodged years overdue and even after a child support case has ended (though that’s another complex issue, but manageable).
If there is overdue child support or an overpayment owed on a persons’ record, the child support system automatically sends a request to the Australian Taxation Office (ATO) to release the exact amount needed to clear the debt. If the tax refund is less than the amount of the debt, the ATO will automatically release the full amount of the refund to child support.
In very special circumstances, such as genuine and provable hardship or if your essential living costs are in arrears, there is a way to have part or all of your tax refund released to you, even if you have a debt or an overpayment.
Discover expert tips and tricks from a seasoned professional in the field. During my tenure at Child Support, I was authorised to approve and decline customer refund requests based on hardship evaluations.
More detailed information on what Child Support considers to be factors contributing to hardship can be found here.
Agreement tips and tricks:
DIY agreement
If you are considering entering into a financial child support agreement, the Department has a pre -prepared agreement form (CS1666) with all the requirements covered. (CSA Act section 84(5)). The form is comprehensive and takes into consideration, unexpected events such as loss of employment or changes in care arrangements. You can use this form for both limited and binding agreements, and the best thing is, it’s free!
The only additional cost is, if your agreement is a binding agreement, both parties must have a legal certificate demonstrating they have received independent legal advice.
In some cases, the following can be a binding child support agreement, a property settlement order, parenting plan, maintenance agreement or financial agreement under the FL Act. For any of these to be accepted as a binding child support agreement, the document must meet ALL the requirements in sections 80C, 82, 83, 84 and 85. (CSA Act section 84(5)).
Pros and Cons of Limited Child Support Agreements
- Flexibility: Limited agreements provide more flexibility compared to binding child support agreements. Either parent can terminate the agreement after three years without needing the other parent’s consent.
- No Legal Advice Needed: Unlike binding child support agreements, Limited agreements do not require independent legal advice before being made. This can save both time and legal costs.
- Adaptability: These agreements can be adjusted if there is a significant change in circumstances, such as a change in income or employment status. This makes them more adaptable to changing financial situations.
- Cost-Effective: Since legal advice is not mandatory, limited agreements can be a more cost-effective option for parents who are on amicable terms and can agree on the terms without legal intervention.
- Certainty and Security: Limited agreements provide a clear framework for child support payments, offering both the paying and receiving parents a sense of certainty and security regarding their financial responsibilities.
- Less Stability: Limited agreements can be terminated more easily compared to binding child support agreements, which might lead to less financial stability for both parents.
- Dependent on Assessments: These agreements rely on a child support assessment being in place. The agreement must provide at least the assessed amount, which can limit flexibility.
- Frequent Adjustments: Changes in circumstances, like income variations, can require renegotiation or termination of the agreement, leading to potential disputes and frequent adjustments.
Steps involved:
- Negotiate Terms: Discuss and agree on the child support arrangement with the other parent. This can include both cash payments and non-cash items like school fees and health insurance.
- Draft the Agreement: Use the Child Support Agreement form or create your own document with the agreed terms. Make sure both parents sign the agreement. Each parent can sign the same document or separate identical copies.
- Submit the Agreement: Send the signed agreement along with any supporting documents. You can do this by fax, post, or online through your Child Support online account linked to myGov.
- Request Acceptance: Apply for the agreement to be accepted by the Department. This can be done in writing or over the phone. Once submitted, child support will review the agreement and inform both parents of the outcome.Limited child support agreements can be a viable option for many parents, especially those looking for a more flexible and cost-effective arrangement.
Pros and Cons of Binding Child Support Agreements.
- Certainty and Predictability: Binding child support agreements provide clear terms for child support payments, giving both parents/carers certainty about their financial obligations and rights.
- Flexibility: These agreements allow parents to tailor the terms to their specific needs, including provisions for private school fees, extracurricular activities, and other unique expenses.
- Legal Enforceability: Once signed and registered, binding child support agreements are legally binding and enforceable through the courts, allowing legal action if one party fails to comply.
- Avoids Government Involvement: Parents can negotiate and agree on child support payments without relying on the government Departments of child support and centrelink, simplifying the process and reducing bureaucratic delays.
- Cost-Effective: Creating a binding child support agreements can be less expensive than going through the Family Court for Consent Orders, especially if both parties are on amicable on terms.
- Legal Complexity: Binding child support agreements requires both parties to obtain independent legal advice, which can be time-consuming and costly. The agreement must meet specific legal requirements to be binding.
- Not Suitable for All Situations: Binding child support agreements may not be appropriate in cases where there is a significant power imbalance between the parties or where one party is not acting in good faith.
- Financial Risk: If not carefully drafted, the agreement may not adequately cover all future expenses related to the child, leading to potential financial strain for one or both parties.
Key Points for lodging a Binding Child Support Agreement:
- Independent Legal Advice: Both parents must obtain advice from separate legal practitioners. This advice covers the effects of the agreement on their rights and the advantages and disadvantages of entering into the agreement.
- Form CS4137: The legal certificate is documented using Form CS4137, which must be completed by the legal practitioner who provided the advice. You can download this form here.
- Annexure to Agreement: The completed legal certificate must be attached to the child support agreement to make it legally binding.
- Legal Requirements: This process is mandated under Section 80C of the Child Support (Assessment) Act 1989
Steps Involved:
- Seek Legal Advice: Each parent consults a different legal practitioner to receive advice on the binding agreement.
- Complete Form CS4137: The legal practitioner fills out the form, confirming that they have provided the necessary advice.
- Attach to Agreement: The completed form is annexed to the binding agreement. This process is mandated under Section 80C of the Child Support (Assessment) Act 1989.
- Submit: The agreement, along with the legal certificates, is submitted to child support (The Department).
In summary: Parents need to carefully assess their children’s expenses and their own financial situations before entering into a child support agreement.
Whether you’re preparing an application for or need guidance on lodging it effectively, my expertise ensures your case is thorough, well-documented, and tailored to your unique circumstances. Let’s make this process smoother for you, reach out when you are ready to discuss if an agreement is the best solution for you.
The application must be in writing and can be submitted using the ‘Application to Change Your Assessment – Special Circumstances’ form.
As an advocate navigating the complexities of child support, I understand that sometimes circumstances change, and assessments need adjustment. If you find yourself in such a situation, here is how you can take proactive steps:
If you choose to apply, and do it yourself, the application form provided by the Department is comprehensive and is easy to complete. Identify Special Circumstances: First, assess whether your child support assessment truly reflects your unique situation. Are there special circumstances—financial, medical, or otherwise—that warrant a re-evaluation? These might include high contact costs, special needs, education expenses, or other relevant factors. The ‘Application to Change Your Assessment’ form outlines ten valid reasons for requesting a modification. These include:
- High Contact Costs: When maintaining a child becomes costlier due to communication or visitation expenses.
- Special Needs: If your child requires additional care beyond the norm.
- Education or Training Expenses: When educational costs impact the assessment.
- Child’s Financial Situation: If your child has income or resources affecting the fairness of the assessment.
- Payments to Others: Consider any payments made for the child’s benefit.
- High Child Care Costs: Especially relevant for children under twelve.
- Necessary Expenses: If your own necessary expenses hinder your ability to support the child.
- Parent’s Financial Situation: Income, earning capacity, and resources matter.
- Supporting Others: Sometimes other obligations affect your ability to provide.
- Other Special Circumstances: Any unique factors that justify a change.