When parties separate they can either agree on child support (which can be informal or formalised with the assistance of a lawyer) or parties can apply to the Services Australia to have a Child Support Assessment undertaken.
When the assessment is requested, the Child Support Registrar calculates the relevant amount of support that should be paid in accordance with a prescribed formula which takes into account the number of children, both parent’s incomes, and a number of other factors. Once issued the amount payable under the administrative assessment is enforceable by the Child Support Registrar against the liable parent. But what if you are already supporting the other parent in other ways, such as paying school fees, the mortgage the child is living in, or other expenses for the child?
Such payments could be what is called “Non-Agency payments” which should be credited against the child support liability. This usually occurs by agreement with the other parent, but if the other parent does agree that the payments should be credited, you can seek credit for a “prescribed non-agency payment” pursuant to Section 71(c) of the Child Support (Registration Collection) Act 1988. To succeed in that application, you must first demonstrate that the payments were prescribed payments, which are defined as:
- Childcare costs for the child who is subject of the liability;
- Fees charged by a school or preschool for that child;
- Amounts payable for uniform and books required by school or preschool for that child;
- Fees for essential medication and dental services for that child;
- The payee’s share of amounts payable for the payee’s home; or
- Costs to the payee of obtaining and running a motor vehicle including repairs and standing costs.
Any payments made before the commencement of the assessment cannot be credited as a liability is not created until the assessment is in effect.
The credit can only be up to a maximum of 30% of the current liability from the date of the notification of the payment provided that the balance of the child support liability for the month:
- is paid as it becomes due and payable (i.e you need to have paid 70% of that month’s liability),
- has not already been met by a lump sum credit; and
- You continue to have less than 14% care of the child (0-51 nights a year care of the child).
Any excess amount over that 30% for the month will be retained as an uncredited amount. This uncredited amount will then be applied against your future liability next month as long as the conditions above are still met.
The Registrar is only able to credit the excess payments towards any child support arrears that are accumulated before you notifying them of the payment, so the excess will only apply to arrears after you make the notification and provided you are paying at least 70% of the liability.
The Registrar does retain the ability to refuse to credit non-agency payments regardless of whether it is a prescribed payment or not if “the amount ought not to be credited”. Some examples include:
- The payee’s agreement was obtained through coercion or harassment;
- The credit is an expense that has already been taken into account in a change of assessment decision;
- The credit you are claiming is an expense that you had already undertaken to pay in addition to the liability as specified in the agreement between the parents. This agreement does not necessarily have to be formal – emails have been considered by the agency to be sufficient evidence;
- The credit is for an expense that you are to pay under the terms of a court order;
- The credit you are claiming is an expense for which you are solely responsible; and
- The credit that you are claiming is for loan repayments and the payee can demonstrate you have a history of regularly withdrawing funds from the loan account using its redraw facility.
Child support is a complex area of family law and there tends to be 28-day time limits to object to decisions made by the Child Support Registrar. Legal advice is essential. If you have a child support dispute or other family law matter, please contact our office at (02) 4944 3322 to make an appointment with Hayden Carr.
