Child Support, Child Maintenance, Child Maintenance Trusts
Separation and divorce can be hard on everyone. When a long-term relationship breaks down and children are a part of the picture, the emphasis changes from the adults involved to the kids who love and rely on Mum and Dad. Drawing up a fair and equitable child support arrangement can be stressful without the guidance and experience of an established child support law firm.
What is child support?
Child support is a financial contribution made by one parent to another to support the needs, interests and wellbeing of their child. Very occasionally, child support can be paid by one or both parents to another party, like a grandparent, who has assumed primary care of the child or children. Child Support applies to children under 18 years of age.
What is Child Maintenance?
A Child Maintenance agreement applies to children over 18 years of age. In this day and age children rarely leave home at 18 years of age. A child maintenance agreement addresses financial support to be given by separated parents when a child over 18 years but still relies on their parent for their financial needs.
What is Child Maintenance Trust?
A Child Support Agreement is an agreement (like a contract) registered with the Child Support Agency. It determines what you have agreed to pay from you after tax income to meet your child/children’s financial needs, for an agreed period of time.
A Child Maintenance Trust is a trust. There can be many advantages of a Child Maintenance Trust arrangement including:
- potentially significant tax savings;
- protection of property placed into the trust, for the benefit of the children and not third parties;
- Regardless of changed employment or assets of the paying party, the children’s support should continue uninterrupted;
- Given potential tax savings, a higher level of support for the children may be an unexpected consequence of such a trust;
- They can remain a legitimate income splitting vehicle which provides for surplus income to be distributed at the discretion of the trustee each financial year where potential beneficiaries are not limited to the children of the relationship;
- Such a trust may be able to operate for up to 80 years;
- Such a trust can provide a great opportunity for wealth transfer from parents or grandparents directly to grandchildren.
How much child support will you receive/ how much child support will you have to pay?
If you elect to have child support assessed the amount payable amount depends on a range of things, including other dependent minors and how much time the parent spends with the child. Keep in mind parents who forgo time with their children are still obligated to pay child support. We highly recommend coming to your own private agreement as there are some real advantages for both parents including but not limited to:
- Changes to your wage won’t result in a change in amounts payable;
- You can agree to pay the school or extra curricular activity directly;
- You can choose to be responsible for certain items like computers, mobile phones, private health insurance;
What age does child support stop in Australia?
Child support payments should continue until the child or children reach the age of 18. Other events that may halt payment, including the death of a child; if a child becomes independent from you and their other parent; if the child marries or lives in a defacto relationship and if the child is adopted.
What age do child maintenance & child maintenance trusts stop in Australia?
A child maintenance agreement or trust can last as long as you are agreeable for it to and set up as a trust it can deliver significant tax savings to the payer of child maintenance.
When do you need a lawyer in child support matters?
Involving a child support solicitor in your discussions will ensure the final arrangement will fairly reflect your needs as a primary caregiver or your responsibilities as the liable parent. We recommend you contact Thornton Storgato Law if any of the following scenarios apply to you:
- There’s uncertainty surrounding the child’s paternity
- One parent lives overseas
- You have concerns about child support or you have issues getting your ex-partner to pay their contributions on time or at all.
- You are the paying parent and you’re uncertain about the fairness of DHS decisions.
- You’re unsure about recent changes to child support payments.
- You have children ; e.g. attending private school/s, with special needs; for whom you would like private health insurance to continue to be paid.
Does child support have to be court ordered?
No, child support arrangements do not have to be court ordered. That said, we recommend you seek legal advice even if you’ve entered into a private arrangement to ensure what you’ve set down is fair on you, your ex-spouse and your children.
How is child support calculated?
DHS uses an 8 step formula to calculate child support, taking into account your income, your ex-partners income, liabilities, dependents and a long list of other factors. Alternatively, you may opt to negotiate the payable number privately with your ex-spouse, recording the amount in a parenting plan. Although a parenting plan is a useful document, it is not enforceable by law – always protect your children and yourself. Our clients find the simple calculator available on the DHS website very helpful in determining a baseline number.
Disputing child support payments
DHS have an established child support dispute laid out here – if you’re not happy with the outcome, you can seek legal advice from a child support lawyer. In many circumstances the simple calculator is not sufficient to meet extenuating circumstance such as private school fees, private health insurance, braces, glasses, school devices etc. You will need to see us at Thornton Storgato Law if this is the case for you.
Who receives child support and how is it received?
The receiving parent receives child support via one of two ways. If a private agreement is in place, child support can be as simple as direct deposit into a nominated account according to a recorded and agreed upon schedule. If you’ve elected to go through DHS, the parent who has the recognised primary care of the child or children must go through a platform called Child Support Collect.
Alternatively, if you’re worried about where your money may be going, liable parents who are able to negotiate a child support arrangement with their former spouse may be able to pay for lifestyle and developmental essentials like school fees, private health, medical expenses etc directly to the provider in lieu of a dollar amount deposited into a bank account regularly.
Is your current arrangement working?
At Thornton Storgato Law we don’t just give out child support advice – we help our clients and their families settle into a new normal as fast as possible, delivering equitable solutions that are designed to keep your orders out of the courts.