The Child Support Agency determines child support by using the shared income approach

The Child Support Agency (CSA) determines child support by using the shared income approach. This approach emphasizes the intention of the law for the parents to equally share the costs and care for their child.

The child support income of a parent includes the adjusted taxable income less the self – support expenses of the parent, less any relevant dependent child amount and less multi-case allowances if any. The following are some of the factors considered in assessing the adjusted taxable income, if applicable to the parent:

• Taxable income;
• Reportable fringe benefits;
• Employment benefits;
• Net financial investment loss;
• Target foreign income;
• Total tax-free pensions;
• Net rental losses and financial investment losses which exceed the gross income from those investments;
• Reportable superannuation contributions.

The CSA will then get the income percentage by dividing each parent’s support income by the combined child support income. Afterwards, the cost percentage is determined in order to know the percentage of the cost each parent is providing for the child. The cost percentage table is found in Section 55 C of the Child Support Assessment Act 1989. Once the cost percentage has been derived it is then subtracted from the income percentage of each parent and the difference is called the child support percentage.

A negative child support percentage means that the parent is more than meeting the costs and care for the child. A positive child support percentage means that the parent must pay child support because he is not meeting his entire share for the costs and care of the child.

To determine the amount of child support this parent needs to pay, the positive child support percentage is multiplied by the costs of the child or the total amount representing the expenses and care for a child. The product is the final amount of child support the parent has to pay to the other parent.