Payment of child support to third parties may be by court order or agreement. The payment to third parties can be credited to the monthly child support payment. There are two acceptable modes of payment of child support which can be credited to the paying parent. The most usual mode used is direct payment which entails paying the child support directly to the receiving parent.
The second mode of payment is the third-party payment which are child support payments made by the paying parent to a third party for the benefit of the receiving parent.
There are many forms of third-party payments which can be credited as child support such as when the paying parent pays for the following:
Third party payments made be made by court order or agreement of the parties. If the payment for child support to third parties is through a court order, there will be a specific directive as to this. The court order will mention that the payment to the third party is made under Section 124 of the Child Support (Assessment) Act 1989.
The order will specifically mention that the paying parent is providing child support to receiving parent’s child through, for example, payment of orthodontist bills for the child. The advantage of a court order is that it will specifically mention if the payment to the third party will be credited as a child support payment and for what period the payment will be credited.
With a court order, the paying parent is guaranteed that the third party payment he made will be recognized and credited as child support payment. There is no more room for interpretation or disagreement because of the clear order of the court. It is likewise advantageous if the parties entered into an agreement about third-party payments to be credited as child support payment. In the agreement, the parties can stipulate in the same way that the Court does in order so that everything will be clear and upfront as to the payment of child support to third parties.
There are instances, however, that the receiving parent does not agree that the payment made to a third party be credited as a child support payment. When this arises, the rule is that as long as the paying parent pays 70% of the normal monthly child support payment, then a maximum 30% of the payment made shall be credited.
The condition is that the payment made must be a prescribed payment like child care costs, tuition fees, medical bills and the abovementioned items made to third parties. Thirty percent of the monthly payment will continue to be credited each month until the full amount of the prescribed payment shall be credited.
Prescribed payments are only credited if the paying parent has less than 14% of care for any child. The reason is that if the paying parent already has more than 14% care, the costs incurred in providing care for the child is considered in the child support formula.
In deciding whether the payment made was intended as child support, the Registrar will receive evidence from both the paying and receiving parent whether the payment at the time it was made was intended for child support. The Registrar will receive both oral and written testimonies as to the intention and the circumstances surrounding the payment.
The Registrar will also be discussing the evidence with both parties thereby giving them an opportunity to explain and respond to the statements of the other party. Whether the parents have made previous payments which were credited as child support will be taken into consideration by the Registrar in determining the intention for the present payment.
Documents that were presented to the Registrar by the parties will also be taken into account. It may be that there is a court order or pending legal proceedings about the payment made which the parties have to disclose to the Registrar so that these will be properly considered.