Sometimes separated parents wonder how they can avoid paying child support during separation. Child support ensures that each parent provides adequate financial support to the children.

Whether they were married, de facto, or even in a relationship, all parents are required to provide financial support for their children, including legally adopted children. An attempt to avoid providing financial support for a dependent child is neither legally nor ethically acceptable. It is still important for parents to understand how child support obligations are calculated so that they can ensure they are only paying an amount that is fair and equitable.

How is child support determined?

Child support cannot be avoided entirely, but the amount of child support will depend in part on the process used to calculate it.

Co-parents who are able to communicate effectively can agree privately about the financial support of their children through a Limited Child Support Agreement. As these agreements do not require either parent to consult a solicitor, they allow parents to make changes at any time without the need to consult a lawyer.

Signing a Binding Child Support Agreement is a more formal way to make a child support arrangement. Even though both parties need independent legal advice, the agreement is still a cooperative one and is between the two parties as co-parents. School fees or health insurance may be included in your agreement as cash or non-cash payments. 

Depending on the agreement, irregular expenses, such as sports, camps, and dental care, will be covered, or parents may determine which additional irregular expenses to cover on their own.

There are times when a couple is better placed to decide what is best for their kids' financial futures.

When parents cannot agree privately on the amount of child support that is appropriate, or if one parent does not intend to pay child support, the Department of Social Services (DSS) will determine the amount of child support required and enforce the decision in accordance with the Child Support (Assessment) Act 1989 (Cth).

It is the Department of Social Services (DSS) responsibility to assess child support liability and enforce the decision according to the Child Support (Assessment) Act 1989 (Cth) if parents cannot agree privately regarding the amount of child support that should be paid, or one parent intends not to pay child support.

What factors go into calculating child support?

It is determined primarily by three factors: the number of hours each parent devotes to direct care for the child; the amount of income each parent earns; and the number of dependent children that each parent has.

A child spends 50% of their time with each parent, so each parent has to pay a proportionate share of the cost of raising that child. It's assumed that the parent who spends more time with the child will have to pay a higher percentage of the costs, and the other parent will have to make a bigger contribution.

Regardless of how much time kids spend with each parent, if one parent earns more than the other, they need to share some of it. It's fair because kids deserve reasonable material support from both parents.

What's the formula for calculating child support?

The calculation of child support is based on all taxable income. The reduction of taxable income, for example, by making charitable donations, will result in a lower tax obligation. The amount of taxable income included in child support obligations will not be reduced by salary sacrifice, salary packaging, or negative gearing of properties. Therefore, these amounts cannot be reduced to reduce child support obligations.

It is important to inform DSS if a partner’s income decreases by more than 15%. As previous overpayments cannot be recouped, the parent is responsible for reporting a salary decrease as soon as possible. A decrease of this magnitude will likely reduce a parent's child support obligation.

If child support is not paid, what happens?

If a parent can't pay the mandated amount, DSS may accept instalments.

If child support is not paid, and no attempt is made to reconcile the debt with DS if one parent intends not to pay child support, the Department of Social Services (DSS) will assess child support liability and enforce the decision based on the refund of tax returns. In addition, they can prevent delinquent payments from traveling overseas and escalate the issue through litigation and prosecution. A child support debt cannot be discharged through bankruptcy.