Worked Examples and Checklists
How the child support formula works in Australia: a step-by-step worked example
The Services Australia child support formula explained step by step, with care percentages, the self-support amount, costs of children, agreements and an illustrative calculation.
Child support in Australia is assessed by Services Australia under the Child Support (Assessment) Act 1989 using a formula that combines both parents' incomes and the share of care each provides. In short: each parent's adjusted taxable income is reduced by a self-support amount; the two results are added to give a combined income; each parent's share of that is their income percentage; their share of care converts into a cost percentage; the difference between the two is their child support percentage; and if that is positive, they pay that percentage of the costs of the children, which come from a government table based on the combined income and the children's ages. The dollar figures in the formula are indexed every year, so check the current figures in Services Australia's estimator.
The example below uses illustrative figures to show the method. It is not an assessment.
The steps
| Step | What is calculated | Notes |
|---|---|---|
| 1 | Each parent's child support income = adjusted taxable income − self-support amount − any relevant dependent child amount | The self-support amount is tied to one-third of a national earnings measure and changes each year |
| 2 | Combined child support income = parent A + parent B | |
| 3 | Each parent's income percentage = their income ÷ combined income | |
| 4 | Each parent's cost percentage, from their care percentage | See the care table below |
| 5 | Child support percentage = income percentage − cost percentage | |
| 6 | A positive child support percentage means that parent pays | A negative one means they may receive |
| 7 | Costs of the children, from the Costs of the Children Table | Depends on combined income, number of children and age bands (0–12, 13+) |
| 8 | Annual rate = child support percentage × costs of the children | Paid usually monthly or fortnightly |
Adjusted taxable income includes taxable income plus items such as reportable fringe benefits, net investment losses, reportable super contributions and certain tax-free pensions.
Care percentage and cost percentage
| Nights of care a year (approx.) | Care percentage | Cost percentage |
|---|---|---|
| Fewer than 52 | Less than 14% | Nil |
| 52 to 127 | 14% to less than 35% | 24% |
| 128 to 175 | 35% to less than 48% | 25% plus 2% for each percentage point over 35% |
| 176 to 189 | 48% to 52% | 50% |
| 190 to 237 | More than 52% to 65% | 51% plus 2% for each percentage point over 53% |
| 238 to 313 | More than 65% to 86% | 76% |
| 314 or more | More than 86% | 100% |
Care of at least 35% is often called shared care; care of at least 14% is regular care. The care percentages also matter for Family Tax Benefit, so changes in care should be reported promptly.
Worked example (illustrative figures only)
Alex and Jordan have two children aged 9 and 12. The children live with Jordan and stay with Alex every second weekend plus half the school holidays: about 80 nights a year with Alex.
Assume, for illustration only, a self-support amount of $31,000 and a costs-of-children figure of $27,000 a year for two children under 13 at this combined income. Check the real figures for the current year.
- Child support income: Alex: $110,000 − $31,000 = $79,000. Jordan: $58,000 − $31,000 = $27,000.
- Combined: $79,000 + $27,000 = $106,000.
- Income percentage: Alex 74.5%; Jordan 25.5%.
- Care: Alex 80 nights ≈ 22% care → cost percentage 24%. Jordan ≈ 78% care → cost percentage 76%.
- Child support percentage: Alex 74.5% − 24% = 50.5%. Jordan 25.5% − 76% = negative.
- Alex pays.
- Costs of the children (illustrative): $27,000.
- Annual rate: 50.5% × $27,000 = $13,635 a year, about $1,136 a month.
If Alex increased care to 130 nights (about 36%), the cost percentage would become 25% + 2% = 27%, the child support percentage 47.5%, and the rate about $12,825 a year (same illustrative costs figure).
Agreements instead of an assessment
- Limited child support agreement: requires an assessment to be in place, and the agreed amount must be at least the assessed amount. Can be ended more easily.
- Binding child support agreement: can be for any amount, including lump sums or school fees, but each parent must get independent legal advice and a signed certificate. Hard to end without the other parent's agreement or a court order.
- Private arrangements without registering are possible, but they are not enforceable through Services Australia.
Collection and changes
Parents can choose Private Collect (paying each other directly) or Child Support Collect (Services Australia collects and pays). If income changes significantly, a parent can estimate their income for the rest of the year. A change of assessment can be sought in special circumstances, such as high costs of contact, a child's special needs, or a parent's income or earning capacity not being reflected in their tax figures. Departure orders and objections are available, and some decisions can go to the Administrative Review Tribunal.
Child support and property settlement
Child support is separate from a property settlement, but the Family Law Act requires the court to take child support provided or payable into account when it considers contributions and future circumstances (s 79(4)(g) and (5)(s)). Paying school fees or mortgage payments for the children's home after separation can be relevant in both. See the property settlement worked example.
FAQ
Is there a minimum amount?
Yes. A parent with low income usually pays at least a minimum annual rate set in the Act and indexed, unless they have at least 14% care or another exception applies. Check the current amount with Services Australia.
What if the other parent will not lodge tax returns?
Services Australia can use a default income figure or a provisional income. Lodging returns usually produces a more accurate assessment.
Does child support stop at 18?
Generally at 18, but a parent can apply to extend it to the end of the school year if the child is still in secondary school when they turn 18.
Can child support be used to buy assets?
Payments are for the child's support. A binding agreement can direct payments to specific expenses.
Sources
- Services Australia — child support estimator, current self-support amount and costs of children table
- Federal Register of Legislation — Child Support (Assessment) Act 1989
- Family Relationships Online — parenting arrangements and support
- Related: checklist, divorce and consent orders, free legal help
