The Child Support Scheme information for Centrelink 277-51020000

The Child Support (Collection and Registration) Act 1988 commenced on 1 June 1988.

For a Stage 1 child, a person caring for the child could:

• seek a court order or register an agreement for child support with the Family Court
• ask Child Support to collect child support payments if they are unable to privately collect the full amount of a court order or court registered agreement for child support

The Child Support (Assessment) Act 1989 commenced on 1 October 1989. It covers parents who separated on or after 1 October 1989 or who have at least 1 child born on or after that date. Instead of each case being a matter for the courts, Child Support is determined administratively according to a predetermined formula applied to the income of both parents and the care they have of the child/ren.

For a Stage 2 child, a person caring for the child could:

• apply for a child support assessment
• register a child support agreement with Child Support
• ask Child Support to collect child support from the payer - if they are unable to make a private arrangement to collect their full child support entitlement
• appeal to the Family Court if not satisfied with a review of child support assessment by Child Support

The Child Support Scheme Reforms were implemented in 3 stages between July 2006 and July 2008.

The new Child Support Scheme was created to meet the best interests of children, to better balance the interests of parents, and to better reflect today's community. The new Child Support Scheme also takes into account the costs of raising children.

Under the new Scheme:

• child support payments are calculated based on the actual costs of raising children
• combined income of both parents is used to calculate child support payments, treating the incomes of both parents in the same way
• recognition of the contributions of both parents to the cost of their children through care and contact
• children of first and second families are treated more equally

These reforms:

• increased the minimum payment so child support payments kept pace with inflation
• strengthened Child Support's capacity to ensure parents pay their child support payments in full and on time
• recognised non-resident parents on JobSeeker Payment (JSP) or Youth Allowance who have contact with their children by paying them a higher rate of payment
• reduced the maximum amount of child support payable by higher income earners to ensure these payments are better aligned with the actual costs of raising children
• introduced fairer arrangements for assessing the capacity of parents to earn income
• enabled parents who pay child support to spend a greater proportion of their payments directly on their children
• helped separating parents agree on arrangements for their children, including child support, by providing access to Family Relationship Centres (FRCs), the Family Relationship Advice Line (FRAL) and other expanded services

These reforms:

• introduced independent reviews of all Child Support decisions by the Administrative Review Tribunal (ART) to improve their accountability and transparency
• broadened the powers of the courts to ensure child support obligations are met, and strengthened the relationship between the courts and the Child Support Scheme, making the process easier and more responsive to parents' needs
• allowed separating parents more time to work out parenting arrangements before their Family Tax Benefit is affected by extending the Maintenance Action Test (MAT) timeframe for initial action from 28 days to 13 weeks

A Child Support Care Mailout to customers was undertaken by Child Support between October - November 2007 to check/confirm care details of children in preparation for the July 2008 changes. Child Support recorded the number of nights a child was in care.

New child support assessment notices were sent by Child Support to customers during March - May 2008.

Stage 3 changes included:

• the introduction of a new child support formula that changes the way child support payments are calculated, ensures more balanced assessments, encourages shared parenting and recognises the costs of contact
• ensuring a minimum payment is made for each child support case
• treating more equally income from second jobs and overtime that assists with re-establishment after separation
• ensuring fairer treatment of parents with dependent step-children when calculating their child support liability
• simplifying the 'change of assessment' rules for altering the amount of child support payable
• improving arrangements for parents who wish to make agreements for ongoing child support or lump sum payments
• making child support rules easier for parents who are trying to get back together
• aligning income definitions used to calculate child support and Family Tax Benefit (FTB), to ensure more consistent treatment of certain tax-free amounts, foreign income and fringe benefits
• changing the way FTB is calculated for people who share care
• changing the way maintenance income affects the amount of FTB paid

Child Support and Centrelink work closely together to provide high quality and timely service to our mutual customers. Child Support staff have an ongoing presence in many Centrelink Service Centres.

The role of Child Support is to:

• assess the eligibility of applications for child support
• calculate the amount of child support payable using the formula set out in legislation
• issue child support assessment notices to both parties (whether the liability is to be collected by Child Support or through a private arrangement between the parties)
• advise Centrelink (via the FAO system) about customers' child support entitlements
• advise Centrelink (via the Child Support Units) if child support applications are rejected
• advise Centrelink (via the FAO system) of child support payments collected
• determine and review periods of non-enforcement of court orders for payers under low income/change of custody provisions
• collect child support for resident parents under court orders, assessments or registered agreements
• advise customers about collection of their child support
• follow up non payment of child support
• transmit information to Centrelink to request and cease deductions from income support payments to pay the minimum child support liability
• liaise with countries that have a reciprocal agreement with Australia to enforce a Child Support assessment, court order or agreement, and
• register child support agreements for customers and advise customers of decisions about agreements

The role of Centrelink is to:

• administer the Maintenance Action Test (MAT) for Family Tax Benefit (FTB) customers. This includes obtaining information from the customer, maintaining details on the customer's record, and advising FTB customers what action they need to take, including referrals to Child Support to apply for a child support assessment / collection.
• administer the MAT. This includes advising customers of the effect of maintenance income on their rate of FTB Part A.
• maintain the FAO system to allow for the transfer of child support entitlement and disbursement information from Child Support
• monitor and action system generated reviews in relation to child support
• accept Child Support forms from customers and pass these onto Child Support
• action a request for Administrative Review Tribunal (ART) appeal against a Child Support decision refer to ART section
• maintain a system that allows deductions to be started and ceased from income support instalments to pay the minimum child support liability per instructions transmitted by Child Support.

A parent can apply to a court for a range of court orders about child support assessments and decisions made under the Child Support (Assessment) Act 1989 or the Child Support (Registration and Collection) Act 1988.

A court dealing with a parent's application must have jurisdiction to deal with child support matters. Courts with jurisdiction include the Family Court, the Federal Circuit Court, State and Territory Magistrates Courts and the Family Court of Western Australia.

Courts with jurisdiction can:

• make a declaration that a person should be assessed in respect of the costs of a child because the person is a parent of the child
• make a declaration that a person should not be assessed in respect of the costs of a child because the person is not a parent of the child;
• grant leave to make a change of assessment decision in relation to an administrative assessment for a period that is more than eighteen months earlier
• hear an appeal on a question of law in relation to an Administrative Review Tribunal (ART) first review of an objection decision; or an ART second review of an ART decision
• make an order for child support to be in a form other than periodic amounts; or an order to provide child support in the form of a lump sum payment to be credited against the assessment
• set aside a child support agreement; enforce non-periodic provisions of registered agreements
• make urgent (or interim) orders for people who need child support while waiting for Child Support to issue an assessment
• make a ‘stay order’ which stays or otherwise affects the operation or implementation of the Child Support (Assessment) Act or the Child Support (Registration and Collection) Act
• make an order that a person refund an amount of money paid as child support where no liability to pay child support existed
• make orders in relation to property settlement or spousal maintenance which have regard to child support obligations