What is child support and how is it determined?

When parents separate, there are many areas of life that need to be re-organised and negotiated. Where there are children involved, things can be more difficult. Parents need to determine how they are going to support their children. This can be done through a private agreement or a voluntary arrangement between parties, or an official child support amount can be set.

Child support is a sum paid by parents who share care or who do not reside with the child. It is paid in order to help meet the costs of raising a child. Parents are eligible for child support where:

• They are separated and care is split
• One parent has primary care of the child
• A person who is not the parent resides with and cares for the child

A child support arrangement can be established:

• Privately – parties come to their own agreement and regulate their own payments.
• Voluntarily – parties come to an agreement and pay via Inland Revenue.
• By formula assessment – section 8 of the Child Support Act 1991 details that a formula assessment can be undertaken by Inland Revenue to determine the amount that is paid by parties. This will also be paid via Inland Revenue.

The formula assessment

Where a private or voluntary agreement cannot be reached, parents can apply through Inland Revenue for a formula assessment. The formula assessment is laid down in section 30 of the Act. This is based on the income of the parents, their living costs, the proportion of time the child spends in the care of each parent and the costs of raising the child and any other children in either parent’s care.

Departure from the formula assessment

The formula assessment can be departed from in certain circumstances. Section 105 of the Act details that, in order for the formula assessment to be departed from, it must be established that:

• One of the grounds for departure exists
• It is just and equitable to make a departure order
• That it would be otherwise proper to make a departure order

The grounds for departure include:

• Where the costs of other dependents reduce the capacity of the parent to support
• Where the costs of maintaining the child are impacted by other costs such as the child attending boarding school or the costs associated with special needs of the child
• Where the income, earning capacity and financial resources of either parent will cause financial support to be inequitable.

The Court will have regard to the objects of the Act, namely a parent’s duty to maintain their children, to determine whether it is just and equitable to depart from the formula assessment. It is evident that the formula assessment will only be departed from in strong circumstances that warrant it.

At the forefront of considerations are the child’s needs. A parent has a duty to maintain their children. The Child Support Act works to enforce this through assessing parental circumstances balanced against the need to adequately support a child.

Ultimately, the nature of the relationship after separation will dictate what arrangement is made for child support. Each avenue ensures that the child is at the forefront of concerns. For further guidance, contact the Family Lawyers, Bell & Co on (04) 499 4014.