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The new Child Support Scheme - Introduction

The final stage 3 components of the new Child support scheme came into operation in July 2008. These reforms arose from the work that commenced in 2002 through the house of Representatives Standing Committee on Family and Community affairs which produced a key document “Every Picture Tells a Story”. Many other related pieces of legislation and documents were produced along the way including both the Child support and Family Law explanatory memorandum. Family assistance and other calculations changed after July 2008. The new child support changes affect over 1.4million (2008) customers of the Child Support Agency and transfer over 2.68 Billion pa (06/07).


The new Child Support Scheme

The commencement date for final changes came into place on 1 July 2008 and the key changes were based around: Actual costs of children Each parents income and treats incomes in same way Recognises parents may meet some costs of care and discounted the formula to take that into account Two types of agreements binding and limited agreements that can be negotiated by parents. Connection between family assistance and child support with a concept around more child support less Family tax benefit Hi costs after separation From July 1 if you earn extra money after separation you can apply for that extra income to be exempted for up to three years.


New Way of Calculating Child Support

Provides a new formula based on the actual costs of your children. The new formula has a more balanced approach. The formula used to be based on a fixed rate nor did it consider the age of the children. The new formula now takes into account the costs of care into the formula. The old formula deals with first and second families the same way but this has been significantly changed in the new formula to make it more equitable. There are a range of calculators on this site and at the CSA to deal with the formula amounts. The changes allow for Private collect arrangements where the parents agree, Self Administered and CSA Collect arrangements.


8 Steps to the New Formula

The formula has a number of key steps in arriving at the amount of child support to pay based on: Child support income, Combined Child Support income, Income Percentage, Percentage of Care, Cost Percentage, Child Support Percentage, Costs of the Children, Results in an annual rate of child support transferable.


The Basic Child Support Formula

The new formula is based on 3 important principals: The cost of raising children, based on independent Australian research is now the basis for the formula. Both parents incomes will be taken into account (An income shared approach.) Recognises care as an important contributor towards meeting the costs of a child.


Other Changes to Child Support

Levels of care or care bands have been determined with 5 categories: Below regular (0 - 51 nights), Regular (52 - 127 nights), Shared (128 - 237 nights), Primary (238 – 313 nights), Above primary (314 - 365 nights)




Summary




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