Child support is calculated using a formula that is set out in the Child Support (Assessment) Act 1989 (Cth) (the Act). Services Australia calculates each party’s taxable income and each party’s percentage of care of the children. It then arrives at a combined income by adding the incomes together and subtracting the relative cost percentage in order to arrive at the child support payable by way of the resulting Assessment.

Part 6A of the Act provides for applications to be made to change a child support Assessment.

Several factors are considered for a Child Support Departure (including the income of each parent, the amount of time that each parent spends with the child, the children’s expenses etc) and there are two ways of achieving such departure –

Application for a “departure” from the Child Support Assessment to the Court

The first way to obtaining a child support departure order is by way of an application for a “departure” from the Child Support Assessment to the Administrative Appeals Tribunal or the Court when a party is unsatisfied with an assessment a result in the particular circumstances.

Three elements must exist 

  1. there must be grounds (set out below in Section 117(2) of the Act;
  2. it must be just and equitable and;
  3. it must be proper).

Whilst the Court does have jurisdiction to order a departure from a Child Support Assessment, such departure must consider the special circumstances of the caseand whether it is “just and equitable” and “otherwise proper”.

Section 117(2) of the Act

(2) For the purposes of subparagraph (1)(b)(i), the grounds for departure are as follows:
(a) that, in the special circumstances of the case, the capacity of either parent to provide financial support for the child is significantly reduced because of:
(i) the duty of the parent to maintain any other child or another person; or
(ii) special needs of any other child or another person that the parent has a duty to maintain; or
(iii) commitments of the parent necessary to enable the parent to support:
(A) himself or herself; or
(B) any other child or another person that the parent has a duty to maintain; or
(iv) high costs involved in enabling a parent to spend time with, or communicate with, any other child or another person that the parent has a duty to maintain;
(aa) that, in the special circumstances of the case, the capacity of either parent to provide financial support for the child is significantly reduced because of the responsibility of the parent to maintain a resident child of the parent (see subsection (10));
(b) that, in the special circumstances of the case, the costs of maintaining the child are significantly affected:
(i) because of high costs involved in enabling a parent to spend time with, or communicate with, the child; or
(ia) because of special needs of the child; or
(ib) because of high child care costs in relation to the child; or
(ii) because the child is being cared for, educated or trained in the manner that was expected by his or her parents;
(c) that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child:
(i) because of the income, earning capacity, property and financial resources of the child; or
(ia) because of the income, property and financial resources of either parent; or
(ib) because of the earning capacity of either parent; or
(ii) because of any payments, and any transfer or settlement of property, made or to be made (whether under this Act, the Family Law Act (or otherwise) by the liable parent to the child, to the carer entitled to child support or to any other person for the benefit of the child.”

The grounds for departure are summed up as the circumstances affecting the capacity of the parents; high costs in maintaining the children and where the child or the parent has an income not reflected through the formula used or where a payment was/is to be made for the benefit of the child.

Various grounds for a departure Order

Uncertainty exists as to the precise application of the various grounds for a departure order and this reflective in the case law.

In Gyselman and Gyselman (1992) FLC, it was held that “Each of those grounds [for departure from administrative assessment] is prefaced by the words, “in the special circumstances of the case.” Whilst it is not possible to define with precision the meaning of that term, as a generality it is intended to emphasize that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the Legislature is that the Court will not interfere with the administrative formula result in the ordinary run of cases.”

In Stirling v Dobson (2011) FLC, it was held that the parent’s high income was sufficient to establish a special circumstance. Ms Stirling argued that Mr Dobson’s ability to pay child  support amounted to a special circumstance and that Mr Dobson could afford to continue to pay child support far in excess of the formula amount. Mr Dobson offered to pay child support at the maximum assessed rate ($708/week for the three children), plus schooling and other nominated costs.

In relation to the definition of ‘special circumstances’ it was held that: ‘special circumstances’ are facts peculiar to a particular case which distinguish it from other cases, or make it special or out of the ordinary. The judge assessed whether Mr Dobson’s stronger financial position than Ms Stirling might be regarded as sufficient ‘special circumstances’ to support a departure application. It was decided by the Court that the financial circumstances of the parties, and the comfortable lifestyle enjoyed by the children did in fact set the case apart from other cases and that ‘special circumstances’ did exist. Further, is was held that an adherence to the provisions of the child support formula would result in an unjust and inequitable determination of the level of financial support and that there are grounds for a departure order under s 117(2)(c)(ia).

In Spencer & Marks [2011] FamCA, it was held that the disparate income between the parties was such that the wife would suffer undue hardship should the order not be departed from, and accordingly special circumstances were held to be present justifying a departure order to minimise the disparity.

In Nielson & Nielson, high schooling costs were relied upon as the ‘special circumstance’. It was held that the fact the ‘husband’s income and earning capacity are many times the cap rate’ was sufficient to establish a ground for departure.

However, not all judges have adopted the same approach; there are differing approaches to the interpretation of the special circumstances referred to in section 117(2) of the Act.

In Carroll & Maybury [2013] FCCA, the wife’s application for departure that rested on the husband’s high income was rejected.

In Seymour & Seymour [2011], it was decided that subsection 117(2)(c)(ia) of the Act should be interpreted not to permit a ground for departure to be established solely based on a parent’s very high income where the maximum child support rate is already being paid. 

“Binding child support agreement” or a “limited child support agreement”

The second way in which an application for a departure from the Child Support Assessment can be made is by way of a “binding child support agreement” or a “limited child support agreement”.

The consent of both parties is needed to enter into such an agreement and each party would require independent legal advice from an Australian legal practitioner.

Importantly, despite some complexity, we have legislative provision to depart from Child Support Assessments and whilst an applicant would be in the hands of the discretion of the Court deciding such application, an agreement between parties to depart (by way of the above-mentioned agreements) is a simple and effective way of making private alternate arrangements of child support happen.

If you require legal advice in any family law matter or if you wish to see a children support departure Order, our highly experienced and qualified Family Lawyers at Genesis Edge can help you. Please do not hesitate to contact us on our national Family Law hotline 1300 559 888 or fill out the enquiry form here.