Topic 9: Child Maintenance

TOPIC 10: CHILD MAINTENANCE

PRELIMINARY MATTERS There are two schemes for child maintenance in Australia:  discretionary scheme: FLA  formula scheme: CSAA

(1) CHILD MAINTENANCE UNDER PT VII DIV 7 FAMILY LAW ACT 1975 (a) parental duty to maintain children: s s66B, 66C (b) relationship with the Child Support (Assessment) Act 1989: s 66E (c) who may apply for an order: s 66F (d) court's power to make an order: s 66G (e) relevant considerations: ss 66H, 66J, 66K (f) children aged over 18 years: s 66L (g) general powers of the court: s 66P (h) urgent orders: s 66Q (i) specification in orders: s 66R (k) cessation of order: ss 66T, 66U, 66V, 66VA

(a) Parental Duty to Maintain Children  parental liability: s 66C  three rules: s 66C(2)(a)(b)(c)  step-parent liability: s 66D  step-parent criteria: s 66M

Keltie v Keltie and Bradford [2002] FLC 93-106 - step-parent Tobin v Tobin [1999] FLC 92-848 – foster parent

(b) Relationship with the Child Support (Assessment) Act 1989

 prohibition: s 66E (*except overseas orders etc)

(c) Who May Apply for an Order?  parents, child, grandparent, 'concerned person': s 66F(1)  note ‘care’ children: s 66F(2)  Australian jurisdiction: s 69E

(d) Court’s power to make an order  may … as it thinks proper: s 66G  but note s 66P

(e) Relevant Considerations  approach: s 66H (needs and means analysis)

W and W [1980] FLC 90-872 Tuck and Tuck [1981] FLC 91-021 Mee and Ferguson [1986] FLC 91-716 Ganter v Grimshaw [1998] FLC 92-810

 need factors: s 66J Specific factors Lovering Basket of Goods Approach (1983) Lee Expenditure Survey Approach (1989)

Coon and Cox [1994] FLC 92-464 Streets and Streets [1994] FLC 92-509  means factors: s 66K resources less commitments special circumstances disregard social security

(f) Children Aged Over 18 Years  prohibition?: s 66L  exceptions: complete education and/or mental/physical disability  also note s 66VA

O’Dempsey and O’Dempsey [1990] FLC 92-178 Cosgrove v Cosgrove [1996] FLC 92-700; No. 2 [1996] FLC 92-701 FM v FM [1997] FLC 92-738 Re AM (Adult Child Maintenance) (2006) FLC 93-262

(g) General Powers  refer s 66P (menu is like s 80)

(h) Urgent orders  immediate need: s 66Q

(i) Specification in Orders  identify child maintenance component: s 66R

(j) Modification of Orders  66S applies whether order made by court or registered by court  Order can be discharged, suspended, revived or varied: s 66S(2)  Can also be modified by consent of all parties  modification grounds change in circumstances: s 66S(3)(a) CPI: s 66S(3)(b) consent order not proper: s 66S(3)(c) material fact(s) withheld: s 66S(3)(d)  Subdivision EA: Varying the Maintenance of Certain Children: s 66SA

(k) Cessation of Order  turning 18: s 66T  death: s 66U  change in circumstances: s 66VA  adoption etc: s 66V

(l) Parenting Plans  refer Topic 5 (and note ss 63CAA, 63G)

(2) CHILD SUPPORT (REGISTRATION AND COLLECTION) ACT 1988  court proceedings were needed  quantum $ ordered by courts was low  ‘dead beat dads/moms’  tax change in the 1980’s  social security blowout  'no child will live in poverty by 1990' pledge!  scheme introduced in two stages: 1988 and 1989

Deputy Child Support Registrar v Harrison [1996] FLC 92-656

(a) Child Support Agency  Stage 1  commenced 1 June 1988  Australian Taxation Office (now within Department of Human Services)

(b) Registration of Maintenance Liabilities  Child and spousal maintenance orders must be registered: ss 17, 18  effect of registration: s 30 debt due to Commonwealth  can payee enforce? (yes since 2007 see s113A, s113 registrar enforces)  Opting out for private collection? sis 38A-38B

(c) Collection of Maintenance Liabilities  Automatic withholding: s 43  can ‘opt out’: s 44  employer’s obligations: sis 45-6

(d) Payment and Recovery of Child Support Debts

 penalties: sis 66-69  deductions from payer’s social security: s 72AA

 transactions to defeat liabilities: s 72C

 registrar may sue: s 113  enforcement: Family Law Rules

(e) Departure Prohibition orders . Pt V Divs 1-7 (ss 72D-72W)

(f) International Collection . Child Support (Registration And Collection) (Overseas-Related Maintenance Obligations) Regulations 2000 - now repealed see s124 this Act applies to orders made in foreign countries registered in court . s 124A – may make Regulations in relation to overseas-related maintenance obligations . see Child Support (Registration and Collection) Regulations , re 3A recricopating jurisdictions

(3) CHILD SUPPORT AND (ASSESSMENT) ACT 1989  Stage 2  commenced 1 October 1989  major changes introduced on 1 July 1999  assessment by formula (and by reference to taxable income and prescribed amounts)  new formula commences 1 July 2008  only concerned with ‘means’ (need is assumed)  see http://www.csa.gov.au/guide/index.htm

Gyselman and Gyselman [1992] FLC 92-279 Bolton and Bolton [1992] FLC 92-309 Best and Best [1993] FLC 92-418 Reid v Reid [1999] FLC 98-007

(a) Eligible Children  born on/after 1.10.89 (or full sibling born on/after that date) (relevant where parents never cohabit)  (or more commonly) where parents ‘separated’ on/after 1.10.89

(b) Applications for Support  parents may apply: s 25  non-parent carer application: s 25A  child cannot apply  child welfare children? s 26A  see s 24 (a)- relevant child must be  eligible  under 18 years  not ‘a member of a couple’  jurisdictional connection to Australia: s24[b) child present in Australia on day of application child Australian citizen or ordinarily resident in Australia on that day. Parent resident reciprocating jurisdiction

(c) Administrative Assessment of Child Support  what is the procedure? - apply to Registrar: s 27  what is a child support period? - refer s 7A(1)  when does a child support period start? - refer s 7A(2)  when does a child support period end? - refer s 7A(3)  examples? - refer s 7A(4)-7A(8)  new (basic) statutory formula (see below)  can a payer seek an adjustment to his/her child support income? - yes, see ss 60-64A  when does a statutory liability cease? - refer ss 12, 31

‘Basic Child Support Figures 2008’ (for formula up to 30 June 2008)

Income cap: 2.5 times EAWE - $113,362.50

Exempt income: 110% unpartnered rate $13,980.20 and no relevant dependent child $15,378.22 220% partnered rate of pension $11,676.60 with relevant dependent child $25,688.52 PLUS < 13, at end - $2,570 13-15, at end - $3,705 16 or over, at end – NK (in 2006 was $5,307)

Disregarded income: Yearly equivalent EAWE - $45,505

Minimum annual rate of child support: $339

‘Tom and Meng’ example January 2008 (Parkinson Taskforce example using the current ‘basic’ formula that applies until 30 June 2008 and using 2008 figures)

Facts: ‘Tom and Meng’ example is from the Parkinson Child Support Taskforce  3 kids all under 12  Care arrangements – Tom 25% Meng 75%  CS $Y – Tom: $51,500 Meng: $27,000  Exempted $ for Tom: $15,378.22

CS% (3/32% multiplied by the following equation: ($51,500.00) LESS [($15,378.22) + ($0)] - ie 32% of $36,121.78 = $11,558.97

Liable parents $Y cap and carer’s $Y level are lower and hence irrelevant

New Formula 2008

New formula new Pt 5 CSAA  Parental income is now combined after self support deduction new Divs 1-3 CSAA  Children’s costs calculated by reference to combined parental income (two age bands 0-12, 13+; max 3 children new Div 6 CSAA  Parent’s shares of costs are allocated according to their respective proportion of total parental income after allowing for their actual care (>14%) that they have new Divs 4-5 CSAA Cost percentages Item Column 1 % of care Column 2 Cost % 1 0 to less than 14% Nil 2 14% to less than 35% 24% 3 35% to less than 48% 25% plus 2% for each percentage point over 35% 4 48% to 52% 50% 5 more than 52% to 65% 51% plus 2% for each percentage point over 53% 6 more than 65% to 86% 76% 7 more than 86% to 100% 100%

 This produces a CS% which is applied to the costs of the child

The new formula looks something like this:

I T C (parents combined child support income) (costs of children) (costs of care already met) %↓ ↓ ↓% $ (child support payable)

I Combined parent’s Child Support Income Amount (CSIA = Adjusted Taxable Income – Self Support Amount) T Costs of children based on variables (ie according to I + number and ages of children) C Percentage costs already met by virtue of care arrangements (% of time for each parent)

$ [Dad’s IT% - C%] + [Mum’s IT% - C%]

Tom and Meng July 2008 (Parkinson Taskforce example using new formula and using figures applicable in 2008)

Facts: ‘Tom and Meng’ example is from the Parkinson Child Support Taskforce  3 kids all under 12  Care arrangements – Tom 25% Meng 75%  CS $Y – Tom: $51,500 Meng: $27,000

Relevant Self Support figure: $18,252 (1/3 of the ‘MTAWE’)

I $41,996 (Tom’s CSIA is $33,248 + Meng’s CSIA is $8,748) (ie Tom’s CSIA% is 79.16% and Meng’s % is 20.83%) T $11,192.68 (based on the ‘Table of Costs’ used by the Taskforce) C Care – Tom 25% (24%) and Meng 75% (76%)

$ [Tom 55.86% (79.16%-24%)] + [Meng 0% (20.86%-76%] Tom pays Meng $6,252.23 ($11,192.68 x 55.86%)

Note: Meng does get to keep all the Family Tax Benefit ‘FTB’ (estimated at around $6,184.36 whereas it was previously split between Tom and Meng because he has more than 10% care). cf. CC Calculator (as at 30 June 2008) Child Support Estimate: $515 per month Annually: $6174 Weekly: $118

(d) Child Support Agreements  agreements are encouraged - refer s 4(3)(a) and Part 6 in particular Div 2  what is included in an agreement? - refer s 84(1)  formalities? - refer s 85 (a written signed agreement is required)  procedure for acceptance by registrar? - refer Div 3  decisions on agreement applications? - refer Div 4  variation of agreements? - refer ss 97-98, 136

(e) Departure from Administrative Assessment (and role of SSAT)  review by agency: s 98B  circumstances: s 98C (like s 117) – ’10 reasons’ see: http://www.csa.gov.au/payer/coa.aspx  registrar may initiate: ss 98K-98RA  determinations that may be made: s 98S  objection procedure and AAT review of certain decisions: see Part 6B

CSA’s ’10 reasons’ Reasons about the children . 1: costs applicant more than 5% of his/her CS income amount to have contact . 2: costs the applicant extra to cover the children's special needs . 3: costs the applicant extra to care for, educate or train the children in the way they intended . 4: CS assessment does not take into account the income, earning capacity etc of the children . 5: Children, payee or someone else has (or will) received money, goods or property from you for the benefit of the children . 6 (payee only): If other parent has sole care of children, and it costs them more than 5 per cent of his/her CS income amount for child care, for children younger than 12 years of age at the start of the CS period. Reasons about the parents . 7: applicant has necessary expenses in supporting him/herself that affects ability to support the children . 8: CS assessment does not take into account the income, earning capacity etc, of one/both parents . Reasons about a duty to maintain . 9: applicant has a legal duty to maintain another person or other children not included in CS assessment, and it costs them:  more than 5 per cent of his/her CS income to have contact with that other person or those children  extra to cover the special needs of that person or those children  extra to cover the necessary expenses of that person or those children. Reasons about additional income for resident children . 10: applicant has earned additional income for the benefit of resident children.

Role of SSAT?

(f) Jurisdiction of Courts: Part 7 CSAA  Family Court/Fed Mag Court: ss 99-105  retains some jurisdiction including parentage declarations, applications for a ‘change of assessment’ for a period more than 18 months prior to the date of application, stay orders, enforcement matters sought by the payee, setting aside a child support agreement  Declaration person entitled to admin assessment (eg eligible carer etc): s 106  Declaration as to liable parent: s 106A  Declaration person NOT entitled to admin assessment (eg not a liable parent): s 107  Power to order the recovery of amounts wrongly paid under the CSAA: s 143(1)-(3A): Where s 107 declaration made court may determine the amount that is to be recovered: s 143(3A). In doing so, the court must have regard to various matters in s 143(3B)  Issue of deceit? Magill v Magill [2006] HCA 51 (Gleeson CJ, Gummow, Kirby, Hayne, Heydon and Crennan JJ) – ‘majority’ (Gummow, Kirby and Crennan JJ) held that marital representations as to children’s paternity could not give rise to an action in deceit. However, they accepted that a party could seek an order for the repayment of any sums wrongly paid by way of child support (see above) or child maintenance (FLA s 66X) (g) Orders for Non-Periodic Child Support: Part 7 Div 5 (ss 121-131)

(h) Urgent Orders: Part 7 Div 6 (ss 139-140)