Centrelink and Child Support

Centrelink and Child Support

When you separate from the other parent, you may need to attend upon Centrelink to find out if you are eligible for any governments benefits, such as a Parenting Payment, or the Child Care Subsidy,  Newstart Allowance, Health Care Card, Family Tax Benefit.

Centrelink may refer you to the Child Support branch of the Department of Human Services and ask you to obtain a child support assessment.

Prior to doing that, a Child Support Estimator is available online for you to calculate an estimate of your child support payments. You will need to estimate the income for each parent, in addition to the time spent by each parent with the child/children.

Child support is a payment made by a parent to the other to help with the cost of looking after the child/children. It is important to understand that child support is not maintenance to look after the other parent; that type of payment is called “spousal maintenance”.

Sometimes it is easier to negotiate with the other parent once you know what the correct child support amount is supposed to be paid. Just because an assessment has occurred, doesn’t mean the agency will collect the money from the parent who has to pay; there can be a private collect arrangement made between the two of you.

A private arrangement can be a verbal agreement, or you can have the terms set out within a Binding Child Support Agreement. You must get legal advice before you enter into a Binding Child Support Agreement so that you understand what each parent is responsible for paying. To get child support under a binding agreement a parent must have at least 35% care of a child. Be mindful that any child support you receive can affect your Family Tax Benefit.

You can agree to include many things in an agreement, such as private school fees, uniforms, before/after school care, extracurricular or sporting activities, private health insurance/excess. 

Child Maintenance Trusts (“CMT”) can be very useful in circumstances where an asset is transferred into a CMT to generate income which is then distributed to the child. It is a useful mechanism because the distribution to the child is not subject to the penalty rate of tax that would normally apply. A person contemplating a CMT would firstly need to obtain financial advice from their accountant and/or financial advisor.

If you would like assistance please call us on 4758 5656 to make an appointment for a special fixed fee price of $275.




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