Reducing and Avoiding Child Support Obligations

Child support in Australia acts to ensure that both parents provide financial support to their children, irrespective of the relationship between the parents. Governed by the Child Support (Assessment) Act 1989, child support is a legal obligation, and avoiding legitimate demands without valid grounds can result in penalties and enforcement actions. However, when the circumstances warrant, there are lawful avenues to challenge assessments. This article explores the legal and ethical methods for reducing or avoiding child support obligations in Australia, with a view to compliance with the law and the best interests of the child.

Legal basis of child support

The Australian system operates on the principle that both parents (whether biological or adopted) share equal responsibility for meeting their child’s financial needs. Although the responsibility is equally shared, this does not mean that both parents are expected to outlay the exact same dollar amount. The Department of Human Services (DHS) (also known as Services Australia) administers assessments using a formula that considers:

1. each parent’s adjusted taxable income,
2. the cost of raising the child, and
3. the amount of time the child lives with each parent (percentage of care).

While it is rarely possible for a parent to entirely avoid paying, there are legal strategies to reduce the amount if the assessment is calculated incorrectly.

Applying for a change of assessment

A parent can apply to Services Australia for a Change of Assessment in Special Circumstances. This application must provide detailed evidence of the grounds for reassessment, such as tax returns and financial statements, evidence of care arrangements (such as parenting plans or school records), and documentation of special expenses, such as medical bills or travel costs.

In complex or contentious cases, a parent can apply to the Federal Circuit and Family Court of Australia (FCFCOA) for child support orders. The court has broad discretion to consider whether the assessment aligns with the best interests of the child, and can vary child support assessments based on income, care arrangements, or special circumstances.

Grounds for challenging child support calculations

Common grounds for challenge calculations include:

Income assessment

If the income that is used in the assessment is outdated or incorrect, the parent can provide evidence of their current financial situation. Because the formula is based on each parent’s adjusted taxable income, a means to lawfully reduce payments is to reduce taxable income by strategies such as:

• Salary sacrificing
• Business deductions
• Negative gearing

However, it is important for parents to remember that the Child Support Registrar has powers to investigate income minimisation schemes and can readjust an assessment if a parent unreasonably reduces their income to avoid payments.

Change in care arrangements

A parent should notify Services Australia if they provide a higher percentage of care than was considered in the original assessment, as this is likely to reduce the amount of child support payable. Of course, altering care arrangements requires either the cooperation of the other parent or court intervention. The court will only modify care arrangements if doing so serves the best interests of the child. It is unlikely to be influenced by arguments based solely on a parent’s desire to lower their child support obligations.   

Offsets and special circumstances

A parent may be able to reduce the liability to pay child support on the basis that they have other dependants relying on their financial support. If a parent has other children, for instance, they may seek an adjustment to reflect these additional responsibilities.

A parent may also apply to reduce liability because they provide substantial additional support to their child, such as by paying school fees or insurance, which may be offset against child support that would otherwise be paid to the other parent.

In rare cases, the special circumstances of a case may justify a reduced amount. For instance, if one parent incurs higher costs to maintain contact with their child, this may justify a reassessment, especially in cases when the additional costs are incurred due to the preference of the other parent. However, it is important to remember that the general financial hardship of a parent does not justify avoiding child support. While reduced income may warrant a reduction in payments, there is a community expectation that parents will prioritise the financial support of their children above other expenses.

Private agreements

Not all parents pay through Services Australia. Many parents prefer a private agreement between themselves about how much each parent should contribute towards raising their child. Formalised private arrangements that provide additional structure to the agreement are known as:

• Binding Child Support Agreements (BCSAs)
• Limited Child Support Agreements (LCSAs)

While it is rarely possible for a parent to entirely avoid paying, Australian law provides several avenues for reducing or challenging obligations when justified by circumstances. Parents can challenge assessments, negotiate care arrangements, and seek exemptions to lawfully avoid child support. Ultimately, however, the child’s best interests must remain the guiding principle in all matters. Parents seeking to modify their obligations should engage with the process transparently and consult Go To Court Lawyers on 1300 636 846 to ensure compliance with the law while achieving fair and reasonable outcomes.