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Child support paid by separated parents to drop

The overall amount of child support paid by separated parents may decrease from July 1, when a new child support formula kicks in.

The Courier-Mail
4 March 2008

Child support paid by separated parents to drop
By Margaret Wenham

The overall amount of child support paid by separated parents is likely to fall from July 1, when a new child support formula kicks in.

However, according to Child Support Agency deputy general manager Trevor Sutton, most residential parents whose payments fall will be compensated through the Federal Government's family tax benefit scheme.

Mr Sutton said that while the agency was not "completely sure", it was anticipated there would be a reduction in the amount of child support paid overall.

"If they (residential parents) get less child support, in most cases they'll get more family tax benefit," he said.

Either way, from today and over the next 10 days, 1.5 million Australian parents - payers and payees - will get their new assessments from the CSA based on the new formula.

Mr Sutton said it was vital that people contacted the agency to clarify or correct information in their new assessments, which will take effect from July 1.

He said the new formula had a number of key design elements that differentiated it from the old one.

These included incorporating the cost of raising children, treating residential and non-residential parents' incomes and living costs more equally and recognising the costs of a non-residential parent having care of their child or children for as little as one night a week.

The change - the last in a tranche of changes made to the child support system since mid-2006 following a Federal House of Representatives taskforce report - also means people who fail to justify very low taxable incomes are assessed at a new $20 a week per child minimum.

Those on very low incomes who get government benefits will pay the "true minimum" of $6 a week.

In 2006-07, nearly $2.7 billion was assessed to support about 1.2 million children Australia-wide.

In Queensland there were 159,714 child support paying parents, with 159,147 parents receiving child support for 247,000 children.

Around 48 per cent of the 1.5 million separated parents make their own arrangements for the payment and collection of child support using the CSA's formula.

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Does that mean they are putting family benefits UP or that payments will increase as a result of lower maintenance payments?  There is one topic on the forums here where we compared the effect maintenance had on family benefits and it made no difference (i.e. benefits didn't decrease as maintenance increased).

When you are swimming down a creek and an eel bites your cheek, that's a Moray.
I believe this is already done Jazdia.

When with my X her previous husband's wage increased he was deemed as paying more CS.

The reason, it was discovered, was because FTB actually went down because of increase; so a possible suggestion is simple compensation for some who's CS is reduced.

The new legislation curtails the non-resident parent, with less than 35% (128 nights) care (used to be 10% care) claiming their share of the FTB. 35% is perhaps the most significant care threshold now.

For this aspect and another, that is that above 65% care, a parent is assumed to pay nil.

One scenario I tried at the weekend would have the primary care fork out nearly $5000 to the non-resident parent (single child under 13, $110,000 ati for primary carer and $37,500 for non-resident parent) at 128 nights, but $0 at 127 nights.

This actually highlighted a bug in the calculator, which has now been fixed (my assumption was that a primary carer wouldn't ever pay).
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