2.4.12 The Minimum Annual Rate of Child Support

Context

Where a child support formula produces an annual rate below the relevant minimum annual rate, and the fixed annual rate of child support does not apply, a minimum assessment will generally be payable.

Act references

CSA Act section 5, section 7B, section 65A, section 66, section 66A, section 66B, section 66C, section 116, section 153A, section 155

CSA Regs regulation 7D

On this page

What is the minimum annual rate of child support?

A minimum annual rate of child support of $320 per case is prescribed in the CSA Act (section 66(5)). The liability of a parent under this provision is capped at a maximum of 3 times the minimum annual rate (section 66(6)).

The annual rate is indexed each calendar year to the Consumer Price Index using the following formula (section 153A):

  • $320 × (Highest September quarter index number / 2005 September quarter index number)

The highest index number for a September quarter since the September 2005 quarter will usually be the figure for the most recent September quarter.

The indexed minimum annual rate for a calendar year applies to child support periods starting within the calendar year. The current minimum annual rate is included in the basic values table in 2.4.2 together with previous year's figures.

The Registrar has to publish the minimum annual rate of child support for the next year in the Australian Government Gazette before the end of each calendar year (section 155).

When does the minimum annual rate apply?

In most cases a parent liable to pay child support in a case is required to pay at least a minimum annual rate of child support (section 66).

The minimum annual rate does not apply where (sections 66(1) and 66(8)):

  • the parent has at least regular care of at least one of the children of the child support case,
  • the assessment is made in accordance with a determination made under Part 6A (a change of assessment decision),
  • the assessment is made in accordance with a court order under Division 4 of Part 7 (a departure order), or
  • the assessment is made in accordance with provisions of a child support agreement accepted under Part 6.

The minimum annual rate does not apply if the Registrar could make an assessment under section 65A applying the fixed annual rate of child support. However, if the Registrar has made a determination under section 65B that section 65A does not apply then the Registrar can make a minimum annual rate assessment (section 66(2)).

The minimum annual rate will apply until the end of the child support period (section 66(4)(b)(i)), or until 28 days after the day on which the person would cease to be assessed to pay the minimum rate, even if that day is after the end of the child support period (section 66(4)(b)(ii)).

Example: M has been assessed to pay child support at the minimum annual rate, based on an income estimate for a year of income in the child support period 1 September 2010 to 30 June 2011.

M starts work on 1 March 2011 and lodges a later income estimate on that day. Child support is now payable at a rate higher than the minimum annual rate. The higher rate will be payable from 29 March 2011, 28 days after the minimum rate would otherwise cease to be payable.

Example: M has been assessed to pay child support at the minimum annual rate, based on an estimate of income, for the child support period 1 September 2008 to 30 November 2009.

M starts work on 12 November 2009 and lodges a new estimate on that day. Child support is now payable at a rate higher than the minimum annual rate. The higher rate will be payable from 10 December 2009, 28 days after the minimum rate would otherwise cease to be payable even if that day is after the end of the child support period.

As noted above, the minimum annual rate does not apply where the assessment is made in accordance with a change of assessment decision, a court order or a child support agreement. Therefore the minimum annual rate will cease to apply the day before a rate is determined in accordance with a change of assessment decision, order or agreement.

Example: M has been assessed to pay child support at the minimum annual rate, based on an income estimate for a year of income in the child support period 1 September 2010 to 30 June 2011.

A departure order sets a higher annual rate to be payable from 1 March 2011. The minimum annual rate will cease to be payable from 28 February 2011, the day before the higher rate is payable.

How the annual rate is calculated where a parent has more than 3 cases

If a parent is assessed for child support for more than 3 cases then the total amount payable is capped at 3 times the minimum rate (section 66(6)) and shared between all the cases using the formula below. It is the fact that the parent has been assessed in more than 3 cases that is relevant. The parent may not be liable to pay child support in all cases, due to the care or income information used in each individual case. The minimum annual rate amount payable for each case is calculated according to the following formula (section 66(6)):

  • Annual rate for each case = (3 × minimum annual rate ÷ Total number of the parent's child support cases)

The total number of cases includes all cases where the parent has been assessed in respect of the cost of the children. This includes cases where the liability has been determined in another way, such as in accordance with the provisions of an order or agreement.

Example: As at 7 December 2008, F has been assessed in respect of the cost of the children in 4 cases. F receives an income support payment and has an adjusted taxable income below the self-support amount.

Assessment 1 F is assessed to pay child support to A for one child. The assessment is varied by a court order which has an annual rate of $260.

Assessment 2 F is assessed in respect of the costs of 3 children. F and B share the care of one child and have sole care of one child each.

Assessment 3 F is assessed to receive child support from C for one child.

Assessment 4 F is assessed to pay D child support for 2 children.

The amount payable for each case where the minimum annual rate is applicable is determined using the formula in section 66(6):

  • Annual rate for each case = (3 × 339 ÷ 4) = 254

Therefore F is required to pay the following amounts:

Assessment 1 $260 as required by the court order

Assessment 2 Nil as F has more than regular care of a child

Assessment 3 Nil as F is entitled to receive child support

Assessment 4 $254 as a minimum rate assessment

Paying the minimum annual rate for a case to more than one person

If the care of the children in a case is divided between a parent carer and a non-parent carer, or between 2 non-parent carers, then the minimum annual rate payment is shared between the carers as follows (section 66(7)):

  • If 2 carers have an equal percentage of care of the children, and that percentage is the highest percentage of care for the children, then each person is entitled to receive half of the amount that is payable by the parent
  • Otherwise, only the carer with the highest percentage of care for the children is entitled to be paid the minimum annual rate of child support payable by the parent.

Example: M and F have one child A who lives one week with F and the alternative week with M's mother G. F and G each have a percentage of care of 50%. G has applied for an assessment of child support for A.

M receives an income support payment and has an adjusted taxable income below the self-support amount. M has no other child support cases. M's liability has been assessed, for the child support period 1 September 2010 to 30 November 2011, at the minimum annual rate of $360.

As F and G each have the equal highest percentage of care they are each entitled to be paid $180, half of the minimum annual rate.

Example: M and F have one child A, who lives one week with F and the alternative week with M's mother G. A spends some of the school holidays with M rather than with G. F has a percentage of care of 50%, G has a percentage of care of 40% and M has a care percentage of 10%. G has applied for an assessment of child support for A.

M receives an income support payment and has an adjusted taxable income below the self-support amount. M has no other child support cases. The liability has been assessed, for the child support period 1 September 2010 to 30 November 2011, at the minimum annual rate of $360.

As F has the highest percentage of care, only F is entitled to be paid the minimum annual rate of $360.

Example: F has been assessed in respect of the cost of the children in 4 cases. F receives an income support payment and has an adjusted taxable income below the self-support amount.

Assessment 1 F is assessed to pay child support to A for one child. The assessment is varied by a court order which has an annual rate of $260.

Assessment 2 F is assessed in respect of the costs of 3 children. F and B share the care of one child and have sole care of one child each.

Assessment 3 F is assessed to receive child support from C for one child.

Assessment 4 F is assessed to pay child support for 2 children who live one week with M and the alternative week with M's mother G. M and G each have a percentage of care of 50%.

The amount payable for each case where the minimum annual rate is applicable is determined using the formula in section 66(6):

  • Annual rate for each case = (3 × 408 ÷ 4) = 306

Therefore F is required to pay the following amounts:

Assessment 1 $260 as required by the court order

Assessment 2 Nil as F has more than regular care of a child

Assessment 3 Nil as F is entitled to receive child support

Assessment 4 $306 - M and G each have the equal highest percentage of care they are each entitled to be paid $153 each, half of the portion of minimum annual rate payable.

When can a minimum assessment be reduced to nil?

A parent can apply directly to a court for a departure order (section 116(1)(c)) or can apply to the Registrar to have the minimum annual rate reduced to nil for a particular child support period (section 66A). See 2.5.4 on applying to have the minimum annual rate of child support reduced to nil.

Last reviewed: 20 March 2015