2.2.6 Formula 5 - assessments using the income of only one parent
Context
Formula 5 is used where a non-parent carer applies for a child support assessment (1.1.C.70), and only one parent's (1.1.P.10) income will be used to calculate child support (1.1.C.60) because the other parent:
- is a resident of a non-reciprocating jurisdiction (1.5.1)
- is not being assessed because of special circumstances.
Formula 5 uses the income of only one parent, but recognises that the child has 2 parents by doubling the income of the parent to calculate the COTC (1.1.C.210). The costs are then halved to identify the amount to be paid by the assessed parent.
Act reference
CSA Act section 39, section 41, section 49, section 55C
On this page
When is Formula 5 used?
One parent is a resident of a non-reciprocating jurisdiction
Formula 5 is used when a non-parent carer has applied for child support to be assessed and one of the parents is neither a resident of Australia (1.6.1) (1.1.R.100) nor a resident of a reciprocating jurisdiction (1.5.1) (1.1.R.90). Where the residence status of the parents has been considered, and this residency decision has been made and the application has been accepted (2.1.5) a non-resident parent cannot be assessed for child support. This means that the income of that parent is not part of the calculation of the assessment.
Special circumstances
Formula 5 may be used when a non-parent carer has applied for child support to be assessed on the basis that special circumstances (2.1.1) exist that make it inappropriate for a parent to be assessed for child support. In making a decision on the application, the Registrar will consider the facts to determine if special circumstances do exist. If the Registrar does accept the application, then Formula 5 is used to calculate the liability of the other parent.
Formula 5 methodology
The use of only one parent's income means that not all of the steps of the basic formula are required, and that some different calculations are made.
| Step | Action | More detail |
|---|---|---|
| 1 | Work out the parent's child support income and double that income. | 1.1.C.120 Child support income |
| 2 | Work out the parent's percentage of care for the child. | 1.1.C.20 Care percentage |
| 3 | Work out the parent's cost percentage for the child. | 1.1.C.200 Cost percentage |
| 4 | Work out the COTC using the income from Step 1, by using either: | 1.1.C.210 Costs of the child |
| 5 | Work out the following rate:
| 1.1.C.210 Costs of the child |
| 6 | If the parent is not assessed to pay child support for a child in another case, the annual rate of child support payable is the rate worked out under Step 5. | - |
| 7 (if applicable) | If the parent is assessed to pay child support for a child who is in another child support case, work out the parent's multi-case cap. | 1.1.M.40 Multi-case cap |
| 8 | The annual rate of child support payable for the child is the lower of the annual rate calculated at Step 5, or the multi-case cap calculated at Step 7. | 1.1.M.40 Multi-case cap |
| 9 | If there is only one non-parent carer, the parent must pay the annual rate of child support that is payable for the child to the non-parent carer. | - |
If there are 2 non-parent carers who each have a percentage of care for the child, and they have both applied for child support, the parent must pay the annual rate of child support payable for the child to the non-parent carers as follows:
- Total amount which non-parent carers are entitled to be paid × (Non-parent carer's cost percentage for the child ÷ Total of non-parent carers' cost percentages for the child).