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 65A, section 66, section 66A, section 116, section 153A, section 155

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 section 66(5) of the CSA Act. 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 CPI 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:

  • the parent has at least regular care of at least one of the children of the child support case (section 66(1)(a))
  • the assessment is made in accordance with a determination made under Part 6A (a change of assessment decision) (section 66(8)(a))
  • the assessment is made in accordance with a court order under Division 4 of Part 7 (a departure order) (section 66(8)(b)), or
  • the assessment is made in accordance with provisions of a child support agreement accepted under Part 6 (section 66(8)(c)).

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 either:

  • the end of the child support period (section 66(4)(b)(i)), or
  • 28 days after the last day on which the person would otherwise have been assessed to pay less than the minimum rate, even if that day is after the end of the child support period (section 66(4)(b)(ii)).

Example: Anjali has been assessed to pay child support at the minimum annual rate in the child support period 1 September 2017 to 30 November 2018.

Anjali's income does not change during this time. She continues to be assessed to pay child support at the minimum annual rate until 30 November 2018. A new child support period begins on 1 December 2018, and she will be re-assessed for the new child support period.

Example: Aaron has been assessed to pay child support for the child support period 1 March 2018 to 30 June 2019. On 1 September 2018, Aaron lodges an income estimate of $0 and he is assessed to pay child support at the minimum annual rate from this date.

On 10 June 2019, Aaron starts work and updates his income estimate to $40,000. Based on this income, child support would be calculated at a rate higher than the minimum annual rate.

Aaron is still assessed to pay the minimum annual rate until 8 July 2019, which is 28 days after the minimum rate would otherwise cease to be payable even though that day is after the end of the child support period.

As noted above, the minimum annual rate cannot be applied under section 66 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: Nhung has been assessed to pay child support at the minimum annual rate in the child support period 1 August 2016 to 31 October 2017.

A court order sets a higher annual rate to be payable from 1 March 2017. The minimum annual rate will cease to be payable from 28 February 2017, the day before the higher rate is payable.

A change of assessment decision, a court order or a child support agreement can set the annual rate of child support to an amount equivalent to the minimum annual rate.

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, 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, regardless of whether the parent is liable to pay child support in all cases. 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 costs 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 2017, Eric has been assessed in respect of the costs of children in 4 cases. Eric receives an income support payment and has an adjusted taxable income below the self-support amount.

Assessment 1: Eric is assessed to pay child support to Srishti for one child. The assessment is varied by a court order which sets an annual rate of $260.

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

Assessment 3: Eric is assessed to receive child support from Alice for one child.

Assessment 4: Eric is assessed to pay child support to Yixiao 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 × $420 ÷ 4) = $315

Therefore, Eric is required to pay the following amounts:

  • Assessment 1: $260 as required by the court order
  • Assessment 2: Nil as Eric has more than regular care of a child
  • Assessment 3: Nil as Eric is entitled to receive child support
  • Assessment 4: $315 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 one or more non-parent carers, or between 2 or more non-parent carers, then the minimum annual rate payment is shared between the carers as follows (section 66(7)):

If … then …
2 or more carers have an equal percentage of care of the children, and that percentage is the highest percentage of care of the children each person is entitled to receive an equal proportion 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: Sonicka and Praful have one child William, who lives one week with Praful and the alternative week with Sonicka's mother Manasa. Praful and Manasa each have a care percentage of 50%. Manasa has applied for an assessment of child support for William.

Sonicka receives an income support payment and has an adjusted taxable income below the self-support amount. Sonicka has no other child support cases. Sonicka'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 Praful and Manasa each have the equal highest percentage of care, they are each entitled to be paid $180, half of the minimum annual rate.

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

Michelle receives an income support payment and has an adjusted taxable income below the self-support amount. Michelle 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 Robert has the highest percentage of care, only Robert is entitled to be paid the minimum annual rate of $360.

Example: In 2015, Ramona has been assessed in respect of the costs of children in 4 cases. Ramona receives an income support payment and has an adjusted taxable income below the self-support amount.

Assessment 1: Ramona is assessed to pay child support to Albert for one child. The assessment is varied by a court order which sets an annual rate of $260.

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

Assessment 3: Ramona is assessed to receive child support from Rashid for one child.

Assessment 4: Ramona is assessed to pay child support for 2 children who live one week with Thanh and the alternative week with Thanh's mother Thao. Thanh and Thao 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, Ramona is required to pay the following annual amounts:

  • Assessment 1: $260 as required by the court order
  • Assessment 2: Nil as Ramona has more than regular care of a child
  • Assessment 3: Nil as Ramona is entitled to receive child support
  • Assessment 4: $306 - as Thanh and Thao each have the equal highest percentage of care they are 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: 11 November 2019