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2.4.12 Minimum annual rate

Context

The minimum annual rate may be payable where the child support formula produces an annual rate below the relevant minimum annual rate, the parent does not have at least regular care of any child in the child support case, and the fixed annual rate of child support does not apply. The minimum annual rate exists to reinforce the principle that all parents must contribute to the financial support of their children.

A parent may apply to have the assessment reduced to nil if their income is less than the amount of the minimum assessment multiplied by the total number of the parent's child support cases.

See 2.4.2 for the current minimum annual rate amount and 2.4.13 for historical amounts.

Act references

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

On this page

What is the minimum annual rate of child support?

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 liability of a parent under this provision is capped at a maximum of 3 times the minimum annual rate (section 66(6)). 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.

The Registrar will not make a minimum annual assessment where the:

  • Registrar could make an assessment under section 65A applying the fixed annual rate (2.4.11) (section 66(2))
  • parent has at least regular care of at least one of the children of the child support case (section 66(1)(a)) - see 2.2.1 for basics of care, or
  • assessment is made in accordance with a change of assessment decision, a court order or a child support agreement (section 66(8)).

The minimum annual rate will apply until either:

  • the end of the child support period (section 66(4)(b)(i))
  • 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)), or
  • the day before a rate is determined in accordance with a change of assessment decision, order or agreement (section 66(8)).

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.

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.

Minimum annual rate - 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 annual rate and shared between all the cases using the formula below, regardless of whether the parent is liable to pay child support in all cases (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 ATI 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 is shared between the carers as follows (section 66(7)):

If … then …
there are 2 or more carers of the children only the carer with the highest percentage of care for the children is entitled to be paid the rate of child support that is payable by the parent.
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 rate of child support that is 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 ATI 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 2021 to 30 November 2022, at the minimum annual rate of $446.

As Praful and Manasa each have the equal highest percentage of care, they are each entitled to be paid $223, 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 ATI below the self-support amount. Michelle has no other child support cases. The liability has been assessed, for the child support period 1 September 2021 to 30 November 2022, at the minimum annual rate of $446.

As Robert has the highest percentage of care, only Robert is entitled to be paid the minimum annual rate of $446.

Example: In 2021, Ramona has been assessed in respect of the costs of children in 4 cases. Ramona receives an income support payment and has an ATI 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 × $446) ÷ 4 = $334.50

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: $334.50 as Thanh and Thao each have the equal highest percentage of care they are entitled to be paid $167.25 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 (CSA Act 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 (CSA Act section 66A).

A parent must satisfy the Registrar that during the nominated period they have very low income, less than the minimum annual rate multiplied by the total number of the parent's child support cases (CSA Act section 66A(2)).

See topic 2.4.11 for more information on the meaning of income.

The information that the parent must provide will depend upon the circumstances of their case and when their application was made. An application may be made during the child support period or after the child support period has ended.

Example: Amanda, who has been assessed in respect of the cost of her child Sam, has been incarcerated since January 2019. For a child support period starting on 16 November 2019, Amanda has been assessed to pay the minimum annual rate. Amanda makes an application to have the minimum annual rate reduced to nil. Amanda advises that she works in the prison and expects to receive about $7 a day (above the basic amenities allowance) in payment or approximately $1,600 annually. As her income is more than the relevant minimum annual rate, the application is refused.

Example: Frank, who has been assessed in respect of the cost of his child Riley, is a resident in a nursing home. For a child support period starting on 7 April 2019, Frank has been assessed to pay the minimum annual rate. Frank makes an application to have the minimum annual rate reduced to nil. Frank advises that he receives a disability support pension and has no other sources of income. He also advises that at least 85% of his pension is paid to the nursing home for his care. As the pension is excluded by section 13 of the CSA Regs, it is not considered income for the purpose of section 66A of the CSA Act. As Frank's income under section 66A of $0 is less than the relevant minimum annual rate, the application is granted.

Example: The landlord of a rental property should be able to show that the property would not have been let if the repairs claimed were not carried out.

Although taxable income is calculated by taking the total amount of deductions away from the total amount of assessable income, the Registrar will consider each individual source to determine the parent's income. Losses from one source will not be deducted from income from another source.

Example: A liable parent has applied for a minimum assessment to be reduced to nil for a child support period starting 1 August 2019. The liable parent has only one child support case and has the following income:

  • Net dividends $200
  • Net interest $80
  • Net distribution from family trust $170
  • Loss from rental property $500

The loss from the rental property is not taken into account in calculating the liable parent's income. Only net income from each source is considered and losses are not offset against other income. The liable parent's income is $450 ($200 + $80 + $170). The liable parent's application for a reduction will not be accepted as their income is more than the minimum annual rate of child support for that period.

Nominated period

In their application a parent must nominate a period for which they are seeking a reduction of the minimum annual rate to nil. This period can be either:

  • the whole of a child support period, if they are assessed at a minimum annual rate for this entire period (CSA Act section 66A(1)(b)(i)), or
  • part of a child support period, if that part is at least 2 months long and they are assessed at a minimum annual rate for the nominated period of time (CSA Act section 66A(1)(b)(ii)).

The parent must provide the Registrar with information on the income that they did or will receive during the nominated period (CSA Act section 66A(2)).

If a parent wants to reduce their assessments for a period of time that includes more than one child support period, they must make an application for each child support period, or each nominated period within a child support period.

Example: Mitch has been assessed at the minimum annual rate since the application for assessment was accepted on 1 February 2019. An assessment was later made for a child support period commencing 1 May 2020. Mitch was not aware of the child support case until August 2020.

Mitch explains that he has been in receipt of a disability support pension since 2018. Mitch can make an application to reduce the minimum annual rate to nil for each child support period, or any relevant nominated period of time.

Decision on application

A parent's application will be granted if the Registrar is satisfied that the parent's annualised income, based on the income for the nominated period, will be less than the amount of the minimum annual rate multiplied by the total number of the parent's child support cases (CSA Act section 66A(2)).

A parent's annualised income is calculated in the following way (CSA Act section 66A(3)):

  • Annualised income = (parent’s income for the nominated period ÷ number of days in the nominated period) × 365

If a reduction is granted, it will apply to the days in the nominated period that are subject to a minimum assessment.

If the Registrar grants an application to reduce the assessment to nil and the minimum assessment was based on an estimate of income (2.5.1), the Registrar is still able to amend or reconcile the estimated income, and the liable parent can make a further estimate of income should their circumstances change.

Example: Dalil, who has been assessed in respect of the cost of the children in 3 cases, becomes unemployed on 7 January 2019. The child support period runs from 1 February 2018 to 30 April 2019. On 17 January 2019, Dalil elects to use an estimate of income to have the assessment reflect his changed circumstances. Dalil advises that he will receive no income for the remainder of the child support period as he is being supported by his partner. After the assessments have been amended, Dalil is assessed to pay the minimum annual rate in 2 of the cases.

Dalil makes an application to have the minimum annual rate reduced to nil. After investigation, the Registrar is satisfied with the income information provided for the nominated period, from 17 January 2019 until the end of the child support period. As the Registrar is satisfied that Dalil's income is less than 3 times the relevant minimum annual rate, the application is granted. The assessment is reduced to nil for the period 17 January 2019 to 30 April 2019.

Example: Fiona has one child support case with a child support period starting 1 September 2018. The assessment is the minimum annual rate. On 1 August 2019 Fiona makes an application for the minimum assessment not to apply. The application is for the period from 1 March 2019 to 22 July 2019 when Fiona was in prison and did not receive any payment other than the basic amenity allowance. The only income Fiona received in that period was $50 in interest income. Fiona has recently been released from prison (on 23 July 2019) and is in receipt of a benefit payment.

In the 144 days between 1 March 2019 and 22 July 2019 Fiona received $50. Fiona's annualised income is $50 ÷ 144 × 365 = $126.74. As Fiona's income is less than one times the relevant minimum annual rate, the application is granted.

If the Registrar refuses to grant an application for a reduction, the unsuccessful applicant must be notified in writing (CSA Act section 66C). That person may choose to object to the particulars of the assessment (4.1.2).

If the other parent disagrees with the Registrar's decision to grant the application, they may object to the particulars of the assessment. If they believe that the assessment does not reflect the liable parent's actual capacity to pay child support, they can apply for a change of assessment (2.6.1).

Amending an assessment if the reasons to reduce the minimum annual rate to nil are no longer satisfied

If after a determination for the minimum annual rate to be reduced to nil has been made, the Registrar may amend the assessment to apply the minimum annual rate, if the parent no longer meets the conditions for the reduction (CSA Act section 66B(b)).

If the parent has met the conditions for the minimum annual rate to be reduced to nil for at least 2 months, the Registrar will amend the assessment from the date:

  • of the change in circumstances that led to CSA Act section 66A no longer being satisfied, if that date can be ascertained, or
  • the Registrar became aware of the change in circumstances that led to CSA Act section 66A no longer being satisfied.

If the requirements of CSA Act section 66A are found to have never been met, or met for less than 2 months, the Registrar will amend the assessment from the date the minimum assessment was first reduced, if CSA Act section 66A was never in fact satisfied.

Example: Greg has one child support case, in which he is assessed to pay the minimum annual rate to Anna for their 2 children. Greg makes an application to reduce the minimum annual rate to nil for the entire child support period. The Registrar is satisfied that Greg's income for the nominated period will be less than the relevant minimum annual rate. The Registrar makes a decision to reduce the assessment to nil.

Three months later, the Registrar becomes aware that Greg is now working part time. As Greg's income is now more than the minimum annual rate, he no longer satisfies the requirements of CSA Act section 66A. The Registrar amends the assessment under CSA Act section 66B to reinstate the minimum annual rate from the date that Greg commenced work.

Example: Mandy has one child support case, in which she is assessed to pay the minimum annual rate to Seth for their 3 children. Mandy makes an application under CSA Act section 66A to reduce the minimum annual rate to nil for the entire child support period. The Registrar is satisfied that Mandy's income for the nominated period will be less than the relevant minimum annual rate. The Registrar makes a decision to reduce the assessment to nil.

One month later, the Registrar becomes aware that Mandy is now working. As Mandy's income was less than the minimum annual rate for less than 2 months, Mandy did not satisfy the requirements of CSA Act section 66A. The Registrar amends the assessment under CSA Act section 66B to reinstate the minimum annual rate from the date the minimum assessment was first reduced.

The Registrar must notify the liable parent in writing that the assessment has been amended and that the minimum annual rate is now payable (CSA Act section 66C). The parent can then object to the particulars of the assessment (4.1.2).

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