# 2.4.6 The costs of the child

## Context

The costs of a child are determined by the parents' incomes, the number of children and the age of the children. The costs are calculated using the Costs of the Children Table. The child support formulas then determine how these costs will be met.

## Act references

CSA Act section 5, section 46, section 47, section 55E to section 55HA, Schedule 1

## The Costs of the Children Table

The Costs of the Children Table is updated annually. A new table is published for each calendar year, to be used in making assessments for child support periods that start in that year. The costs are indexed to the MTAWE figure (section 155). The Costs of the Children Table for each year from the 2007 calendar year is included at 2.4.2.

The Costs of the Children Table identifies the costs of the children based on the parents' combined child support income (for most formulas), the parent's child support income (when the income of only 1 parent is used) or a parent's initial child support income (for relevant dependent child amount and multi-case allowance calculations).

The Costs of the Children Table is used to calculate the:

The table is located at CSA Act Schedule 1 clause 1 and shows the percentages used to work out the costs of the children for all income levels and for different numbers and ages of children. Information regarding the use of the table is included at clauses 2, 3 and 4 of Schedule 1.

Parents' combined child support income or parent's child support income
Fraction of MTAWE 0 to 0.5 0.5 to 1 1 to 1.5 1.5 to 2 2 to 2.5 Over 2.5
Child support children Costs of the children
All children aged 0-12 years
1 child 17% 15% 12% 10% 7%
2 children 24% 23% 20% 18% 10%
3 children 27% 26% 25% 24% 18%
All children aged 13+ years
1 child 23% 22% 12% 10% 9%
2 children 29% 28% 25% 20% 13%
3 children 32% 31% 30% 29% 20%
At least 1 child aged 0-12 years and 1 child aged 13+ years
2 children 26.5% 25.5% 22.5% 19% 11.5%
3 children 29.5% 28.5% 27.5% 26.5% 19%

The Costs of the Children Table is divided into columns, with each column representing an income bracket that is a fraction of MTAWE. The parents' combined child support income is used in determining the costs of the children in child support formulas 1,2, 3 and 4 (sections 55G(1) and 55HA(1)). Only 1 parent's income is used in determining the costs of the children in child support formulas 5 and 6 (sections 55G(2) and 55HA(2)).

If the income used to calculate the costs of the child is greater than 2.5 times MTAWE, then the costs are capped at the amount in the last column of the Costs of the Children Table.

Example: The parents' combined child support income is \$197,000, for a child support period starting 6 September 2008. There are 2 children over 12. The costs of the children are capped at \$31,486, the number in the last column of the '2 children' row in the table for older children (13+ years).

## Ages of the children

The Costs of the Children Table is divided into children aged 0-12 years and 13+ years. There are also mixed age amounts in the table for use when calculating the costs of a child using the basic formula method or the costs of a relevant dependent child. The mixed age amounts are an average of the amounts for children aged 0-12 years and 13+ years.

The costs of the children for a day in the child support period are calculated by identifying the age of the children for that day (section 55G(3)). If a child will turn 13 within the child support period the costs of the child will be calculated differently for the periods before and after the child's 13th birthday.

Example: Sam and Maria have 3 children, Alex aged 12, Nicholas aged 9 and Michael aged 8. The child support period starts on 6 September 2008. Alex's 13th birthday is on 12 November 2008.

The costs of the children are calculated using the table for 3 younger children (0-12 years) for the period 6 September to 11 November 2008. For the period 12 November 2008 to 5 December 2009 the costs are calculated using the mixed age amounts in the Costs of the Children Table.

## Number of children

The ranges for the number of children are 1, 2 or 3 or more. Where there are 4 or more children, the same costs as for 3 children are used. When calculating costs for more than 3 children, the ages of the oldest 3 children are used (section 55G(4)).

Example: Ivan and Peta have 4 children, Adam aged 15, Deborah aged 13, Bristol aged 10 and Peta aged 8. The child support period starts on 6 September 2018.

The costs of the children are calculated using the ages of the 3 eldest children. As the 3 eldest children are 2 older and 1 younger child, the mixed age amounts in the Costs of the Children Table for 2018 are used. The costs of each child will be the total costs of the children divided by the actual number of children, which is 4.

## Calculating the costs of a child - the basic formula method

The method to be used to work out the costs of the children is specified at section 55G. The steps, using the Costs of the Children Table, are:

Step 1. Locate the appropriate income bracket (column)

Step 2. Identify the ages of the children - all under 13, all 13 and over or of mixed ages. Go to the corresponding range (box).

Step 3. Determine if there are 1, 2 or 3 or more children and identify the correct row.

Step 4. Follow the instructions in the box to determine the costs of the children.

If there is only 1 child, the costs determined at step 4 are the costs of the child (section 55H(a)). Otherwise, the costs of each child are worked out by dividing the costs determined at step 4 by the number of children (section 55H(b)).

The amount calculated is rounded, to the nearest dollar (below 49.5 cents rounded down, 49.5 cents and above rounded up), to a dollar figure at each step.

Example: The parents' combined child support income is \$57,000, for a child support period starting 6 September 2008. There are 2 children over 12. The box where the respective column and row intersect shows that the costs are the total of \$15,606 plus 25c for each \$1 over \$54,756.

Costs of the children = \$15,606 + ((\$57,000 − \$54,756) × \$0.25)
= \$15,606 + (\$2,244 × \$0.25)
= \$15,606 + \$561
= \$16,167

Costs of a child = \$8,084 (\$16,167 divided by 2 children)

## Calculating the costs of a child - multiple case method

The method to be used to work out the costs of the children where 1 or both of the parents has multiple child support cases is specified in section 55HA. The mixed age range of the Costs of the Children Table is not used for multiple case calculations, as the costs of each child are worked out as though all of the children in the case are the same age.

The steps to be used for each case, using the Costs of the Children Table, are:

Step 1. Locate the appropriate income bracket (column)

Step 2. Identify the number of children in the case for which the costs are being determined

Step 3. For each child in the case, identify the age of the child

Step 4. For each child in the case, calculate the cost of the child as though all of the children in the case were the same age as that child

Example: A child of the case, Diane is 12. There are 2 other children in the case who are 14 and 15. For this step calculate the cost of the child Diane as though all children were 12 (i.e. 3 children under 13).

Step 5. Identify the box in the relevant column in the costs of the children table that covers the number of children of that age

Step 6. Follow the instructions in the box to work out the costs of the children

Step 7. To work out the costs of the child, divide the amount worked out at step 6 by the number of children (costs of 2 children the same age as B).

Steps 3 to 7 are repeated to work out the costs of each child in the case. Steps 1 to 7 are repeated for each child support case.

Example: Beatrix has 2 child support cases. In case 1, the parents' combined child support income is \$57,000 and there are 2 children, Phoebe aged 4 and Anthony aged 7. In case 2, the parent's combined child support income is \$72,000 and there are 2 children, Elvira aged 9 and Bart aged 15.

In case 1, the box where the respective column and row intersect shows that the costs of Phoebe are the total of \$12,868 plus 20c for each \$1 over \$54,756.

Costs of the children = \$12,868 + ((\$57,000 − \$54,756) × \$0.20)
= \$12,868 + (\$2,244 × \$0.20)
= \$12,868 + \$449
= \$13,317

Costs of Phoebe = \$6,659 (\$13,317 divided by 2 children)

The same calculation is used to work out the costs of the child Anthony = \$6,659.

In case 2, the box where the respective column and row intersect shows that the costs of Elvira are the total of \$12,868 plus 20c for each \$1 over \$54,756 (costs of 2 children the same age as Elvira).

Costs of the children = \$12,868 + ((\$72,000 − \$54,756) × \$0.20)
= \$12,868 + (\$17,244 × \$0.20)
= \$12,868 + \$3,449
= \$16,317

Costs of Elvira = \$8,159 (\$16,317 divided by 2 children)

For the elder child Bart, the box where the respective column and row intersect shows that the costs of Bart are the total of \$15,606 plus 25c for each \$1 over \$54,756 (costs of 2 children the same age as Bart).

Costs of the children = \$15,606 + ((\$72,000 − \$54,756) × \$0.25)
= \$15,606 + (\$17,244 × \$0.25)
= \$15,606 + \$4,311
= \$19,917

Costs of Bart = \$9,959 (\$19,917 divided by 2 children)

## Calculating a relevant dependent child amount

If a parent has a relevant dependent child in their care the cost of the parent caring for that child is taken into account in calculating their child support assessment. The costs are included by deducting a 'relevant dependent child amount' from the parent's initial child support income (their adjusted taxable income less the self-support amount) at step 1 of the basic formula. Only the initial child support income of the parent who has the relevant dependent child is used to calculate the costs of the relevant dependent child.

The relevant dependent child amount is the total of the amounts worked out for each relevant dependent child of the parent using the following steps (section 46).

Step 1. Deduct the parent's self-support amount from their adjusted taxable income to determine their initial child support income.

Step 2. Work out the parent's percentage of care* for the child. (Note: a parent who lives fulltime with a relevant dependent child has 100% care of that child, even if they also live with a new partner. The new partner's income is disregarded in the calculation of the relevant dependent child amount, and therefore so is any contribution they make to the costs of the relevant dependent child).

Step 3. Work out the parent's cost percentage for the child (section 55C).

Step 4. Work out the costs of the child using the 'basic formula method' described above, using the parent's initial child support income only (section 55G).

Step 5. Work out the relevant dependent child amount using the following calculation.

Parent's cost percentage for the child under step 3 × costs of the child under step 4

Example: Sung-soo has an adjusted taxable income of \$50,000 and is the parent of a relevant dependent child Abigail aged 3. Sung-soo has 100% care of Abigail. The self support amount is \$18,252.

The initial child support income is \$50,000 − \$18,252 = \$31,748 (step 1)

Sung-soo has 100% care of Abigail (step 2). The cost percentage is 100% (step 3).

The box where the respective column and row intersect shows that the costs of Abigail are the total of \$4,654 plus 15c for each \$1 over \$27,378.

Costs of the children = \$4,654 + ((\$31,748 − \$27,378) × 0.15)
= \$4,654 + (\$4,370 × \$0.15)
= \$4,654 + \$656
= \$5,310 (step 4)

As Sung-soo has a cost percentage of 100%, the relevant dependent child amount is \$5,310.

The relevant dependent child amount is deducted from the parent's initial child support income to determine their child support income.

Example: Sylvester has an adjusted taxable income of \$50,000 and is the parent of a relevant dependent child Anna aged 3. Sylvester has 100% care of Anna. The self-support amount is \$18,252.

The initial child support income is: \$31,748

The relevant dependent child amount is: \$5,310

The parent's child support income is: \$26,438

See 2.9.5 for information about amending an assessment to recognise a relevant dependent child.

Last reviewed: 20 September 2018