2.4.7 Formula 1 - the basic formula - a single case assessment
Context
The basic formula (1.1.B.10), Formula 1, is used to calculate the annual rate (1.1.A.70) of child support (1.1.C.60) payable when only the parents (1.1.C.10) have care of the child/ren and neither parent has another child support case (1.1.C.80).
Act references
CSA Act section 5, Part 5
The 8 Steps of the basic formula
The Registrar must follow the 8 steps of the basic formula (CSA Act section 35) in making an assessment when neither parent has another child support assessment (1.1.C.70) and only the parents provide care (1.1.C.10) for the children. This is referred to as a single case assessment.
The formula adopts an 'income shares' approach, which includes calculating the costs of raising children. These costs depend upon the income of the parents and the number and the age of the children. The costs are then shared between parents based on each parent's share of their combined income. The first step of the formula is to identify each parent's child support income (1.1.C.120).
| Step | Action | More detail |
|---|---|---|
| 1 | Work out each parent's child support income (CSA Act section 41) | 1.1.C.120 |
| 2 | Work out the parents' combined child support income (CSA Act section 42) | 1.1.C.190 |
| 3 | Work out each parent's income percentage (CSA Act section 55B) | 1.1.I.30 |
| 4 | Work out each parent's percentage of care for the child (CSA Act section 48) | 1.1.P.70 |
| 5 | Work out each parent's cost percentage for the child (CSA Act section 55C) | 1.1.C.200 |
| 6 | Work out each parent's child support percentage for the child (CSA Act section 55D) | 1.1.C.140 |
| 7 | Work out the COTC (CSA Act section 55G and section 55H) | 2.4.6 |
| 8 | If a parent has a positive child support percentage under Step 6, the 'annual rate of child support' payable by the parent for the child for the day is worked out using the formula:
| - |
Example – Using 2024 rates
Mark and Lisette have 3 children, Domitilla aged 9, Delia aged 7, and Helen aged 5, who spend 290 nights a year with Mark. The children spend 75 nights a year with Lisette, who has regular care (1.1.R.50) of the children. Mark has an ATI of $50,000 and Lisette has an ATI of $60,000.
| Mark | Lisette | |
| Step 1 – Work out each parent’s child support income | = $21,537 ($50,000 − $28,463) | = $31,537 ($60,000 − $28,463) |
| Step 2 – Work out the parents’ combined child support income | = $53,074 ($21,537 + $31,537) | |
| Step 3 – Work out each parent’s income percentage | 40.58% ($21,537 ÷ $53,074) | 59.42% ($31,537 ÷ $53,074) |
| Step 4 – Work out each parent’s percentage of care for each child | ||
| Domitilla aged 9 | 80% (290 ÷ 365 nights) | 20% (75 ÷ 365 nights) |
| Delia aged 7 | 80% (290 ÷ 365 nights) | 20% (75 ÷ 365 nights) |
| Helen aged 5 | 80% (290 ÷ 365 nights) | 20% (75 ÷ 365 nights) |
| Step 5 – Work out each parent’s cost percentage for each child | ||
| Domitilla aged 9 | 76% | 24% |
| Delia aged 7 | 76% | 24% |
| Helen aged 5 | 76% | 24% |
| Step 6 – Work out each parent’s child support percentage for each child | ||
| Domitilla aged 9 | −35.42% | 35.42% (payer) |
| Delia aged 7 | −35.42% | 35.42% (payer) |
| Helen aged 5 | −35.42% | 35.42% (payer) |
| Step 7 – Work out the COTC for the case | ||
| COTC for the case | 3 children aged 0 to 12 years = $14,227
| |
Step 8 – Calculate child support payable for each child Lisette has a positive child support percentage so only she will pay child support. | ||
| Domitilla aged 9 | Nil | $4,742 × 35.42% = $1,680 |
| Delia aged 7 | Nil | $4,742 × 35.42% = $1,680 |
| Helen aged 5 | Nil | $4,742 × 35.42% = $1,680 |
| Total | Nil | $5,040 |
Note: A percentage of care is calculated for each child. As the care arrangements for these children are the same, the percentage is the same for all the children. If there are different care arrangements for different children, then they may have different percentages of care and potentially different cost percentages.
If there is an annual rate payable by each parent (because they each care for a child), the rates are offset against each other to arrive at a single, overall rate of child support payable by one parent to the other (CSA Act section 67A).