The new child support scheme - scenarios
The following scenarios illustrate the way the new child support formula recognises:
- the higher cost of older children;
- regular care with the non-resident parent;
- the income of both parents equally;
- how children of second families are treated more equally, where the payer is on a high income; and
- how children of second families are treated more equally, where the payer is on a low income.
In all scenarios presented, it is assumed that the parents do not pay rent. For scenarios one four, it is assumed that both the payer and payee do not have other dependent children.
The scenarios assume that the child support assessment started in 2008. The FTB supplements are paid at the end of the financial year.
Rounding effects may slightly alter amounts presented in the tables.
Scenario 1: higher costs of older children
George and Jan have a 14-year old son, Billy. They separate. Jan earns an annual taxable income of $55,000. George receives Parenting Payment Single, earning $13,980 a year. Billy lives with George 100 per cent of the time.
Old formula
| George |
Annually |
Fortnightly |
Weekly |
| Child support received |
$7,132 |
$274 |
$137 |
| FTB (excluding supplement) |
$4,552 |
$175 |
$87 |
| FTB Supplement |
$1,022 |
$39 |
$20 |
| Outcome |
$12,706 |
$488 |
$244 |
| Jan |
Annually |
Fortnightly |
Weekly |
| Child support paid |
$7,132 |
$274 |
$137 |
| FTB (excluding supplement) |
$0 |
$0 |
$0 |
| FTB Supplement |
$0 |
$0 |
$0 |
| Outcome |
$-7,132 |
$-274 |
$-137 |
New formula
| George |
Annually |
Fortnightly |
Weekly |
| Child support received |
$8,358 |
$321 |
$160 |
| FTB (excluding supplement) |
$3,938 |
$151 |
$76 |
| FTB Supplement |
$1,022 |
$39 |
$20 |
| Outcome |
$13,318 |
$511 |
$256 |
| Jan |
Annually |
Fortnightly |
Weekly |
| Child support paid |
$8,358 |
$321 |
$160 |
| FTB (excluding supplement) |
$0 |
$0 |
$0 |
| FTB Supplement |
$0 |
$0 |
$0 |
| Outcome |
$-8,358 |
$-321 |
$-160 |
The weekly difference
| George |
Before |
After |
Difference |
| Child support received |
$137 |
$160 |
+$23 |
| FTB (excluding supplement) |
$87 |
$76 |
-$11 |
| Supplement |
$20 |
$20 |
$0 |
| Outcome |
$244 |
$256 |
+$12 |
| Jan |
Before |
After |
Difference |
| Child support paid |
$137 |
$160 |
-$23 |
| FTB (excluding supplement) |
$0 |
$0 |
$0 |
| FTB Supplement |
$0 |
$0 |
$0 |
| Outcome |
$-137 |
$-160 |
-$23 |
Because the new formula recognises the additional costs of older children, Jan pays an additional $23 per week. The old child support formula did not recognise the increased cost of children as they get older. George will receive $23 more child support, which will result in him receiving less FTB, leaving a net increase for George of $12 per week.
Scenario 2: regular care with the non-resident parent
Ron and Susan have one 2-year old son, Mick. Ron earns $40,000. Susan receives Parenting Payment Single (PPS) and earns $13,980 a year. Ron cares for Mick 14 per cent of the time (52 nights per year). Susan cares for Mick 313 nights per year.
Old formula
| Susan |
Annually |
Fortnightly |
Weekly |
| Child support received |
$4,432 |
$170 |
$85 |
| FTB (excluding supplement) |
$4,712 |
$181 |
$90 |
| FTB Supplement |
$880 |
$34 |
$17 |
| Outcome |
$10,024 |
$385 |
$192 |
| Ron |
Annually |
Fortnightly |
Weekly |
| Child support paid |
$4,432 |
$170 |
$85 |
| FTB (excluding supplement) |
$1,022 |
$39 |
$20 |
| FTB Supplement |
$142 |
$5 |
$3 |
| Outcome |
-$3,268 |
-$126 |
$-62 |
New formula
| Susan |
Annually |
Fortnightly |
Weekly |
| Child support received |
$2,810 |
$108 |
$54 |
| FTB (excluding supplement) |
$6,544 |
$251 |
$126 |
| FTB Supplement |
$1,022 |
$39 |
$20 |
| Outcome |
$10,376 |
$398 |
$200 |
| Ron |
Annually |
Fortnightly |
Weekly |
| Child support paid |
$2,810 |
$108 |
$54 |
| FTB (excluding supplement) |
$0 |
$0 |
$0 |
| FTB Supplement |
$0 |
$0 |
$0 |
| Outcome |
-$2,810 |
-$108 |
-$54 |
The weekly difference
| Susan |
Before |
After |
Difference |
| Child support received |
$85 |
$54 |
-$31 |
| FTB (excluding supplement) |
$90 |
$126 |
+$36 |
| FTB Supplement |
$17 |
$20 |
+$3 |
| Outcome |
$192 |
$200 |
+$8 |
| Ron |
Before |
After |
Difference |
| Child support paid |
$85 |
$54 |
+$31 |
| FTB (excluding supplement) |
$20 |
$0 |
-$20 |
| FTB Supplement |
$3 |
$0 |
-$3 |
| Outcome |
$108 |
$54 |
+$8 |
As Ron provides regular care (14 – 34 per cent of total care) of Mick, under the new formula Ron’s care is counted as meeting 24 per cent of the costs of raising Mick and this will reduce Ron’s child support liability. This differs from the old scheme, where regular care provided by the payer was not taken into account in calculating child support where care is below 30 per cent.
However, as Ron has less than 35 per cent care of Mick, under the new scheme, Ron is no longer eligible for a share of the FTB for Mick. Susan will receive all the FTB for Mick, and the FTB she receives will also increase because of the reduced child support.
Scenario 3: equal treatment of income from both parents
Molly and Bruce have one 4-year old child. Molly has sole care of the child. Molly's income is $30,000 (a mix of PPS and earned income) and Bruce earns $50,000.
Old formula
| Molly |
Annually |
Fortnightly |
Weekly |
| Child support received |
$6,232 |
$239 |
$120 |
| FTB (excluding supplement) |
$4,833 |
$185 |
$93 |
| FTB Supplement |
$1,022 |
$39 |
$20 |
| Outcome |
$12,087 |
$463 |
$233 |
| Bruce |
Annually |
Fortnightly |
Weekly |
| Child support paid |
$6,232 |
$239 |
$120 |
| FTB (excluding supplement) |
$0 |
$0 |
$0 |
| FTB Supplement |
$0 |
$0 |
$0 |
| Outcome |
-$6,232 |
-$239 |
-$120 |
New formula
| Molly |
Annually |
Fortnightly |
Weekly |
| Child support received |
$5,162 |
$198 |
$99 |
| FTB (excluding supplement) |
$5,369 |
$206 |
$103 |
| FTB Supplement |
$1,022 |
$39 |
$20 |
| Outcome |
$11,553 |
$443 |
$222 |
| Bruce |
Annually |
Fortnightly |
Weekly |
| Child support paid |
$5,162 |
$198 |
$99 |
| FTB (excluding supplement) |
$0 |
$0 |
$0 |
| FTB Supplement |
$0 |
$0 |
$0 |
| Outcome |
-$5,162 |
-$198 |
-$99 |
The weekly difference
| Molly |
Before |
After |
Difference |
| Child support received |
$120 |
$99 |
-$21 |
| FTB (excluding supplement) |
$93 |
$103 |
+10 |
| FTB Supplement |
$20 |
$20 |
$0 |
| Outcome |
$233 |
$222 |
-$11 |
| Bruce |
Before |
After |
Difference |
| Child support paid |
$120 |
$99 |
+$21 |
| FTB (excluding supplement) |
$0 |
$0 |
$0 |
| FTB Supplement |
$0 |
$0 |
$0 |
| Outcome |
-$120 |
-$99 |
+$21 |
Under the new child support scheme, Molly's income is considered in the calculation of the child support liability. The amount of child support that she will receive under the new scheme reduces accordingly. This differs from the old scheme, where Molly's income was only taken into account for the purposes of calculating child support if it exceeded a set amount (currently $45,505). Because Molly is receiving less child support, she receives more FTB.
Scenario 4: Payers with a second family – net gain
Mark and Miranda have two children, both under five years of age. Mark and Miranda separate. Both children live with the mother, Miranda. Mark has re-partnered with Sally and has a new child in his new relationship. Mark has a salary of $70,000 while Miranda is on Parenting Payment Single ($13,980). Sally does not earn any income. All FTB received by Mark is in relation to his new family with Sally.
Old formula
| Miranda |
Annually |
Fortnightly |
Weekly |
| Child support received |
$11,270 |
$432 |
$216 |
| FTB (excluding supplement) |
$6,475 |
$248 |
$124 |
| FTB Supplement |
$1,708 |
$66 |
$33 |
| Outcome |
$19,453 |
$746 |
$373 |
| Mark |
Annually |
Fortnightly |
Weekly |
| Child support payable |
$11,270 |
$432 |
$216 |
| FTB (excluding supplement) |
$4,617 |
$177 |
$89 |
| FTB Supplement |
$1,022 |
$39 |
$20 |
| Outcome |
-$5,631 |
-$216 |
-$107 |
New formula
| Miranda |
Annually |
Fortnightly |
Weekly |
| Child support received |
$10,266 |
$393 |
$197 |
| FTB (excluding supplement) |
$6,979 |
$268 |
$134 |
| FTB Supplement |
$1,708 |
$66 |
$33 |
| Outcome |
$18,953 |
$727 |
$364 |
| Mark |
Annually |
Fortnightly |
Weekly |
| Child support paid |
$10,266 |
$393 |
$197 |
| FTB (excluding supplement) |
$4,617 |
$177 |
$89 |
| FTB Supplement |
$1,022 |
$39 |
$20 |
| Outcome |
-$4,627 |
-$177 |
-$88 |
The weekly difference
| Miranda |
Before |
After |
Difference |
| Child support received |
$216 |
$197 |
-$19 |
| FTB (excluding supplement) |
$124 |
$134 |
+$10 |
| FTB Supplement |
$33 |
$33 |
$0 |
| Outcome |
$373 |
$364 |
-$9 |
| Mark |
Before |
After |
Difference |
| Child support payable |
$216 |
$197 |
+$19 |
| FTB (excluding supplement) |
$89 |
$89 |
$0 |
| Supplement |
$20 |
$20 |
$0 |
| Outcome |
-$107 |
-$88 |
+$19 |
Under the new formula Mark pays $19 per week less child support to Miranda. Miranda receives $19 per week less child support but receives $9 more FTB per week.
Under the old formula, payers with new biological (or adopted) children were given a fixed increase in the amount of income that is excluded from the child support assessment. This resulted in unequal treatment of children from first and second families. For payers with high incomes, such as Mark, the amount allowed for the support of his new child was too low compared with the amount he continues to pay for his child support children.
Under the new formula, the cost of all his children is calculated using the costs of children table and the amount his new child costs is deducted from his child support income. The result is that Mark will pay less child support to Miranda, and retains more of his income to support his new child.
Scenario 5: Payers with a second family – net loss
Richard and Rebecca have two children, both under 5. Richard and Rebecca separate. Both children live with the mother, Rebecca. Richard has re-partnered with Emma and has a new child in this new relationship. Richard has a salary of $25,000 while Rebecca is on Parenting Payment Single ($13,980). Emma receives an income of $25,000 per year. All FTB received by Richard is in relation to his new family.
Current formula
| Rebecca |
Annually |
Fortnightly |
Weekly |
| Child support received |
$339 |
$13 |
$7 |
| FTB (excluding supplement) |
$11,249 |
$431 |
$216 |
| FTB Supplement |
$1,708 |
$66 |
$33 |
| Outcome |
$13,296 |
$510 |
$256 |
| Richard |
Annually |
Fortnightly |
Weekly |
| Child support payable |
$339 |
$13 |
$7 |
| FTB (excluding supplement) |
$2,526 |
$97 |
$48 |
| FTB Supplement |
$686 |
$26 |
$13 |
| Outcome |
$2,873 |
$110 |
$54 |
New formula
| Rebecca |
Annually |
Fortnightly |
Weekly |
| Child support received |
$1,344 |
$52 |
$26 |
| FTB (excluding supplement) |
$11,249 |
$431 |
$216 |
| FTB Supplement |
$1,708 |
$66 |
$33 |
| Outcome |
$14,301 |
$549 |
$275 |
| Richard |
Annually |
Fortnightly |
Weekly |
| Child support paid |
$1,344 |
$52 |
$26 |
| FTB (excluding supplement) |
$2,727 |
$105 |
$52 |
| FTB Supplement |
$686 |
$26 |
$13 |
| Outcome |
$2,069 |
$79 |
$39 |
The weekly difference
| Rebecca |
Before |
After |
Difference |
| Child support received |
$7 |
$26 |
+$19 |
| FTB (excluding supplement) |
$216 |
$216 |
$0 |
| FTB Supplement |
$33 |
$33 |
$0 |
| Outcome |
$256 |
$275 |
+$19 |
| Richard |
Before |
After |
Difference |
| Child support payable |
$7 |
$26 |
-$19 |
| FTB (excluding supplement) |
$48 |
$52 |
+$4 |
| Supplement |
$13 |
$13 |
$0 |
| Outcome |
$54 |
$39 |
-$15 |
Under the new formula Richard pays $19 per week more child support to Rebecca and receives $4 per week more FTB for his new family. Rebecca receives $19 per week more child support per week.
Under the old formula, for payers with low incomes, such as Richard, the amount allowed for the support of his new child was too high compared with the amount he paid for his child support children.
Under the new formula, the costs of all his children is calculated according to the cost of children table and his new child costs is deducted from his child support income. The result is that Richard will keep only an amount to cover the cost of his new child and will pay more child support to Rebecca.