Presently the amount of child support that a parent is required to pay is determined by the cost of care table which predetermines the cost of raising children. The determined cost of each child is than split up depending on the income of the parents and the amount of nights the child spends at each parent’s house.

The amount of income applied by the Child Support Agency is often higher than the net income of the parents because some deductions allowed by the Tax Office are not allowed by the Child Support Agency. This includes mortgage payments in respect of Investment properties.

Further Child Support payments are not tax deductable and the basis for their determination is the parent’s gross income rather than their income after tax.  If the Child Support Agency believes the parent is under utilising their income they may also seek fit to adjust the amount of child support payable.

The establishment of a child support trust and the execution of a binding child support agreement can reduce the amount of tax paid on current and future payments of the child support trust. A Child Support trust will hold assets for the benefit of the children and income obtained by the trust can be paid to the Children (or their guardian) as maintenance.

If you have any questions or queries or would like more information, please do not hesitate to contact Greg Dickson This e-mail address is being protected from spambots. You need JavaScript enabled to view it or Amanda Doring This e-mail address is being protected from spambots. You need JavaScript enabled to view it on 9525 8688.