The new Child Support formula is based on new Australian research on the costs of children and reflects community values around shared parenting. The formula will treat both parents' incomes and living costs more equally.
Under the new formula:
- child support payments will be calculated based on the actual costs of children;
- both parents' income will be taken into account, and the same self support amount will be applied to each;
- both parents' contributions to the cost of their children through care and contact will be recognised; and
- children of first and second families will be treated more equally.
The Government is changing the Child Support Scheme to ensure it works in the best interests of children, better balances the interests of parents and reflects community values.
The reforms of the Child Support Scheme are extensive and will be implemented in three stages over a two year period. Stage 1, commencing in July 2006, includes a number of changes such as increasing the minimum payment. Stage 2 (January 2007) includes the introduction of an independent administrative review of Child Support Agency decisions and the major formula changes will occur in Stage 3, July 2008.
The new formula will be implemented on 1 July 2008 as part of Stage 3 of the Child Support Reforms.
Total Government Funding
This measure will be implemented in Stage 3 of the reforms to the Child Support Scheme and will cost $582.2 million over five years.