Children are extraordinarily expensive. Not only due to day-to-day costs, such as clothing and food, but also due to significant ‘one-off’ purchases that can arise including day care reservation fees early in their lives, then back-to-school costs at the start of each school year.
I heard on the radio recently that childcare reservation fees at some local day care centres are approaching $1500, and you don’t necessarily get that money back if you choose not to send your child to that centre by the time they are ready to start. As well as this it seems that back-to-school costs for children now typically extend to expensive IT necessities, even iPads and personal laptops at a growing number of schools on the North Shore.
These facts alone leave you in no doubt that it costs a lot of money to raise a child.
The costs can take a toll on household budgets in typical households, but particularly in families who are experiencing a separation. Running two separate households is, as you would expect, more expensive than running one, and often there is simply not enough money available to cover all the expenses that are likely to be incurred in the two homes.
In Australia, the amount of child support that one parent must pay to the other parent is determined, at least initially, in accordance with an administrative assessment formula. You can see how to work out child support using the basic formula here.
In summary, the basic child support formula is complicated and multilayered. It relies upon research into the costs of raising children in different age brackets as its starting point. The basic formula then takes into account the parents’ respective relevant incomes and the amount of time that each of the children spend with each parent in determining an appropriate level of child support to be paid and/or received. The formula also makes allowances for new siblings and other dependents and for other ‘life’ considerations. In addition, there are grounds upon which you can seek to change an administrative assessment of child support if, for example, you can show that the income of one or both of you is not properly taken into account or the costs of raising your child or children are special in all of the circumstances. Provided you meet particular provisions, these matters can also be considered by the Family Court.
Often the assessment that results from applying the administrative formula leaves parents feeling frustrated and short-changed. The parent having to pay the child support is usually not left with enough money each month to meet his or her own personal expenses (including housing), and the parent receiving the child support payment is still unable to pay for all the basic costs they incur in running their home.
Moreover, payments of child support made in accordance with the administrative assessment do not ‘spike’ each year as children return to school to cover the extra costs of new school shoes and other similar set-up costs that are required to be met as each new year rolls around.
Having a sound understanding of your household budget is important at all times, but this is even more critical if you have separated. Knowing all your true costs and being able to plan how those costs will be met is essential for your own financial independence and your personal and emotional wellbeing.
What can you do?
If you are facing a separation or are already separated, the three of the most useful things you can do are as follows.
- Work out a realistic budget for your new single-parent household. Remember to include not only the recurring monthly expenses that will arise but also the non-recurring expenses you incur such as back-to-school costs. It may be appropriate to get some professional help with this task.
- Talk to a specialist family lawyer about your options. An administrative assessment of child support is really only the first step. Appropriate child support payments can be secured in a variety of ways including:
- requesting changes to the basic child support formula to fit your family’s particular circumstances
- entering into a private Child Support Agreement (non-binding)
- seeking child support departure Orders from the Family Court
- negotiating a Binding Child Support Agreement (this requires the involvement of two lawyers).
- Visit the Department of Human Services website and review the formula. This will give you a fair idea of what amount of child support you are likely to receive/pay so that you have a better idea of where you are starting from. Don’t be surprised if the calculations are not what you were expecting. Talk to your family lawyer about how to make it right for you and your family.
The lawyers at Doolan Wagner Family Lawyers regularly help separated families secure appropriate child support arrangements, often as part of overall financial settlements. They also offer Accredited Specialists in the family law field and can provide sound and practical advice in relation to child support and all other family law matters. Visit www.familylawyersdw.com.au or call (02) 9437 0010.
Tell us. How do you manage the everyday cost of children with child support? Let us know your thoughts and experiences in the comments section below.
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