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Spousal maintenance and child support

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Spousal Maintenance

Separation is a difficult process, but it can be particularly more difficult if you are not the primary income earner in the relationship and are financially reliant on the other person. In some circumstances, you may be entitled to spousal maintenance. Spousal maintenance is financial support paid by one party to a marriage or de facto relationship to the other party in circumstances where that party is unable to adequately support themselves. 

The primary purpose of spousal maintenance is to adjust for any disparity between the incomes or earning capabilities of spouses based on their respective needs. It usually for a relatively short period after separation. This period of time enables the person receiving the maintenance to re-train, enter the workforce and generally re-establish themselves.

Entitlement to Spousal Maintenance

Spousal maintenance is not automatic, and you will need to show that you have a need for maintenance. 

Under the Family Law Act, a spouse has the right to maintenance to the extent that the other spouse is able to maintain them, if they have the care of a child under 18 years old, are unable to work because of their age or mental incapacity or for any other adequate reason.

Calculation of Spousal Maintenance

There is no prescribed formula that is applied when working out how much spousal maintenance is payable. The Courts will however take a standard approach when determining a spousal maintenance application, including:

  • The applicant’s reasonable needs for things such as food, clothing, medical and dental, housing and motor vehicle expenses; 
  • The applicant’s actual income, excluding any income received from Centrelink. This defines the applicant’s need or shortfall; 
  • The respondent’s reasonable needs in comparison to the respondent’s actual income. This defines the respondent’s surplus
  • If the applicant has a need and the respondent has a surplus, the Court will generally make a spousal maintenance order; and 
  • The order will only encroach on the surplus to the extent that is necessary to meet the applicant’s need. 

Time Limits

There are time limits that do apply for filing an application to the Federal Circuit Court for a spousal maintenance order. For married couples, you have 12 months from the date of divorce and for de facto couples, you have 2 years from the date of separation. The courts may grant leave to apply out of time for spousal maintenance, but the applicant must establish special grounds.

Applying for Spousal Maintenance

It is generally best to try and come to an agreement about the payment of spousal maintenance with your spouse before commencing legal proceedings. If you cannot reach agreement, you will need to file an application in the Federal Circuit Court seeking spousal maintenance orders. If the Court considers that you are in need of urgent financial assistance, it may order an immediate payment be made pending the final determination of your application. 

When the Court is considering an application for spousal maintenance orders it will look at a range of factors including: 

  • The care and control of a child under 18 years of age; 
  • The age and state of health of the parties; 
  • The capacity for gainful employment; 
  • The income, property and financial resources of both parties; 
  • The commitment of each of the parties to support themselves and other persons; 
  • The eligibility of the parties for a pension, allowance or benefit; 
  • A standard of living in all circumstances that is reasonable; 
  • Whether payment would increase the earning capacity of the other party; 
  • The rights of any creditors; 
  • The duration of the relationship and the effect that it has had on the earning capacity of the parties; 
  • The nature of cohabitation with any other person; 
  • The terms of any property settlement; or 
  • The terms of any financial agreement that is binding on the parties.
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Conclusion

It is common for the issue of spousal maintenance to be considered as part of a property settlement and in addition to a child support assessment. Spousal maintenance is usually only payable for a limited period following separation, until the applicant party is back in a situation where they can support themselves financially. However, in some circumstances, spousal maintenance may be ordered to be paid on a permanent basis. 

The Court has a wide discretion when determining whether or not spousal maintenance is payable. Each person’s circumstances are different and there are no two cases that will be assessed by the courts in the same manner. This case-by-case assessment by the courts of spousal maintenance creates a significant amount of certainty in each case. For specialist advice from a family law lawyer, contact us on (07) 5522 5777.

CHILD SUPPORT

When parents separate, proper arrangements will need to be made for the financial support of their children. The obligations of parents to provide for their children are governed by the Child Support (Assessment) Act 1989 (Qld) (CSA Act). Child support covers expenses such as food, housing, clothing, school costs and children’s extra curricular activities. The obligation to pay applies to all parents whether married, in a de facto relationship, some same-sex parents, and parents who have never lived together or had a relationship.

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Assessment of Child Support

On application to the Department of Human Services (DHS), DHS will make an administrative assessment and determine the amount of child support payable for the child. DHS assesses child support by using formulas that are set out in the CSA Act. Parents can also use the DHS Online Estimator to work out how much child support they should receive, or pay. 

The CSA formula used in deciding how much child support is to be paid, is as follows:  

  • Assess each parent’s child support income; 
  • Calculate the parents’ combined income; 
  • To calculate each parent’s income percentage, divide each parent’s income by their combined total; 
  • Calculate each parents’ percentage of care; 
  • Determine the child support percentage by subtracting the cost percentage from the income percentage for each parent; 
  • Assess the costs of the child based on the parents’ combined total income; and 
  • To calculate the total amount of child support payable, multiply the costs of the child by the positive child support percentage.

Parent’s can agree between themselves about arrangements for child support, or they can apply to DHS for an administrative assessment. Child support payments can be collected by DHS or parents can arrange for private collection. If one parent is not paying child support, there are various methods of collection that DHS can use to ensure that child support is paid, including deducting the payments from the parent’s wages or collecting the child support arrears from any tax refunds.

Binding Child Support Agreement

A Binding Child Support Agreement is a written agreement for child support signed by both parents, after they have each obtained independent legal advice about entering into a Binding Child Support Agreement. 

This legal advice must be provided by a legal practitioner and the legal practitioner must provide a statement that they have provided the parent with independent legal advice as to the effect of the agreement on their rights and the advantages and disadvantages of such an agreement. The agreement must include an acknowledgment of this advice. 

A Binding Child Support Agreement can be made and accepted, even if a child support assessment has not been made. The agreement can be made for any amount that both parents agree to.

Agreements about Child Support

If you and the other parent can agree about how your child should be supported financially, you can make a legally enforceable agreement. Child support agreements need to be set out in writing and detail the amount, frequency and method of child support payments. There are two types of child support agreements, limited agreements and binding agreements.

Limited Child Support Agreement

Limited Child Support Agreements are formal agreements for child support that are in writing and signed by both parties. You do not need legal advice before entering into a Limited Child Support Agreement. 

Before DHS can accept a Limited Child Support Agreement: 

  • There must be a child support assessment already in place; and 
  • The annual rate in the agreement must be equal to, or more than the annual rate of the child support assessment. 

A Limited Child Support Agreement can only be in place for a maximum of 3 years. After this time, either parent can terminate the agreement.

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Assessment of Child Support

On application to the Department of Human Services (DHS), DHS will make an administrative assessment and determine the amount of child support payable for the child. DHS assesses child support by using formulas that are set out in the CSA Act. Parents can also use the DHS Online Estimator to work out how much child support they should receive, or pay. 

The CSA formula used in deciding how much child support is to be paid, is as follows:  

  • Assess each parent’s child support income; 
  • Calculate the parents’ combined income; 
  • To calculate each parent’s income percentage, divide each parent’s income by their combined total; 
  • Calculate each parents’ percentage of care; 
  • Determine the child support percentage by subtracting the cost percentage from the income percentage for each parent; 
  • Assess the costs of the child based on the parents’ combined total income; and 
  • To calculate the total amount of child support payable, multiply the costs of the child by the positive child support percentage.

Parent’s can agree between themselves about arrangements for child support, or they can apply to DHS for an administrative assessment. Child support payments can be collected by DHS or parents can arrange for private collection. If one parent is not paying child support, there are various methods of collection that DHS can use to ensure that child support is paid, including deducting the payments from the parent’s wages or collecting the child support arrears from any tax refunds.

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Agreements about Child Support

If you and the other parent can agree about how your child should be supported financially, you can make a legally enforceable agreement. Child support agreements need to be set out in writing and detail the amount, frequency and method of child support payments. There are two types of child support agreements, limited agreements and binding agreements.

Limited Child Support Agreement

Limited Child Support Agreements are formal agreements for child support that are in writing and signed by both parties. You do not need legal advice before entering into a Limited Child Support Agreement. 

Before DHS can accept a Limited Child Support Agreement: 

  • There must be a child support assessment already in place; and 
  • The annual rate in the agreement must be equal to, or more than the annual rate of the child support assessment. 

A Limited Child Support Agreement can only be in place for a maximum of 3 years. After this time, either parent can terminate the agreement.

Binding Child Support Agreement

A Binding Child Support Agreement is a written agreement for child support signed by both parents, after they have each obtained independent legal advice about entering into a Binding Child Support Agreement. 

This legal advice must be provided by a legal practitioner and the legal practitioner must provide a statement that they have provided the parent with independent legal advice as to the effect of the agreement on their rights and the advantages and disadvantages of such an agreement. The agreement must include an acknowledgment of this advice. 

A Binding Child Support Agreement can be made and accepted, even if a child support assessment has not been made. The agreement can be made for any amount that both parents agree to.

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Setting Aside a Child Support Agreement

A Limited Child Support Agreement can only be in place for a maximum of 3 years, after which time, either parent can terminate it. A Binding Child Support Agreement however is more difficult to change and there are only limited circumstances when this may occur. 

A Binding Child Support Agreement can be terminated if: 

  • You enter into a new Binding Child Support Agreement with a provision to the effect that the previous agreement is terminated; 
  • You sign a Termination Agreement to the effect that the previous agreement is set aside; and 
  • If the Family Court makes an order setting aside the Binding Child Support Agreement. 

The Court may make an order setting aside the Binding Child Support Agreement only in very limited circumstances. The Court must be satisfied that: 

  • The agreement of a party was obtained by fraud or failure to disclose material information;  
  • The agreement of a party was obtained through undue influence of duress; 
  • The agreement of a party was obtained by unconscionable conduct such that it would be unjust not to set aside the agreement; or 
  • Exceptional circumstances have arisen since the agreement was made, such that the child of the application will suffer hardship if the agreement remains in place. 

There is a very high threshold for setting aside a Binding Child Support Agreement. There must be exceptional circumstances and clear evidence that hardship will be suffered if the agreement is not set aside.  Ultimately the decision is at the discretion of the Court. For specialist advice from a family law lawyer, contact us on (07) 5522 5777.