Who is a liable parent and receiving carer under a formula assessment?

The new legislation has changed some of the terminology and the associated definitions in the Child Support Act 1991. This is particularly relevant for determining, under a formula assessment, who is a liable parent and who is a receiving carer.

A parent of a qualifying child is a liable parent if the parent's income percentage is greater than or equal to their care cost percentage for that child. Likewise, a parent of a qualifying child is a receiving carer if the parent's income percentage is less than their care cost percentage for the child.

A non-parent carer of a qualifying child can also be a receiving carer if they provide at least 35% of ongoing daily care to the child. A non-parent carer is not assessed on their level of income as they cannot be liable for child support payments. A care cost percentage will be established to help determine how much child support they receive.

A liable parent may have their liability assessed as nil. This may occur if:

1. the liable parent provides more than 65% of ongoing daily care to the child, or
2. the liable parent provides at least 28% of ongoing daily care to the child and the liable parent's income percentage is equal to their care cost percentage, or
3. no receiving carer provides at least 35% of ongoing daily care to the child.

A receiving carer will receive child support payments, unless they provide less than 35% of the ongoing daily care to the child.

A reassessment of child support components, for example, a change in the levels of ongoing care or income can result in a person changing from being a liable parent to a receiving carer and vice versa.