Attwood Marshall Lawyers Family Law Associate, Laura Dolan, discusses the controversy around the $200K monthly child support payments Kayne is set to pay Kim Kardashian now that their divorce has been finalised. When it comes to child support payments, there are many people who believe the system is flawed against men, however, child support payments are determined by a set formula unless the parents enter into an agreement privately.
Introduction
It’s not surprising that the “highest paid hip-hop rapper”, who is estimated to be worth billions (although his net worth has been said to have dropped dramatically as a result of his most recent public antisemitic Twitter rant), has been ordered to pay one of the most expensive child support payments in history (almost double the $1.3 million a year Brendan Fraser reported to pay in 2009).
Kanye is set to pay Kim Kardashian $200K each month following their divorce to support their four children, who are currently aged 9, 7, 4, and 3 at the time this article was published.
Many people might wonder why the child support payments are so high, given that Kim Kardashian is estimated to be worth $1.8 billion (USD).
Despite what each parent may be worth, child support is calculated on a set formula which considers both parents’ financial circumstances.
How is child support calculated?
Child support payments are determined by how much income each parent earns, how many children there are to support, and the children’s ages. There is also a cost loading that applies to teenagers.
The government uses each parent’s last recorded taxable income to determine their earnings. Therefore, anything a parent earns above the self-support amount, which is currently estimated to be $27,000 a year, counts as assessable income for child support payments.
The Child Support Agency uses a cost table that shows what a couple on different income levels would likely spend on their children.
Economists worked out these cost tables by examining how having children affects the spending habits of families.
To form child support payments, the parents create a pool of funds to benefit their children. Each parent contributes an amount based on their income; for example, if one parent contributes 50 per cent to the combined income, they will then contribute 50 per cent to the cost of the children.
The fund is distributed back to the parents to cover the costs of the children. If one parent is spending 25 per cent of the time with their children, then that parent will receive back roughly 25 per cent of the pool, with the other parent receiving the remaining 75 per cent to benefit the children.
Ultimately, whoever cares for the children more, will receive the larger share of the combined pool of funds and is considered the “receiver”, with the other parent considered the “payer”.
Set formula vs private agreement
After parents separate, they may choose to come to their own agreement about how they will continue to financially support their children instead of going through the government agency. A privately agreed amount may differ from what would be calculated using the set formula by the Child Support Agency.
If parents intend to enter an agreement privately, it is highly recommended that they both obtain independent legal advice from an experienced family lawyer who can draft a Binding Child Support Agreement.
A Binding Child Support Agreement is a written agreement that both parents sign that will outline how much financial support is to be paid to which parent, how frequently the payments are to be made, and the method of payment.
A family lawyer will be able to advise a parent on the benefits and downside of entering into this type of agreement. A certificate will then be signed by each parent’s lawyer stating that legal advice has been given on the matter, and the lawyer’s certificates must also then be attached to the Binding Child Support Agreement.
Entering a Binding Child Support Agreement can offer greater flexibility for parents who can successfully negotiate and come to an agreement between themselves that will suit the unique nature of their family rather than simply relying on the government’s set formula.
If parents are unable to reach an agreement regarding child support, then an application to the Child Support Agency for an assessment will be required.
What happens if one parent refuses to pay child support?
By law, a parent is liable to provide financial support to benefit their children. If, for example, the mother of the children is the primary carer, then the father is required to pay the mother of an eligible child, child support payments.
The parent who is paying child support can elect whether the Child Support Agency will collect the child support payments and distribute them to the other party or if a private agreement will be in place where the parent may pay the other parent directly.
If the payer of child support fails to continue to make their child support payments, a debt will accrue. The parent receiving child support must notify the Child Support Agency at the earliest opportunity to notify them of the accruing debt. The Agency will then step in to attempt to retrieve the debt.
If the parent refuses to make child support payments, and the debt continues to accrue, the Child Support Agency will have the power to:
- Make the employer of the liable parent deduct child support from their pay
- Utilise a tax refund the liable parent is expected to receive to cover their child support debt
- Access the liable parent’s bank account to deduct payments for child support
- If the liable parent is receiving any income support payments, the Child Support Agency can deduct amounts from these payments to cover child support debt
- Commence Court proceedings if other methods have failed.
Think your child support payments are unfair? How to request a change of assessment
If you believe the Child Support formula does not accurately reflect your ability to pay child support, it is important to make an application for ‘Change of Assessment in Special Circumstances’.
The form can be downloaded from the Child Support website. It is helpful to call the Child Support Agency before completing the application to enquire if your situation warrants completing the form.
The form and supporting documentation can then be uploaded online through myGov.
The main reasons parents may request to change their assessment are usually because the cost of raising children has been affected by:
- The costs of spending time with, or communicating with, the children
- Special needs of the children.
- The children being cared for, educated or trained in the way both parents intended (for example sending children to a private school instead of a public school).
- An unfair assessment because of the child’s income, earning capacity, property or financial resources.
- An unfair assessment because a parent has paid or transferred funds or property to the child, or the other parent, for the child’s benefit.
- The parent’s childcare costs.
- Necessary expenses reducing a parent’s capacity to support their child/ren.
- An unfair assessment because of the income, earning capacity, property, or financial resources of either or both parents.
- Lower income.
Attwood Marshall Lawyers – helping families resolve conflict and protecting the best interests of children
Attwood Marshall Lawyers have a dedicated team of family lawyers who practice exclusively in this complex area of law. Our team are well versed at handling child support, parenting disputes, property disputes and spousal maintenance, divorce applications, and family and domestic violence related matters.
If you need advice regarding child support payments, our dedicated family lawyers can help you negotiate the terms of the arrangement and document binding agreements. It is our focus to protect the best interests of the children and to resolve disputes quickly and effectively so that all parties can move on with their lives peacefully.
To talk to our team today, contact our Family Law Department Manager, Donna Tolley, on direct line 07 5506 8241, email dtolley@attwoodmarshall.com.au or free call 1800 621 071.
Our family lawyers are available for appointments at any of our conveniently located offices at Robina Town Centre, Coolangatta, Kingscliff, Brisbane, Sydney, and Melbourne.
