Examples

These child support examples show, for each given case, calculated support and/or other financial measures. The examples were developed to complement our reform proposals and critique of the current system (A Fairer, Better System). To generate your own examples or for updated estimates, you can use our calculator.

The examples demonstrate how new child support models could be used to fix the following flaws with the current scheme.

A parent on a lower income is give excessive credit for care costs.
Support is taken away from the main carer as their income increases.
The main carer can be required to maintain the other parent.
Effective marginal tax rates are excessively high.
Support amounts don't align with the division of care time.
Support amounts per night of extra care can be ridiculously high.

Time share = proposed new formula I

Hybrid = proposed new formula II

Income share = current formula / system

Note: These examples were generated using rate settings of 15.4% and 7.4% for the new formula. Our proposed rates have since been revised to 15% and 5%.

Set 1: Cost of Children

Lesson: New models (time share, hybrid) produce more realistic care costs

1A. LOW-INCOME CARER

Carer: $30k, 10/14 nights
Payer: $75k, 4/14 nights
Child age: 6

Time share | Hybrid | Income share

Carer cost/night... $18 | $18 | $26
Payer cost/night... $32 | $32 | $26

New models allow for different spending rates based on income

1B. MEDIUM-INCOME CARER

Carer: $75k, 10/14 nights
Payer: $75k, 4/14 nights
Child age: 6

Time share | Hybrid | Income share

Carer cost/night... $32 | $32 | $42
Payer cost/night... $32 | $32 | $42

New models avoid cost inflation from adding incomes

1C. WIDE INCOME GAP

Carer: $30k, 10/14 nights
Payer: $150k, 4/14 nights
Child age: 6

Time share | Hybrid | Income share

Carer cost/night... $23 | $33 | $47
Payer cost/night... $46 | $46 | $47

New models' costs more realistic for low-income carers

Set 2: Support and Income of Main Carer

Lesson: Support is withdrawn as carer income rises under current scheme (income sharing)

2A. LOW-INCOME CARER

Carer: $30k, 10 nights (+3)
Payer: $75k, 4 nights (-3)
Child ages: 10, 14

Time share | Hybrid | Income share

Nightly... $52.21 | $52.21 | $124.81
Annual... $4,084 | $4,084 | $9,762

Support too high for low-income carer under income sharing

2B. MEDIAN-INCOME CARER

Carer: $75k, 10 nights (+3)
Payer: $75k, 4 nights (-3)
Child ages: 10, 14

Time share | Hybrid | Income share

Nightly... $52.21 | $52.21 | $84.96
Annual... $4,084 | $4,084 | $6,645

Support cut for middle-income carer under income sharing

2C. HIGH-INCOME CARER

Carer: $120k, 10 nights (+3)
Payer: $75k, 4 nights (-3)
Child ages: 10, 14

Time share | Hybrid | Income share

Nightly... $52.21 | $52.21 | $47.65
Annual... $4,084 | $4,084 | $3,727

Support cut again for high-income carer under income sharing

Set 3: Support When Care is Close to Even

Lesson: The main carer can be required to pay large amounts of support under income sharing

3A. 9:5 CARE DIVISION

Carer: $120k, 9 nights (+2)
Payer: $50k, 5 nights (-2)
Child ages: 10, 14

Time share | Hybrid | Income share

Nightly... $34.81 | n/a | n/a
Annual... $1,815 | -$94 | -$1,475

Dominant carer pays support under income sharing

3B. 8:6 CARE DIVISION

Carer: $120k, 8 nights (+1)
Payer: $50k, 6 nights (-1)
Child ages: 10, 14

Time share | Hybrid | Income share

Nightly... $34.81 | n/a | n/a
Annual... $908 | -$1,384 | -$5,902

Main carer pays heavy support under income sharing

3C. EVEN CARE

Carer1: $120k, 7 nights
Carer2: $50k, 7 nights
Child ages: 10, 14

Time share | Hybrid | Income share

Nightly... n/a
Annual... $0 | -$2,673 | -$8,558

Equal carer pays heavy support under income sharing

Set 4: Income of Payer

Lesson: New models keep effective marginal tax rates (EMTRs) to acceptable levels
Note: EMTR is % of pay increase that goes to tax and child support

4A. LOW-INCOME PAYER

Carer: $60k, 10 nights (+3)
Payer: $30k, 4 nights (-3)
Child ages: 10, 12, 14

Time share | Hybrid | Income share

Nightly... $23.42 | $23.42 | $53.32
Annual... $1,832 | $1,832 | $4,170

...+ tax $4,229 | $4,229 | $6,567
EMTRs... n/a

Little support due to low income

4B. MEDIAN-INCOME PAYER

Carer: $60k, 10 nights (+3)
Payer: $75k, 4 nights (-3)
Child ages: 10, 12, 14

Time share | Hybrid | Income share

Nightly... $58.54 | $58.54 | $112
Annual... $4,579 | $4,579 | $8,796

...+ tax $22,001 | $22,001 | $26,218
EMTRs... 39% | 39% | 44%

New models keep EMTR down

4C. HIGH-INCOME PAYER

Carer: $60k, 10 nights (+3)
Payer: $120k, 4 nights (-3)
Child ages: 10, 12, 14

Time share | Hybrid | Income share

Nightly... $74.96 | $102 | $233
Annual... $5,863 | $8,000 | $18,252

...+ tax $40,295 | $42,432 | $52,684
EMTRs... 41% | 45% | 59%

New models keep EMTR <50%

Set 5: Support and the Division of Care

Lesson: New models make support proportionate to extra care / missed care

5A. SHARED CARE

Carer: $75k, 9 nights (+2)
Payer: $75k, 5 nights (-2)
Child ages: 10, 14

Time share | Hybrid | Income share

Nightly... $52.21 | $52.21 | $118
Annual... $2,722 | $2,722 | $6,133

New models produce sensible nightly support rate

5B. REGULAR CARE

Carer: $75k, 12 nights (+5)
Payer: $75k, 2 nights (-5)
Child ages: 10, 14

Time share | Hybrid | Income share

Nightly... $52.21 | $52.21 | $50.98
Annual... $6,806 | $6,806 | $6,645

Similar support levels under all 3 models

5C. NO PAYER CARE

Carer: $75k, 14 nights (+7)
Payer: $75k, 0 nights (-7)
Child ages: 10, 14

Time share | Hybrid | Income share

Nightly... $52.21 | $52.21 | $70.02
Annual... $9,528 | $9,528 | $12,778

New models maintain consistent nightly rate

Set 6: Child Support Targets

Lesson: Introducing a community-wide support target produces more sensible assessments. It contains payer support at high incomes. For the hybrid version, it allows for a measured boost in support for low-income carers.

6A. MEDIAN-INCOME PAYER

Carer: $50k, 11 nights (+4)
Payer: $75k, 3 nights (-4)
Child ages: 10, 14

Time share | Hybrid | Income share

Nightly $52.21 | $52.21 | $80.27
Annual $5,445 | $5,445 | $8,371

New models produce sensible nightly support rate

6B. HIGH-INCOME PAYER

Carer: $50k, 11 nights (+4)
Payer: $120k, 3 nights (-4)
Child ages: 10, 14

Time share | Hybrid | Income share

Nightly... $66.86 | $92.49 | $156
Annual... $6,972 | $9,645 | $16,230

Hybrid model gives boost to low-income carer

6C. VERY HIGH-INCOME PAYER

Carer: $50k, 11 nights (+4)
Payer: $150k, 3 nights (-4)
Child ages: 10, 14

Time share | Hybrid | Income share

Nightly... $76.62 | $107 | $195
Annual... $7,991 | $11,167 | $20,331

New models sensibly contain support

Share on Facebook Tweet this