Fixed Annual Rate - FAR

• Fixed annual rate


  A prescribed amount paid per child, for up to 3 children in an assessment if: the parent did not receive an income support payment in the last relevant year of income, that parent's ATI (actual or estimated) for the last relevant year of income is less than the parenting payment (single) maximum basic amount, and that parent has less than shared care of the child (less than 35% care)
• The fixed annual rate addresses situations where a parent minimises their taxable income in a way that does not fairly represent their real capacity to pay child support, and thereby reduce or avoid the contribution they should make towards meeting the costs of their children
• If a parent is genuinely on a low income, they will usually access social security or other income support payments
• A parent is able to apply to the Registrar to have the fixed annual rate not be used
• If an application to have the fixed annual rate not be used is refused and the parent believes that their assessment is unfair for other reasons, they may wish to consider applying for a change of assessment
• How the fixed annual rate is calculated where a parent is liable for more than 3 children

  Amount for each child = 3 × fixed annual rate ÷ total number of children for whom child support is payable by the parent
• Paying the fixed annual rate for a child to more than one person

  Total rate that the parent and non-parent carers are entitled to be paid for the day × (parent's or non-parent carer's cost percentage for the child ÷ total of parent's and non-parent carer's cost percentage for the child)
• Calculating the amount of child support to be transferred when the parent assessed to pay a fixed annual rate is also entitled to receive child support in a case


  The fixed annual rate amount payable by a parent in relation to the child is subject to any offsetting of amounts calculated as payable by the other parent before the final amount payable by the first parent is determined
• Applying for the fixed annual rate to not be used

  The parent making the application must provide evidence that: their current income (not ATI) is no more than the relevant parenting payment (single) maximum basic amount, and it would be unjust and inequitable to expect them to pay the fixed annual rate
• Current income


  Generally the parent's income for the 12-month period from the date of the application
• An income tax assessment for the last relevant year of income will not be sufficient evidence of the parent's income as the Registrar must use the definition of income in CSA Act section 66A(4) to determine if the parent's current income is no more than the relevant parenting payment (single) maximum basic amount
• Exclusions to the definition of income in CSA Act section 66A(4)

  • Amenity allowances or gratuities paid to prisoners
  • Disability support pensions, pensions paid to veterans who are totally and permanently incapacitated and Special Rate Disability Pension for veterans, where at least 85% of the pension is paid to another person for the provision of ongoing care to the pension recipient
  • A National Disability Insurance Scheme (NDIS) amount
  • Payments of 'redress' within the meaning of the National Redress Scheme for Institutional Child Sexual Abuse Act 2018
• Money


  Includes coins and bank notes, cheques and deposits into bank accounts (but not goods, services, or some other benefit, even if the payment is capable of being valued in money terms), is 'earned' when it is received in return for labour or service, in compensation or as profit, is taken to be 'derived' in accordance with ordinary business and commercial principles including capital payments, trust distributions and royalties, is taken to be 'received' when it comes into a person's possession
• National Disability Insurance Scheme (NDIS) amount

  As defined in the National Disability Insurance Scheme Act 2013
• Payments of 'redress'


  Within the meaning of the National Redress Scheme for Institutional Child Sexual Abuse Act 2018
• Money


  Includes coins and bank notes, cheques and deposits into bank accounts (but not goods, services, or some other benefit, even if the payment is capable of being valued in money terms)
• Money is 'earned'


  When it is received in return for labour or service, in compensation or as profit
• Money is 'derived'


  In accordance with ordinary business and commercial principles including capital payments, trust distributions and royalties
• Money is 'received'


  When it comes into a person's possession (This covers most money which comes into a person's hands including capital payments, for example, a tax refund, Lotto wins, lump sum compensation, profit from the sale of an asset, deposits into a joint bank account)
• Money must be received

  For the person's own use or benefit (Income received by a person in another capacity is not included)
• Money not received for own use or benefit


  • A trustee does not receive trust funds for their own use or benefit
  • A partner only receives money for their own use or benefit when the person receives their individual share of the partnership profit
• Net income


  Only net income is considered. The Registrar will deduct the person's expenses (that would be recognised for taxation purposes) that directly relate to them earning the particular type of income from their gross income.
• Paper expenses


  Such as depreciation of property or assets, or carried forward losses, should not be deducted as they are not considered to relate directly to earning the income and do not reduce cash flow
• Discretionary expenses


  If expenses claimed are discretionary (for example, repairs to a rental property), the Registrar must be satisfied that they were necessary before they will be deducted from the parent's income
• Discretionary expenses


  • The landlord of a rental property should be able to show that the property would not have been let if the repairs claimed were not carried out
• Losses from one source

  Will not be deducted from income from another source
• Calculating income


  • A liable parent has an ATI of $14,300, employment income $14,300, superannuation pension $5,000 (not taxable), lotto win $1,700, loss from share investments $4,000. The loss from the share investments is not taken into account, only net income from each source is considered, and losses are not offset against other income. The parent's income is $21,000 ($14,300 + $5,000 + $1,700).
• The superannuation pension and the lotto win (both non-taxable income) have been included in calculating the income for CSA Act section 66A(4) purposes
• The parent's application for the fixed annual rate to not be used will not be granted as the total income exceeds the relevant parenting payment (single) maximum basic amount ($23,800 in 2023)
• Noor's application for fixed annual rate to not apply

  • Noor has regular care of the children, and is therefore contributing to the cost of the children, so the minimum rate of child support (CSA Act section 66) does not apply. Noor is not required to pay child support for Florinda and Petra.
• Justina's application for fixed annual rate to not apply

  • Justina has an ATI of $10,000 and receives goods, services or benefits with a significant annual value through the business. The Registrar decides that Justina's income of $10,000 does not fairly represent Justina's real capacity to pay child support, and that it is not unjust and inequitable to require Justina to pay the fixed annual rate. Justina's application is, therefore, refused.
• Adam's application for fixed annual rate to not apply

  • Adam has an ATI of $10,000 and receives a superannuation pension (not taxable) of $15,000. As Adam's current income of $25,000 is more than the relevant parenting payment (single) maximum basic amount the application must be refused.
• Decision on application


  The Registrar must first be satisfied that the parent's current income is no more than the relevant parenting payment (single) maximum basic amount, before granting the application. If the parent's current income is more than the relevant amount, the application must be refused (CSA Act section 65B(4)).
• Unjust and inequitable


  If the parent's current income is no more than the relevant amount, the Registrar must also be satisfied that it would be unjust and inequitable to expect the parent to pay the fixed annual rate (CSA Act section 65B(4)).
• Determining unjust and inequitable

  The Registrar will consider whether the parent's income accurately reflects their real capacity to pay child support, including whether the parent receives goods, services or benefits which mean that their current income is not an accurate representation of their financial position.
• Effective date of determination

  If an application is granted, the Registrar will specify the day on which the fixed annual rate ceases to apply to the parent (CSA Act section 65B(5)). In most cases, the Registrar will specify that the determination will apply from the first day in the child support period on which the fixed annual rate was payable. However, if making a determination that the fixed annual rate will not apply from the beginning of the child support period would create an overpayment for the payee, generally the Registrar will specify that the determination will apply from a date after the start of the child support period, for example, the date the application was made.
• Partial period


  If the fixed annual rate applies to only part of the child support period (for example, where the parent lodged an estimate of income after the beginning of the child support period), the determination not to apply a fixed annual rate will not apply to the earlier part of the child support period.
• Notification of refusal


  When the Registrar refuses to grant the application, the unsuccessful applicant must be notified in writing (CSA Act section 66C). That person can then object (4.1.2) to the particulars of the assessment.
• Amending assessment


  If after a determination for the fixed annual rate to not be used has been made, the Registrar may amend the assessment to apply the fixed annual rate, if the parent no longer meets the conditions for the determination that the fixed rate not apply (CSA Act section 66B(b)).
• Amending assessment


  • Magdalena was assessed to pay the fixed annual rate, then made an application for it not to be used. A determination was made that the fixed annual rate not be used from the start of the child support period. Three months later, the Registrar became aware that Magdalena had always been working and the information provided was inaccurate. As Magdalena's current income is in fact more than the relevant parenting payment (single) maximum basic amount, she does not satisfy the requirements. The Registrar amends the assessment under CSA Act section 66B to reinstate the fixed annual rate from the start of the child support period.