Child Support (Changing from 01/04/2015)

A new formula will be used to calculate child support from 1 April 2015 that assesses child support for a "child support group".

A child support group is one where children have the same parents. Thus, in your case, you have two: child support groups”

2015 new child support formula:

• Taxable income of both parents will be included in the formula calculation. (making it fairer)
• A living allowance is a set amount to recognise that parents need to be able to support themselves. From 1 April 2015, the living allowance will not include an amount for new partners.
• Dependent child allowance is an allowance for children in your care that you are the parent of, and for whom child support is not paid or received.
• The multi-group allowance is an allowance provided to parents who have multiple child support assessments with different parents. It ensures you are able to provide support to all the children that child support is calculated for.
• The new formula recognises there are costs associated with caring for your children and that the more care you have of a child, the more your expenses will. The Care Cost Table.
• Child expenditure table: The new formula uses a “child expenditure” table to calculate the dependent child allowance, multi-group allowance and the child support assessment. The Child Expenditure table
• Income
• Child’s living circumstances
• Amount of time caring for child
• Your living allowance amount, and
• Any relevant dependent child allowance, and
• An amount called “a multi-group allowance” from your taxable income

Thus, the new child support scheme makes it fair to focus on:

To work out the cost to raise children (teenager will cost more)

Work out child support for parents with two or more child support groups: The Inland Revenue will deduct:

Multi-group allowance’s calculation:

1. Take your taxable income
2. Deduct your living allowance
3. Deduct any dependent child allowance(s)
4. The income used to calculate the multi-group allowance
5. Add both parents’ child support incomes together to get a combined child support income.
6. They divide each parent’s individual child support income by the combined child support income to get an income percentage
7. They work our each parent’s care percentage of the child by using the Care Cost Table.
8. Subtract the cost percentage (Step 7) from the income percentage (step 6) for each parent. The result is called the “CS percentage”

After that, we can use the basic formula.

For example: Your earn 60,000 a year (step 1). After deducting your living expenses, your child support income for calculating the multi-group allowance is 40,000 (step 2). You have two children: Adam 11 and Simon 15 years old.

For Adam, to calculate the multi-group allowance, you will use table 1 in the Child Expenditure Table.

The calculation: 6,631+ ((40,000-27,631)*23/100)=9475.9/2=4737.9

For Simon, to calculate the multi-group allowance, you will use table 2 in the Child Expenditure Table.

The calculation: 8,013+ (40,000-27632)*28/100)=11,475.76/2=5737.88 (step 4)

For Adam

The child support income is: 40,000-5737.88=34262.12

Assume that the combined child support for Adam is 50,000 which is 68.52% income contribution from you and 31.48% income contribution from the mother (Step 5)

Also assume that the child lives with his mother, your care cost contribution will be Zero.

Thus, you are liable to pay for the mother to support for Adam.

The combined child support’s calculation: 6,631+ ((50,000-27,631)*23/100)= 11,775.87= 5887.94

 Your contribution should be: 5887.94*68.52/100=4034.41 (Step 9)

Because it is less than the Multi-group Allowance for Adam ($4737.9), his contribution will still be $4432.41 as calculated before.

For Simon

The child support income is: 40,000-4737.9= 35262.1

Assume that the combined child support for Adam is 40,000 which is 88.16% income contribution from you and 11.83% income contribution from the mother (Step 5)

Also assume that the child lives with his mother, your care cost contribution will be Zero.

Thus, you are liable to pay for the mother to support for Simon.

The combined child support’s calculation: 8013+((40,000-27,631)*28/100)= 11476.32/2=5738.16

Your contribution should be: 5738.16*88.16/100=5058.76

Your total child support payment= $9093.17

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