Can I depart from a formula assessment for child support?

Deciding on which child support arrangement you and your co-parent want to have can be difficult, especially if communication between parents is not easy.

If you wish to find out more about child support arrangements generally, please see our article here. 

A formula assessment is a child support arrangement that is determined by the Inland Revenue Department. It is formal in the sense that it is recorded and enforced by the IRD.

When calculating child support payments, the IRD may consider each parent’s income and expenses, who cares for the child and the expenses of caring for the child.

However, if a parent is no longer happy with the child support payments under the assessment, the formula assessment can be departed from in some circumstances.

Under the Child Support Act, a parent can request to depart from a formula assessment. In order to do this, the parent must first apply to the IRD for “departure”.

If the IRD refuses to make a decision or the parent is unhappy with the decision made, the parent can then apply to the Family Court for a “Departure Order”.

The IRD and the Court look at the same factors when deciding whether a departure is appropriate. When determining whether to allow departure, the IRD and/or the Court must be satisfied that one of the grounds of departure apply.

Grounds for departure include that a parent’s financial capacity has significantly reduced because of special circumstances such as:

• The parent is responsible for another child or person; or
• The parent is responsible for another child or person with special needs; or
• Commitments that are required to support the parent, a dependent child or other person.

Grounds for departure also include significantly higher costs of care caused by:

• Enabling contact with the child and the other parent; or
• The child has special needs; or
• Special care or education arrangements are expected for the child.  

The IRD and/or the Court will also consider circumstances involving money or property, such as income capacity or financial resources. They may also consider whether the parent has any “re-establishment costs” following their separation.

If one of the grounds for departure is found, the Court must also determine whether the departure would be “just and equitable” and “otherwise proper”, for both the parents and the child. When determining whether the departure would be just and equitable, the Court must account for the above factors.

The purpose of the IRD and/or the Court when considering a departure is to determine the true financial ability of the parent to pay child support, which may include looking into the parent’s interests in a trust, company or other structure.

If the IRD or the Court is satisfied that at least one of the above grounds is met, and that departure is just and equitable and otherwise proper, they may order departure from the formula assessment.

It is important to be aware of your rights in terms of child support arrangements. If you are confused about these rights or wish to change your child support agreement, it pays to seek advice from a professional with experience in the area.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.

Gianna Menzies and Hunter Flanagan-Connors