Child Support Reform (New Formula and Other Measures) Regulations 2018

The regulation defines several terms that are foundational to its operation. The transition period is the period beginning on the commencement of the old regulations (1 January 2008) and ending at the end of 30 June 2008 (s 5). During this six‑month window, the Registrar made or amended administrative assessments using the pre‑2008 formula but also applied departure determinations, reviewed agreements and gave effect to court orders under the old Act. Those actions are called transitional departure determinations (made under subregulation 9(1) of the 2007 regulations), transitional administrative assessments (made under subregulation 7(1) of the 2007 regulations), and transitional agreements (child support agreements reviewed and determined binding under subitems 74(1) and (2) of Schedule 5 to the Act). The regulation uses the applicable formula (s 5), which means the formula that would apply under Part 5 of the unamended Assessment Act as if the 1 July 2008 amendments had come into operation at the commencement of the old regulations. This is a counterfactual test that allows the Registrar to work out what the child support rate would have been under the new formula had it been in force earlier.

The core of the regulation is the corresponding rights and obligations mapping tables in sections 8, 11, and 13. These tables translate old statutory concepts into new ones. For example, a variation of the “child support income amount” (old provisions) becomes a variation of “adjusted taxable income” (new provisions). The mapping is not perfect: some old concepts - such as varying the “child support percentage”, the “disregarded income amount of the carer”, or a factor under paragraph 54(1)(b) - have no direct counterpart in the amended Act. For those, sections 9 and 14 adopt a different approach: the determination is treated as varying the annual rate of child support to the rate payable on 30 June 2008. That notional rate then becomes the base for a CPI indexation mechanism. Under section 9(3), the amount is indexed annually on 1 July starting in 2009 using the highest March quarter CPI number for the 8 capital cities published by the Australian Statistician. The indexation is ratcheted: it uses the highest index number since 2008, not the most recent, so the amount can never decrease. If the Australian Statistician later substitutes a different index number for a quarter, the substitution is disregarded (s 9(5)), and if the index reference period changes, only numbers published in the new terms are considered (s 9(6)). The regulation also retains the old regulations definition but only for reference; the 2007 regulations are repealed in their entirety by Schedule 1.

The primary affected parties are liable parents and carers who had existing child support arrangements during the transition period that were subject to a Registrar‑made departure determination, a binding child support agreement, or a court order under the unamended Assessment Act. For these individuals, the regulation determines the legal basis and quantum of their child support obligations after 1 July 2008. A parent who, during the first six months of 2008, obtained a departure determination varying the “child support percentage” will now find that variation converted into a fixed annual dollar amount as at 30 June 2008, with automatic CPI increases each year. This affects not only the ongoing payment level but also the mechanisms for later variation: because the obligation is now treated as an annual rate under paragraph 98S(1)(a) of the amended Act, any future change must be sought under the new provisions, which may have different evidentiary thresholds and grounds compared with the old percentage‑based determination.

The Registrar (the Child Support Agency) is the main administrative actor required to implement the mapping. The Registrar must, when making or amending a transitional administrative assessment that is subject to a transitional departure determination or court order, ensure the assessment confers the same rights and obligations as if the old determination had been made under the equivalent new provision (ss 8, 13). For determinations with no equivalent, the Registrar must apply the CPI indexation steps (ss 9(3), 14(3)). This imposes a continuing compliance burden on the Agency to maintain records of the original determination, the rate as at 30 June 2008, and the indexation history. Errors in indexing could lead to incorrect assessments that may be difficult to correct retrospectively given the absence of a specific conversion review mechanism.

Witnesses required to attend under subsection 4(1) of the Act are also affected, though only in a minor way: they are entitled to expenses under Part 2. This provision is unlikely to be used frequently, but it protects any person (other than the payer or payee) who is summonsed or required to appear in proceedings under the Act. The scale references the High Court Rules as at the commencement of the regulation (20 March 2018), not the rules as amended from time to time. That may create a static entitlement that will eventually become outdated.

Practitioners advising parents with pre‑2008 child support arrangements must understand the mapping to advise on enforceability, variation rights, and the risk of automatic indexation increases. Accountants and compliance professionals dealing with a client’s long‑term child support obligations should verify whether any departure determination falls within section 9 (no direct counterpart) and therefore attracts the CPI ratchet, which may produce a rising real obligation over time even if the payer’s income or the child’s needs change.

The regulation imposes no new substantive duties on liable parents or carers. Instead, it preserves their existing rights and obligations by translating them into the language and structure of the amended Assessment Act. The key right for an individual subject to a transitional departure determination is the right to have that determination continue in effect after 1 July 2008, with the same legal force as if it had been made under the new law. For determinations listed in the mapping table at section 8, the determination’s effect is simply converted to the equivalent new provision. For example, a departure determination varying the “adjusted income amount” of the liable parent (old paragraph 98S(1)(b)) becomes a variation of the parent’s “child support income” (new paragraph 98S(1)(c)). The liable parent remains bound by the variation, but the conceptual basis shifts. The corresponding right is that the carer can still enforce the obligation under the amende​d Assessment Act using the new provision.

For determinations with no direct counterpart (section 9), the individual’s right is more attenuated. The original determination - say, one varying the “child support percentage” - is not maintained in its original form. Instead, it is converted into a determination varying the annual rate of child support to the specific dollar amount payable on 30 June 2008. The right is to have that rate recognised and indexed, but the original discretionary basis (a percentage of income, for instance) is lost. The liable parent loses the right to have future obligations automatically linked to income fluctuations; the carer loses the right to share in income increases. Both parties are then limited to seeking a new departure determination under the amended Act if circumstances change.

The Registrar has a duty under section 13, when giving effect to a court order made during the transition period, to ensure the made or amended administrative assessment confers the same rights and obligations as if the order had been made under the equivalent new provision. The phrasing “as far as practicable” (ss 13, 14(2)) gives the Registrar some latitude where exact equivalence is impossible.

The indexation mechanism in section 9(3) imposes a duty on the Registrar to calculate the new amount each 1 July using the highest March quarter CPI since 2008. The amount must be indexed in all cases where the determination falls within section 9; there is no discretion to waive or reduce the indexation. The liable parent’s obligation increases automatically, and the carer has a corresponding right to receive the higher amount. Because the indexation uses the highest quarter, the amount can only stay the same or rise, never fall, even if CPI declines. This creates a one‑way ratchet that is a systemic feature, not a bug.

The regulation itself does not contain penalty provisions. It operates as a transitional overlay on the Child Support (Assessment) Act 1989 and the Child Support (Registration and Collection) Act 1988, both as amended. Enforcement of any obligation preserved or created by the regulation is carried out under those Acts. A liable parent who fails to pay the child support assessed under a transitional departure determination or a converted rate is subject to the usual enforcement mechanisms: registration of the debt, late payment penalties, garnishment of wages or bank accounts, interception of tax refunds, and in extreme cases, imprisonment for contempt or failure to comply with a court order (under the Registration and Collection Act). The regulation does not alter those enforcement powers.

The only penalties that could be said to arise directly from the regulation are those implied by Part 2: the scale of expenses for witnesses is a protective provision, not a penalty. A person who fails to attend when required under subsection 4(1) of the Act faces penalties under that subsection (which the regulation does not set out). The regulation simply ensures that a person who does attend is compensated.

The practical enforcement risk for liable parents is that the automatic CPI indexation under section 9(3) may increase an obligation over time without any active review of the parent’s financial circumstances. If the indexed amount becomes unaffordable, the parent must apply to the Registrar for a new departure order under the amended Act - a process that carries its own evidentiary burden and administrative costs. Failure to apply leaves the parent exposed to enforcement for the inflated amount. Carers, on the other hand, have the right to enforce the indexed amount even if the original basis of the departure determination (such as a percentage of income) would have yielded a lower figure in a given year.

The regulation also preserves the legal effect of court orders made during the transition period. If a parent was subject to a court‑ordered variation of the “child support percentage” under the old Act, section 14(2) turns that into an order varying the annual rate to the 30 June 2008 rate, with indexation. Enforcement of that rate can proceed under the amended Act. There is no penalty for the Registrar failing to correctly index, but an individual could seek judicial review if the Registrar misapplies the formula, leading to a higher debt that is then enforced.

This regulation is made under the Child Support Legislation Amendment (Reform of the Child Support Scheme,New Formula and Other Measures) Act 2006 and sits within a network of statutes. The two primary Acts it interacts with are the Child Support (Assessment) Act 1989 (as amended by the Act and the Consolidation Act - the Families, Community Services and Indigenous Affairs Legislation Amendment (Child Support Reform Consolidation and Other Measures) Act 2007) and the Child Support (Registration and Collection) Act 1988 (similarly amended). The definitions section (s 5) refers to the “amended Assessment Act” and “amended Registration and Collection Act” as the versions in force on or immediately after 1 July 2008. The regulation bridges the gap between the unamended versions (in force during the transition period) and the amended versions.

The regulation also interacts with the old regulations - the Child Support Reform (New Formula and Other Measures) Regulations 2007 - which it repeals in Schedule 1. The 2007 regulations had made similar transitional provisions but were partially repealed by the Tribunal Legislation Amendment (Amalgamation) Regulation 2015, which deleted subregulations 7(1) and 9(1). This left a gap regarding transitional departure determinations and administrative assessments. The 2018 regulations restore the substance of those repealed provisions, but in a stand‑alone instrument that avoids reliance on the revoked subregulations. Notes in sections 5, 7 and 9 alert readers to the repeal of the old provisions.

The CPI indexation provisions in sections 9 and 14 incorporate the Consumer Price Index as published by the Australian Statistician. The provisions include rules for handling index number substitutions and index reference period changes, which aligns the regulation with standard Commonwealth drafting for automatic indexation. The reference to the High Court Rules in section 6 for witness expenses means that if the High Court rules change after 20 March 2018, the scale in this regulation does not automatically update - it remains fixed to the rules as at that date. That is a potential source of under‑compensation over time.

The regulation does not interact with state family law, because child support is a Commonwealth matter. However, court orders made under the Family Law Act 1975 that deal with child support are relevant to Part 5: the Registrar must give effect to a court order under section 118 of the unamended Assessment Act (which refers to orders made under the Family Law Act). The mapping in section 13 translates those old court orders into the new framework. The regulation also implicitly interacts with the Administrative Appeals Tribunal’s jurisdiction: because it merely preserves existing determinations and does not create new review rights, any challenge to the converted obligation would need to be brought under the amended Assessment Act’s departure provisions or through the courts.

The Child Support Reform (New Formula and Other Measures) Regulations 2018 was made on 15 March 2018 and registered on the Federal Register of Legislation on the same day. It commenced on 20 March 2018, the day after registration (s 2). The instrument is a re‑enactment of the earlier Child Support Reform (New Formula and Other Measures) Regulations 2007, which it repeals in full under Schedule 1. The original 2007 regulations had been in force since 1 January 2008. During their life, they were partially affected by the Tribunals Amalgamation: the Tribunal Legislation Amendment (Amalgamation) Regulation 2015 repealed subregulations 7(1) and 9(1) of the 2007 regulations. Those subregulations were critical because they empowered the Registrar to make transitional administrative assessments (subreg 7(1)) and transitional departure determinations (subreg 9(1)). Their repeal created an anomaly where references in the remaining provisions to those subregulations had no operative source. The 2018 regulations remedy this by re‑enacting the transitional scheme in a new instrument that does not incorporate the repealed subregulations. Instead, it defines the transitional concepts directly - “transitional administrative assessment” and “transitional departure determination” refer to assessments and determinations that were in force during the transition period under the old regulations, regardless of the repeal of the empowering provisions.

The 2018 regulations have not themselves been amended (based on the source text). However, the CPI indexation formula in sections 9(3)-(6) requires the Registrar to apply index numbers published from time to time, which means the obligations under section 9 determinations will change each year without the need for further regulatory amendment. The instrument is not time‑limited; it continues in force indefinitely, presumably until all transitional determinations and court orders from the 2008 changeover have been exhausted or varied under the new scheme. That could be decades, because a departure determination made in June 2008 for a child aged 10 would still be in place (carrying indexed obligations) until the child turns 18 and the assessment ceases. There is no sunset clause in the instrument.

The source text does not mention any specific litigation concerning this regulation. Because the instrument is not itself a primary statute and largely performs mechanical mapping, it is unlikely to have been the subject of direct challenge. However, an astute reader should note the litigation context of the underlying scheme. Between 2008 and 2018, there were numerous cases in the Federal Circuit Court and Family Court regarding child support departure determinations and the interpretation of the “child support income” and “adjusted taxable income” concepts introduced by the 2006-2008 reforms. Some of those cases would have involved transitional determinations caught by this regulation, but the regulation’s function is merely to preserve the status quo; it does not create a new cause of action.

A potential litigation risk is that a parent might argue that the conversion under section 9 (where a percentage‑based determination is converted to a fixed annual rate with indexation) is ultra vires the Act or exceeds the scope of the regulation‑making power. The regulation is made under the Act, and the Act’s provisions allow for transitional regulations. The High Court’s approach to transitional provisions generally permits reasonable adaptations, but a parent could claim that converting a percentage of income to a fixed dollar amount changes the substantive character of the original court order or departure determination, thereby exceeding the “corresponding rights and obligations” mandate. No such challenge is recorded in the source, so it remains a theoretical risk.

Another avenue for litigation is the indexation formula itself. The use of the “highest March quarter index number” (a ratchet) is unusual and could be challenged as arbitrary or as exceeding the requirement to merely maintain the value of the amount. A court could find that the ratchet is not required by the Act and that the regulation‑maker acted on an incorrect understanding. Again, no case is cited.

For practitioners, the safest course is to treat the mapping as presumptively valid but to be aware that the conversion under sections 9 and 14 (determinations and court orders with no direct counterpart) extinguishes certain rights (e.g., the right to have an obligation tied to income). That extinguishment could form the basis of an application for judicial review, particularly if the parent was not given notice of the conversion.

Several traps exist within this regulation that a practitioner or parent might miss. The most significant is the CPI indexation ratchet in section 9(3). The amount is indexed by dividing the “highest March quarter index number” (including the base quarter, March 2008) by the base index number. This means each year the amount is multiplied by a factor that can never be less than 1. If March 2008 CPI is 100, and March 2009 CPI falls to 98, the highest index remains 100, so the amount stays the same. If March 2010 rises to 102, the highest becomes 102, and the amount is multiplied by 1.02. If CPI then falls to 100 again, the highest is still 102, so the amount remains at the higher level. Over a decade, this ratchet can produce a substantial real increase in obligations, far outstripping actual inflation or the payer’s income growth. There is no provision for downward adjustment, even if the original basis for the departure determination (such as a child’s special needs) no longer applies.

Another trap is that determinations with no direct counterpart lose their original character. A parent who agreed to a departure order varying the “child support percentage” (e.g., from 18% to 25% of the payer’s income) will, after the conversion, be bound by a fixed annual rate based on the income at June 2008. If the payer’s income later drops significantly, the carer will still be entitled to the indexed amount, because it is now a rate, not a percentage. The parent cannot argue that the percentage should apply to the lower income; the only recourse is to seek a new departure order.

The scale of expenses in Part 2 is fixed to the High Court Rules as at 20 March 2018. Those rules are periodically updated, but the regulation does not update automatically. A witness attending proceedings in 2028 would still receive only the 2018 scale, which will likely be inadequate. This exposes the witness to a cost burden that the regulation was meant to cover.

The transitional agreement mapping in Part 4 (section 11) only applies to agreements that were reviewed and determined binding by the Registrar under subitems 74(1) and (2) of Schedule 5 to the Act during the transition period. Any agreement that was not so reviewed (even if it was otherwise binding) does not get the benefit of the mapping. That could leave some pre‑2008 agreements in a legal vacuum, where neither the old nor the new Act clearly governs them.

Finally, the regulation does not provide a mechanism for a parent to challenge the conversion itself. The only review avenue is under the amended Assessment Act’s departure provisions (section 98S), which require a change in circumstance or a special ground. A parent cannot simply argue that the conversion produced an unfair result. This lack of transitional review rights is a significant gap for individuals affected by sections 9 and 14.

Compliance with this regulation is largely passive for individuals. The Registrar handles the mapping and indexation automatically. However, there are steps a liable parent or carer should take to protect their position. First, establish whether you have a transitional departure determination, transitional agreement, or court order from the transition period (1 January 2008 to 30 June 2008). The original determination or order should state the provision under which it was made (e.g., paragraph 98S(1)(b) of the unamended Assessment Act). Use the mapping tables in sections 8, 11, and 13 to determine which new provision it corresponds to. If your determination falls under section 9 (column 1 items such as varying the child support percentage or disregarded income amount), note that your obligation is now expressed as a fixed annual rate as at 30 June 2008, with automatic CPI indexation each 1 July.

Second, obtain the Registrar’s current assessment for the child support period. The assessment notice should show the current rate. Compare it with the original 30 June 2008 rate multiplied by the CPI indexation factors for each year. Because the indexation uses the highest March quarter CPI, the calculation is not straightforward. You may need to request the Registrar’s indexation history or calculate it yourself using ABS data. If the Registrar has applied the wrong factor, you can request a correction under section 74 or 75 of the amended Assessment Act (objection rights). If the error is not corrected, you may apply to the Administrative Appeals Tribunal or a court.

Third, consider whether the converted obligation remains appropriate. If the original departure determination was intended to be temporary or tied to a specific need that no longer exists, the conversion to a permanent indexed rate may be unfair. In that case, either parent can apply for a new departure order under the amended Act. Section 98S of that Act allows a court or the Registrar to vary a child support assessment if there are special circumstances. The parent must show that the current obligation is unjust and inequitable. The fact that the conversion under section 9 altered the character of the original determination may itself be a special circumstance, though it is not guaranteed.

Fourth, if you are a party to a binding child support agreement from the transition period, verify that the Registrar treated it as a transitional agreement under Part 4. If the agreement was not reviewed and determined binding by the Registrar under the specific schedule items, it may not be recognised by the regulation. In that case, you may need to enter into a new agreement under the amended Act or rely on the default formula.

For practitioners, compliance means advising clients to dig out old documents from 2008, checking the exact wording of the departure determination or court order, and cross‑referencing it with the mapping tables. Practitioners should also monitor the CPI indexation each year to ensure the Registrar’s calculations are correct. Given the ratchet effect, payers in particular should be alert to the possibility that the indexed amount will grow faster than their income, and should proactively seek a variation if the obligation becomes unaffordable. The regulation itself does not require any filing or reporting; compliance is about awareness and, where necessary, recourse to the amended Act’s variation provisions.