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Child Support (AU)

Overview

Child support is money paid by parents who are not living with their children to help support those children financially. Parents are able to request that these deductions are made from their salary and wages, and Department of Human Services will send you a Letter, entitled ‘Schedule of Child Support Deductions’ or ‘Notice Pursuant to Section 72A’, advising when the Child Support payments are to start and the amount or percentage to be paid. Human Services will send additional notices when the amount or percentage needs to be adjusted or stopped.

To make sure you don’t deduct all of an employee or contractor’s wages for Child Support payments there is a Protected Earnings Amount (PEA), which is the amount that must be left after tax and Child Support is deducted. The PEA is the amount of an employee or contractor’s wages that are exempt from Child Support deductions.

For further information on Employer's Responsibilities in relation to Child Support, refer to the Department of Human Services website http://www.humanservices.gov.au/business/services/child-support/child-support-information-for-employers/

Deduction setup

It is recommended that Child Support deduction record be configured as follows:

  • Type: D. Standard Deduction (mandatory)
  • Taxable: No (mandatory)
  • Rank deduction and Rank: Use ranking to ensure that the statutory Child Support transaction is created before other deductions are made. Ranked deductions are made before unranked deductions. We recommend setting Rank to '01'.
  • Minimum nett pay: Blank.
  • Direct credit: No
  • Full amount only: No
  • Calculation method: F. Fixed amount or P. Percentage of gross
  • Deduction class: L. Child support standard OR R. Child support garnishee (mandatory)

Permanent Transaction

For each employee that DHS has provided a Child Support Deduction Notice create a permanent deduction transaction record. Enter the Begin date on the Effective Dates tab, to ensure the Child Support is deducted only when instructed on the letter.

See also