Introduction
Q1: If I have heavy debts, will the court still order me to pay extra child support like private school fees?
A: Real, significant debts must be considered, but they do not automatically excuse you. The court weighs whether your debt is genuine and necessary against your duty to support the children, and ignoring a substantial verified tax debt is grounds for appeal. Reference: Yanda & Jacome [2023] FedCFamC1A 116
Q2: If my ex inherited a large estate but their salary stays low, can I still ask for higher child support?
A: Yes. An inheritance counts as a financial resource and qualifies as special circumstances under section 117(2)(c)(ia) of the Child Support (Assessment) Act 1989, so the court can order your ex to draw down on capital to support the children. Reference: Beard & Fisher [2013] FCCA 755
Q3: Can the court force a wealthy parent to pay private school fees they say they never agreed to?
A: If both parents jointly enrolled the child and signed the fee agreement during the marriage, the court is likely to keep the parent paying. Withdrawing consent only after separation rarely escapes the obligation. Reference: Blatch (No 5) [2022] FedCFamC1F 651
What is a Change of Assessment under Australian child support law?
A Change of Assessment is when the court or a Services Australia officer departs from the standard administrative formula because the formula does not produce a fair result. The formula uses each parent's recent taxable income and the basic care percentage, but it cannot see hidden wealth, capital sitting in an inheritance, large debts, or special expenses like private school fees.
Section 117(2) of the Child Support (Assessment) Act 1989 lists 10 grounds for departure. Three of them carry most of the weight when one parent is asset-rich, income-poor, or facing claims about private schooling:
- Reason 8 (s 117(2)(c)(ia)) covers the situation where the income, property, or financial resources of either parent are not adequately reflected in the assessment.
- Reason 8 alternative (s 117(2)(c)(ib)) covers earning capacity. If a parent could earn far more than they currently choose to declare, the court can lift the assessment to match.
- Reason 3 (s 117(2)(b)(ii)) covers the high costs of caring for, educating, or training the child in the manner that was expected by his or her parents. This is the gateway for private school fee claims.
Before making the order, the court applies a three-step test:
- One of the 10 grounds must apply. For example, the paying parent has hidden financial resources, or the child has expensive but reasonable schooling needs.
- It must be just and equitable. The order should be fair to both parents and the child.
- It must be otherwise proper. The order has to fit with the purpose of the Act.
In Beard & Fisher [2013] FCCA 755, the father argued that only his $30,000 declared income should count, not the $850,000 inheritance sitting in his account. Judge Small refused that framing.
This reveals a fundamental misunderstanding of the provisions of s.117(2)(c)(ia), which clearly states that the financial resources of a parent, as well as that parent's income, are to be taken into account when assessing child support liability.
Core Point: A Change of Assessment lets the court look past taxable income to a parent's true financial position, including capital, financial resources, and earning capacity.
Why does it matter to assess a parent's true financial position?
Because the formula misses too much when one parent is asset-rich and income-poor. If you only look at last year's tax return, three things can go wrong.
- Children miss out on what their parents could afford. A parent with $1.5 million in property and $40,000 declared income looks the same on the formula as a barista on $40,000 with no other assets.
- Wealthy parents can hide behind low taxable income. Self-employed parents, business owners, and trust beneficiaries can compress their declared income without changing how they actually live.
- The other parent shoulders disproportionate cost. If one parent earns $80,000 and the other has $2 million in assets paying $25,000 a year in dividends, the formula will not protect the working parent who ends up carrying private school fees alone.
The father reported that he was unemployed from 2006 onwards, and his administrative assessment dropped to the minimum. Yet during the same period he travelled overseas with a partner, bought rural land, and serviced mortgage repayments of around $3,600 per month against $680,000 he had borrowed against two properties.
The father insisted he had no capacity to pay because he had no job. The mother pointed to his ability to keep buying property and travelling, plus the roughly $100,000 of equity that would come back to him if he sold the rural land.
Outcome: The court ordered a lump sum payment, finding that the father's borrowing history and asset base showed real capacity to pay. The administrative formula had been hiding this from view because it only looked at his salary income.
Lindsay FM's reasoning made the principle plain:
He has had a significant capacity to borrow money in the recent past and an extension of his current loan liability with the St George Bank is certainly something he should pursue if so minded.
Key Point: The court can infer capacity to pay from a parent's history of borrowing, spending, and lifestyle, even when their tax return says they earn very little.
How does the court treat debts, inheritance and school fees?
The answer is scenario-specific. The court runs the same three-step test in every case, but the weight of debts versus the weight of resources varies depending on the type of debt, the type of resource, and the type of expense the receiving parent is asking for. Three patterns recur in the case law.
What if the paying parent has heavy debts?
Common Misconception: My debts mean the court will not make me pay extra child support.
Legal Truth: Real, significant debts (especially established tax debts) must be considered when the court assesses your capacity. But the duty to maintain your children takes priority over personal or discretionary debts.
In Mancuso & Abbott [2012] FMCAfam 289, the father held trust funds from a property sale and tried to argue that his $17,260 ATO debt, $5,101 car loan, and a claimed $25,206 owed to his parents should be paid first. Phipps FM rejected the argument.
s.3 of the Child Support (Assessment) Act 1989 (Cth) says that parents of a child have the primary duty to maintain the child and that has priority over all other commitments of the parent other than commitments to enable the parent to support himself or herself or any other child that the parent has a duty to maintain.
The inverse is also true. If a trial judge ignores a substantial, established debt, that is appellable error. That is exactly what happened in Yanda & Jacome.
The father was a doctor with a Financial Statement showing roughly $174,626 in tax liability, repayable by April 2023. His weekly income was about $7,000 and his disclosed weekly expenses (excluding child support) were $5,422, leaving a surplus of roughly $1,600 per week before the tax debt was taken into account. The mother applied for non-periodic child support of $1,044 per week to cover private school fees on top of the existing administrative assessment.
The trial judge ordered the father to pay the entire fees. While she made findings that the tax debt must be considered, her reasons did not explain how she had factored that debt into capacity. The father appealed.
Outcome: Appeal allowed. On appeal, Riethmuller J found that ignoring the tax debt was an error of law. Once the $118,896.65 outstanding tax debt was properly weighed against the $1,600 weekly surplus, that surplus disappeared and the father had no present capacity to pay the school fees. The order was set aside.
Riethmuller J spelled out the reasoning:
The primary judge's reasons do not disclose why the husband's tax debt was not taken into account. If the tax debt is taken into account, it appears that the husband has no present capacity to meet the school fees.
| Comparison | Mancuso & Abbott [2012] | Yanda & Jacome [2023] |
|---|---|---|
| Type of debt | ATO debt + personal car loan + alleged loan from parents | $174,626 verified ATO tax debt due in months |
| Was duty to children prioritised? | Yes, duty to children took priority | Debt must be weighed first |
| Outcome | Lump sum ordered from trust funds | School fee order set aside on appeal |
Key: The court distinguishes between debts that are real, large, and tied to verifiable obligations (like an ATO assessment with a fixed payment date) and debts that look discretionary or unsupported (like vague intra-family loans). The duty to maintain children remains paramount, but the court will not order a parent to pay what they truly do not have.
What this means for you:
- If you are the paying parent, document your debts properly. Bank statements, ATO notices, repayment schedules, and amortisation tables work. Vague claims do not.
- If you are the receiving parent, scrutinise debts that look manufactured for litigation. Ask for primary documents in disclosure.
- Either way, separate self-support and child-support debts from discretionary debts (consumer loans, second car finance, business expansion debts).
What if a parent receives an inheritance?
Common Misconception: An inheritance is a one-off gift. It is not income, so it does not change my child support.
Legal Truth: An inheritance is a financial resource. Under section 117(2)(c)(ia) it constitutes special circumstances, and the court can order you to draw down on capital to support your children.
The leading case is Beard & Fisher [2013] FCCA 755.
The father inherited cash and shares worth more than $850,000 from his late mother's estate in 2009. By 2013, around $640,000 of the inheritance still remained. He had stopped formal employment and declared annual income of just $30,000, which he sourced from interest on the inherited capital and some partial drawdowns.
The mother applied for a Departure Order. The father argued the inheritance was personal property, not income, and that he should not have to spend it on child support beyond what the formula required.
Outcome: Departure Order made. The court found his $30,000 declared income alone produced an unjust assessment and ordered him to pay child support drawn from the inheritance capital, on the basis that the remaining $640,000 was a financial resource within s 117(2)(c)(ia).
Archer & Archer [2013] FCCA 226 reinforces the principle at a smaller scale. There the inheritance was $161,212, far less than the inheritance in Beard & Fisher, and the SSAT (now part of the AAT) still classified it as creating special circumstances. The principle does not turn on a particular dollar threshold.
What this means for you:
- If your ex inherits, you can apply for a Change of Assessment even if their salary stays the same. The size of the inheritance is what counts.
- Capital can be drawn down. The court is willing to make orders that erode the principal of an inheritance, not just its income stream.
- Document the existence of the inheritance through probate searches, will copies, share registries, or land title checks. A formal request for disclosure is your starting point.
What if a wealthy parent refuses to pay private school fees?
Common Misconception: Private school is a luxury. If I never agreed to it, I do not have to pay.
Legal Truth: The court looks at the parents' historical intentions and the paying parent's capacity. If you and your ex jointly enrolled the child and signed the fee agreement during the marriage, withdrawing consent after separation will not usually escape the obligation. The court can also make non-periodic orders that go beyond the administrative assessment.
The discretion comes from Division 5 of Part 7 of the Child Support (Assessment) Act 1989, particularly sections 123 and 124. In Yanda & Jacome [2023] FedCFamC1A 116, Riethmuller J confirmed on appeal that non-periodic orders for items like private school fees can be made on top of the periodic assessment, rejecting an earlier narrow reading from Ryan & Ryan [1994] FamCA 175 that tried to cap such orders at the formula amount.
The leading case on enrolment intention is Blatch (No 5) [2022] FedCFamC1F 651.
It is not in dispute that the parents both signed the applicable documents to enrol the children in their current school and that they both intended, during the marriage, for the children to attend that school. ... It was only after the parents separated that the father wrote to the school stating that he did not intend to continue to pay the school fees.
The husband and wife jointly signed enrolment documents for both daughters at a private school. X had attended since Year 3, and Y was enrolled in November 2018, shortly before the parents separated. The signed documents included an express agreement to pay Y's fees. Both children continued to attend after separation.
The father then wrote to the school saying he would no longer pay. He was receiving roughly $5,135 per week and had disclosed weekly expenses of around $3,808 (excluding child support), giving him a clear surplus.
Outcome: Rees J ordered the father to pay $186,238 as a lump sum credit against child support, plus continuing tuition fees. The court found it just and equitable and otherwise proper given the parents' joint enrolment decision and the father's surplus capacity.
Not every claim against a child-related fund succeeds. In Bass & Bass and Anor [2016] FamCAFC 64, the father had previously settled $350,000 into a Child Support Trust by consent orders, earmarked for private school fees. When the child did not end up attending private school, he sought return of the $300,000 balance through a resulting trust argument. The Full Court refused, finding the trust deed gave any residue to the child absolutely.
| Comparison | Blatch (No 5) [2022] | Bass & Bass [2016] |
|---|---|---|
| Joint enrolment / signed agreement | Yes, both parents signed enrolment | Trust set up for fees, child later did not attend |
| Capacity to pay | Surplus of around $1,300 per week | Not in issue |
| Outcome | $186,238 lump sum + continued fees ordered | Father refused refund, residue belonged to child |
Key: Once the parents have made a joint educational decision (enrolment, signed fee agreements, payment history), reversing it after separation is hard. And once you put money into a Child Support Trust earmarked for school, you do not get it back if circumstances change.
What this means for you:
- If you previously signed enrolment documents, expect the court to hold you to that intention when assessing fee orders.
- If you set up or accept a Child Support Trust, read the deed carefully. Any residue clauses about who keeps the leftover money are usually conclusive.
- If you are the receiving parent, retain enrolment forms, fee invoices, and any joint emails or text messages about the school choice. This is your evidence base.
What should I do if these issues affect me?
The themes above translate into practical takeaways. Where the law gets tested is in the documentation, the timing, and the framing of the application.
The court looks at your true financial position, not your tax return. Aitken & Porteus shows that capacity to borrow, history of property purchases, and overseas travel all count. If you cannot afford the lifestyle you are visibly living, the court will assume you can afford child support.
Inheritance counts as a financial resource even before you spend it. Beard & Fisher confirms an inheritance qualifies as special circumstances under section 117(2)(c)(ia). The size of the estate matters more than the label the recipient puts on it.
Real, documented debts have to be weighed. Yanda & Jacome shows that a substantial verified tax debt cannot be ignored. The flip side from Mancuso & Abbott is that ordinary discretionary debts will not push aside the duty to maintain children.
Joint educational decisions bind both parents. Blatch (No 5) shows that jointly signing enrolment forms is treated almost as a contract about the child's schooling. Walking it back unilaterally rarely works.
Once money is in a Child Support Trust, it is the child's. Bass & Bass confirms that residual capital in a properly drafted Child Support Trust belongs to the children, not the contributing parent.
| Do | Do Not |
|---|---|
| Apply for a Change of Assessment promptly when you learn of an inheritance or hidden financial resource | Wait until property settlement is over to raise child support arguments |
| Document debts with primary records (ATO notices, loan statements, repayment schedules) | Rely on vague evidence about loans from family or business expenses |
| Keep enrolment forms, fee invoices, and emails confirming joint school decisions | Assume verbal agreements about school choice are enough |
| Request full disclosure (bank statements, share registries, business records) before negotiating school fees | Accept formula-only outcomes when one parent has obvious wealth or capital |
| Use s 123 / s 124 lump sum or non-periodic orders when appropriate | Treat the administrative formula as the only available remedy |
If you suspect your ex has financial resources the formula does not capture, or if the formula is producing an unfair result against you, the right step is to apply for a Change of Assessment under section 117, or, where the issue is private school fees specifically, a non-periodic order under section 124. For complex matters, consult a family lawyer experienced in child support departure applications.
For a deeper look at the financial resource concept in property settlement, see How Does a Financial Resource Classification Change Property Settlement Ratios?. For how courts decide which school the child attends in the first place, see School Choice Disputes Australia: How Courts Decide. For when one parent appears to be hiding income or property, see What to Do When a Spouse Hides Assets in Divorce.
