For parents electing to invest in private education for their children, paying school fees by credit card has been a practical way of managing large bills, by spreading the cost of fees over a few weeks or months and subject to cash flow and receiving incentives from their credit card providers in the process, such as accumulating frequent flyer points.
For parents that are separated, this mechanism was particularly useful as depending on how finances were arranged following separation; payment of fees via credit card provided a cash flow buffer, ensuring peace of mind in adhering to fee deadlines and eliminating the stress of chasing upfront payments from an ex-partner sharing in the expense.
However, this payment method could soon be a thing of the past with many schools starting to remove the option of paying by credit card as a fee payment option following recent changes made by the Reserve Bank of Australia (RBA).
As of October 1, 2026, the RBA’s ban on card surcharges has taken effect and its impact has been felt across many sectors nationwide. In response the Australian Taxation Office (ATO) has subsequently announced that it will stop accepting credit card payments to cover tax bills, and independent schools across Melbourne and Sydney have adopted a similar approach when it comes to the payment of tuition fees.
If you share school fees with a former partner, the change raises an obvious question: What happens to your share?
In short, your share and obligation will remain the same. Court orders and Binding Child support Agreements usually set out each parent’s share of private school fees. If one parent relies upon a credit card to pay on time, losing that option can lead to missed payments or a restructuring of how that individual will manage their finances moving forward.
A delayed payment of fees can put a child’s enrolment at risk and may lead to enforcement action or further court proceedings.
Given the early stages of the change, plan and prepare for likely changes in payment methods that may occur. If possible, communicate with your co-parent early about how each share will be paid, such as by direct debit, BPAY or a school instalment plan. If the fees are no longer affordable, get advice before you stop paying. Depending on your arrangement, it may be possible to update it by agreement with the other parent or to apply to Services Australia for a change of assessment.
Nicholes Family Lawyers provides tailored advice to separated parents about school fees, child support and parenting arrangements. To reach out, please contact our office at reception@nicholeslaw.com.au or by telephone at (03) 9670 4122.