Tips on binding child support agreements
When it comes to child support, there are two types of agreements – a limited child support agreement or a binding child support agreement. It’s important that you choose the right type of written agreement on child support payments.
What is a child support assessment?
Child support assessments conducted by the Services Australia (child support) determine the financial support obligations of one or both parents for their children post-separation or divorce, based on factors like parental income and care arrangements. Both parents are generally responsible for supporting their children, even if the children primarily reside with one parent, and payments are intended to cover various expenses such as food, clothing, and education. Parents can make their own private arrangements, documented in financial agreements, but these must comply with legal requirements to be considered as binding agreements. Overall, the assessment ensures children receive the necessary financial support, with the government administering the child support scheme to ensure fairness and compliance with the law in regards to child support arrangements.
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Limited child support agreements:
Limited child support agreements can only be accepted if there is a child support assessment (CSA) in place and the annual rate payable under the written agreement signed by both parents is equal to, or more than, the annual rate of child support payable under the child support assessment. You are not required to obtain legal advice before entering into a limited agreement, however you can choose to do so. Limited agreements can only be made for a maximum of three years.
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Binding child support agreements:
Binding child support agreements can be made and accepted even if a child support administrative assessment has not been made. The agreement can be made for any amount that both parties or parents agree to. Both separating parents must obtain independent legal advice before entering into the agreement and attach a certificate that is completed and signed by each party and their solicitor. A binding agreement can only be ended if a new agreement is entered into and terminates it, or if a federal circuit or family court order is made to terminate it, or if care arrangements change significantly.
Considering a Binding Child Support Agreement:
A binding child support agreement can be an attractive option, as it gives both parents certainty about the amount they must pay the other parent, or the amount they will receive from the paying parent, as well as contracting out of the administrative child support system.
However, it’s important to remember that by entering into a binding agreement, your financial obligations are just that – binding – regardless of a change in fortune.
In a recent case, a father filed an application seeking orders for a binding child support agreement to be terminated and arrears accrued of $4700 to be cleared.
The parents had entered into a binding child support agreement with each other three years previously, following final parenting orders being made regarding their two children.
At that time, one child was living with each parent. The agreement then was that the father would pay child support to the mother. The amount to be paid was $1006 per month (indexed annually in accordance with CPI), and in addition he would pay 50 per cent of the tuition / school fees and financial support with expenses for school books and uniforms for the child living with the mother.
The child living with the mother then went to live with his father, and from that time communicated or spent very little time with his mother.
Despite this change in circumstances, the court dismissed the father’s application, on the basis that the court did not have the power or discretion to be able to intervene.
This case highlights the risk of entering into a binding child support agreement, and it’s vital to discuss including contingencies in the agreement.
If you have questions about child support, or any other aspect of family law, please contact Michael Lynch Family Lawyers on: (07) 3221 4300 or email: [email protected]
