Child Support Agreements are a fundamental component of the Australian family law system, setting out how a child will be financially supported in the event of parental separation.
Typically, courts do not have power to order one parent to make periodic payments, or non-periodic payments for a child’s expenses such as school to another parent or third party. Services Australia provide a free child support assessment, in which they assess the amount of child support required to be paid for children using a formula that considers a wide range of individual factors. Parents also have the option of entering into a Child Support Agreement.
A formal child support agreement can be made between parents, providing parties with the opportunity to decide how their children should be financially supported. Child Support Agreements are private agreements between parties, which ultimately enable the parties to specify, limit or reduce the amount of Child Support to be paid, compared with the formula assessments conducted by Services Australia. These can cover cash payments, non-cash items such as health insurance and school fees, or a combination of such. There are two types of child support agreements – limited child support agreements and binding child support agreements.
Limited Child Support Agreement
A limited child support agreement is a formal agreement between parents or carers about child support that does not require independent legal advice. This agreement can include cash payments, or payment of non-cash items including school fees and health insurance. Limited child support agreements must already have a child support assessment in place. The payments in the agreement must be equal to or more than the annual rate in your child support assessment. Under this agreement, a parent must have at least 35% care of a child to receive child support. A limited child support agreement can be ended unilaterally by providing notice, provided the agreement has been in place for at least three years. The terms of a limited child support agreement will not take effect until it is registered by the Child Support Agency.
Binding Child Support Agreement
A binding child support agreement is a written agreement about child support payments where both parties have obtained independent legal advice. An amount for your child support payments must be agreed upon by both parties, but unlike limited child support agreements, can be more or less than the amount payable under a child support assessment. A parent must have at least 35% care of a child to receive child support. A binding child support agreement will not be valid unless both parents have sought independent legal advice, and have each obtained a section 80C certificate. This certificate ultimately states that you have received legal advice and informed of the effect of the agreement on your rights, and its advantages and disadvantages. A binding child support agreement will end upon the making of a new binding child support agreement, which effectively terminates or replaces the previous agreement. Otherwise, the binding child support agreement will end when the child turns 18 years of age or completes secondary school (whichever is the latter) or by court order. The agreement can take effect on the day that it is finalised, and either party can register the agreement with the Child Support Registrar.
When a limited or binding child support agreement is accepted, receiving parents can choose to receive their payments through either private collector child support collect. Parents must meet various obligations. Child support must be paid on time and in full, Services Australia must be informed of the care arrangements in place for the children, tax returns must be lodged on time, income must be reported accurately, and Services Australia must be notified of any changes in circumstances.
Our team of specialist Sydney family lawyers can help you understand your legal rights and responsibilities in respect of child support, providing personalised and up-to-date specialised legal advice for your individual circumstances. Our experienced family law team at the Norton Law Group are dedicated to assisting you reach an agreement outside of court, and can work with you to determine if a Child Support Agreement is the best option for you.