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Two types of child support agreements
Which agreement is right for you?
Services Australia recognises two types of Child Support Agreements:
- Limited Child Support Agreements
- Binding Child Support Agreements.
Talk to our experienced family lawyers, who will advise you on the benefits and risks associated with these agreements. They will also help you make the best choices to financially support your family.
Limited child support agreements
Before finalising an agreement, the parties must conduct a Child Support Assessment. The Child Support Agency, through the Department of Human Services, is responsible for completing this assessment. Once completed, parents must sign a written agreement to enter into a limited child support agreement.
You don’t need legal advice to enter a limited child support agreement. However, you do need to ensure that the annual rate of child support payable in the agreement is equal to or greater than the rate given in the Child Support Assessment.
The Registrar of the Child Support Agency must register limited child support agreements.
You can end a limited child support agreement in the following circumstances:
- when a new agreement is entered into in relation to the same children, subject to the original agreement
- with a Court Order
- with a Termination Agreement, in writing and signed by the parties
A party can request a new notional assessment of child support. The Child Support Agency completes this assessment.
If the assessment changes by more than 15%, they must give notice to terminate the agreement within 60 days. It’s important to seek legal advice to determine whether this is the case.
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Binding child support agreements
Binding child support agreements allow parents to make different arrangements regarding child support.
Therefore, both parties must obtain independent legal advice in relation to that agreement, before entering into the agreement. The agreement must be in writing and signed by both parents. Each party must also provide a certificate from their legal practitioner to show that they have received advice covering:
- the effect of the agreement on the rights of the party
- the advantages and disadvantages, of making the agreement at the time that the advice was provided.
As part of the process, both parties must disclose their financial circumstances to the other party.
The amount of child support in the agreement does not have to be equal to, or greater than the rate set by the Child Support Assessment. This is different from limited child support agreements.
When entering an agreement, it is essential to understand all expenses related to children. These expenses may include school fees, uniforms, smart devices, phone bills, and medical expenses. Our child support lawyers in Cairns will advise you on your options before entering a binding agreement.
Binding child support payments
Parents can agree to pay child support through regular payments, lump-sum payments, or payments toward expenses.
Terminating a binding child support agreement
The terms of a binding child support agreement can only be changed by a termination agreement, an order of the court, or by entering a new Binding child support agreement. Typically, you may need these when your, or your former partner’s, financial position changes. An expert family lawyer will help ensure the binding child support agreement properly reflects your best interests in these scenarios.
To enter into a termination agreement or a new binding child support agreement, both parties must again receive independent legal advice from a family lawyer.
Frequently Asked Questions
What are the benefits of a binding child support agreement?
Binding child support agreements have the benefit of providing certainty for both parents involved. These arrangements are more flexible, so they tend to be tailored to suit the family’s circumstances, rather than following a formula.
Binding child support arrangements can cover these expenses if a child has health, education, or medical costs.
If both parties are on amicable terms, arranging the agreement outside the Family Courts is often more cost-effective.
What are the disadvantages of binding child support agreements?
Unlike a child support assessment by the Child Support Agency, child support agreements cannot be varied at the request of one person. Because of this, they tend to be in place for a long time, such as until the child turns 18. If your circumstances change during this period, it could affect your ability to afford child support.
In this scenario, it is possible for the binding child support arrangement to be terminated but this requires both parties to again seek legal advice
How long are child support agreements in place?
A limited child support agreement is usually valid for up to 3 years when it is reviewed and renewed. A binding child support agreement can be in place until the child turns 18.
If the child is still in secondary or tertiary education when they turn 18, it is possible to extend child support agreements.
Where an adult child suffers from a disability or serious illness, you may still be entitled to, or obligated to pay child support.
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