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Two types of child support agreements
Which agreement is right for you?
There are 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 for your family.
Limited child support agreements
A Child Support Assessment must be conducted before an agreement can be finalised. 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 into 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.
Limited child support agreements must be registered by the Registrar of the Child Support Agency.
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 child support payment 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.
It is essential to understand all expenses relating to children when entering an agreement. 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, these may be required 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 circumstances of the family, rather than following a formula.
If a child has health, education, or medical costs, binding child support arrangements can cover these expenses.
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, they cannot be varied by the request of one person. Because of this, these agreements tend to be in place for a long time, such as when 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 requiresd both parties to again seek legal advice.
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