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Child Support Agreements – What to know

In any relationship breakdown where children are involved, it is important to know the options available to you regarding the financial support of your children, commonly called ‘Child Support’. When looking at Child Support, there are four options:

1. Private Arrangments

Both parents come to a private agreement with each other about the care, welfare and shared parenting arrangments for their children. These arrangments are separate to the Child Support Agency and not formally decided under Child Support legislation.

2. Child Support Agency

Parents can apply to obtain an assessment of the amount of child support you could expect to receive or pay from the Child Support Agency, known as a ‘Child Support Assessment’.

The Child Support Agency uses a formula to assess and calculate child support payments. The agency generally collects from one parent and pays the other parent  the amount assessed by the Child Support Agency. However, if both parents agree, payments can be paid privately between the parties.

3. Binding Child Support Agreements

A  Binding Child Support Agreement is a written agreement between the parties that specifies how each party will financially contribute to support the care of their children. The agreement takes effect after each party has signed and received legal advice on the terms of the agreement. Each party must obtain independent legal advice on the agreement.

Binding Child Support Agreements can be an amount the parties agree upon and are not required to be in line with the Child Support Assessment. The agreements also do not have to specify a dollar amount, but can instead include concepts such as  payment of school fees and living expenses (such as rent).

4. Limited Child Support Agreements

If a Child Support Assessment is already in place with the Child Support Agency, parties can enter a Limited Child Support Agreement. The amount that is payable under a Limited Child Support Agreement must be equal to or more than the Child Support Agency’s Assessment.

Limited Child Support Agreements can be more realistic depending on the circumstances as they may be brought to an end after three years if a party so wishes, or sooner in the case of significant change of financial circumstances.

Unlike Binding Child Support Agreements, it is not a requirement to obtain legal advice in order to enter into a Limited Child Support Agreement. Despite this, we recommend always seeking legal advice before entering into any type of child support agreement.

How can we help you?

The primary purpose of child support has always been to ensure that children receive regular periodic support from their parents to meet their daily needs.  With the interaction of Centrelink payments and Family Tax Benefit, child support can be a complex area to navigate, especially in relation to the advantages and disadvantages and the requirements for each type of agreement. Our lawyers can provide you with piece of mind regarding this difficult process and the best options for you and your children’s circumstances.

If this may be relevant to your current situation, please contact our Family Law team who can guide you through the process on 8210 5400.

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