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What Is a Child Support Agreement?

What Is a Child Support Agreement?

The child support legislation allows parents to reach agreement on the amount of child support to be paid. A child support agreement must meet the requirements of the legislation and has to include matters that can be dealt with in a child support agreement. Once parents have made a child support agreement, either parent can apply to the Registrar to have it accepted.

Binding child support agreements

A binding child support agreement must be in writing, and signed by both parents and include a statement that each party has received independent legal advice as to the effect and advantages or disadvantages of the agreement, before it was signed, and include an annexure, for each of the parties to the agreement, signed by the person who provided the legal advice. There is no requirement for an administrative assessment to be in place prior to the making or acceptance of a binding child support agreement. A child support agreement can only be made between the parents of a child or between the parents and any non‐parent carer. A binding child support agreement cannot be varied.  To change a binding child support agreement, the agreement must be terminated and replaced with a new binding child support agreement.

What can be in a child support agreement?

A child support agreement can only be made in relation to specific matters listed in the Child Support Assessment Act. A child support agreement must contain at least one of the following provisions

Provision under which a parent is to pay child support for a child to another person in the form of periodic amounts paid to the other person (periodic amounts to be paid to the other person), Provisions varying the rate at which a parent is already liable to pay child support for a child to another person in the form of periodic amounts paid to the other person,

Provision under which a parent is to provide child support for a child to another person otherwise than in the form of periodic amounts paid to the other person and those amounts are to reduce the annual rate of child support payable by the parent under the child support assessment

Provision that a parent is to provide child support for a child to another person in the form of a lump sum payment (including by way of transfer or settlement of property) and that payment is to be credited against the parent's child support liability under the child support assessment) (lump sum payment provisions),

Provision under which a parent is to provide child support for a child to another person otherwise than in the form of periodic payments that are not non‐periodic or lump sum payment provisions,

Provision under which a parent's liability to pay or provide child support for a child to another person is to end from a specified day (a provision to end a child support liability).

Periodic amounts to be paid to the other person

A child support agreement can provide for periodic amounts (regular amounts payable on a regular basis) to be paid to the other parent or non‐parent carer. These may be paid directly to the other parent or non‐parent carer, to their bank account, or to a third party as the agent of the payee, such as a solicitor or trustee. A periodic amount can be adjusted for the costs of living by either the child support inflation factor or the Consumer Price Index (CPI) or another adjustment factor indentified by the child support agreement. A provision that requires the payer to make payments to a third party (such as a school) on behalf of the payee is not a provision for a periodic amount to be paid to the other person. A provision of this kind is a non‐periodic provision

Non‐periodic payment provisions Where a child support agreement provides for child support to be paid otherwise than in the form of periodic amounts it must state that the annual rate of child support payable under the administrative assessment is to be reduced by a specified amount or percentage (up to 100%), which represents the annual value of the child support payable under the agreement Example: M agrees to pay school fees for C of $5000 per year. The fees are payable to XYZ College. M's annual rate of child support is to be reduced by $2500. If a child support agreement does not specify how the non‐periodic payment provisions will reduce the child support payable, then the non‐periodic payment provision in the agreement will not have any effect for the purposes of determining the child support assessment.

Lump sum payment provisions

Where a child support agreement provides for child support to be paid in the form of a lump sum: it must be a binding agreement, it must state the lump sum payment is to be credited against the amount payable under the administrative assessment, there must be an administrative assessment in force prior to the application for acceptance being made, the amount of the lump sum must equal or exceed the current annual rate of the administraive assessment, the lump sum will be credited at the rate of 100% of the child support payable (unless the agreement specifies a lesser percentage).

Other payments & benefits

A child support agreement may include provision for child support to be provided otherwise than in the form of periodic amounts, but not specify how that payment is to reduce the child support payable nor specify that it is a lump sum payment that is to be credited against the child support assessment liability. An agreement may also include a provision for child support other than in the form of monetary payment, for example, the provision of goods or services. If the agreement does specify the provision of goods, services, other payments or benefits then those arrangements will not have any effect on the child support assessment. The goods, services, payments or benefits conferred under the provision of the agreement will be in addition to any administrative assessment. 

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Disclaimer: The information contained in this blog is for informational purposes only and is not legal advice. Nothing in this blog should be deemed to create or constitute a solicitor-client relationship between any readers and Swan Lawyers. A solicitor-client relationship is created only when this firm agrees to represent someone and a written engagement agreement or engagement letter is signed by both the client and solicitor. In all cases, the reader should consult his or her own solicitor for advice. The information in this blog is based on Australian law.