If parties have agreed to a private arrangement for child support it may be advantageous for them to enter into a Child Support Agreement, according to family law specialist JILLIAN STIBBARD.
The benefits of a Child Support Agreement can include:
- Certainty of obligations on both parties;
- Greater flexibility as to how financial child support is paid whether that’s through a lump sum or transfer of property from one party to the other; and
- The Child Support Agency (now Department of Human Services) can still collect some types of payments under a private agreement, if in arrears, if it is in writing and registered with the Department of Human Services.
However it is important to get independent legal advice prior to entering into an agreement as they have serious obligations and also may impact Family Tax Benefit payments or other Social Security payments.
What is a Child Support Agreement?
Child Support Agreements are agreements between parents or eligible carers of children as defined by the Family Law Act 1975.
The parties may formally enter into an agreement as to the financial support of their child(ren) independent of the Child Support Agency Assessment.
There are two types of private Child Support Agreements:
- Binding Child Support Agreement; and
- Limited Child Support Agreement.
Each agreement has different requirements for it to be valid pursuant to the Child Support (Assessment) Act 1989.
Binding Child Support Agreement
A binding child support agreement is required to be in writing and the parties have to obtain independent legal advice prior to entering into an agreement. As it is “binding” in nature the agreement is very difficult to terminate, even if your circumstances change significantly.
Limited Child Support Agreement
A Limited Child Support Agreement is required to be in writing, a child support assessment already in place and the financial support agreed to must be equal to or more than the assessment. A limited child support agreement can be terminated with the consent of both parties; or if there is a significant change in either party’s circumstances; or by either party anytime after 3 years.