Binding Child Support Agreements

Family Law

When a couple has separated, they usually go through property settlement, where there are children, an arrangement will be made in relation to the parenting of the children, and it’s very common that one parent will be required to pay child support. It is most common for the child support amount to be determined by a specific calculation done by Services Australia, however, the separating parents may opt for a binding child support agreement (“BCSA”) instead.

A BCSA is a written agreement that parents of the children enter into and addresses child support payments. The agreement is legally binding and is regulated by the Child Support (Assessment) Act 1989, however, in some situations they can be affected by the Family Law Act 1975.

It is common that parents will enter into a binding child support agreement because they want to have certainty about what financial assistance will be provided in the future.  A BCSA also allows for parties to make direct payments to third parties, such as private schools and extracurricular activities.

BCSA’s have many advantages for both parents:

  • They provide security and certainty into the future, unlike child support determined by services Australia, where a person’s assessment can change due to changes in circumstances (such as job loss);
  • Funding arrangements can be included for private schooling, private health insurance, medical payments, and extracurricular activities;
  • Enforcement can be done through the Federal Circuit and Family Court of Australia.

BCSA’s are not for everyone, and they do have potential disadvantages:

  • Child support agreements can be in place for a very long time, they have a specific terminating clause (which are agreed between the parties), such as when a child turns 18 or when the child finishes secondary school;
  • A party’s income may fluctuate, and this may result in a person receiving less than what they would be assessed to receive if it was processed though Services Australia, or alternatively if a party’s income is significantly reduced, they will still be required to pay what is outlined in the BCSA even though they may not have the capacity to make those payments;
  • The parties can agree for a BCSA to be terminated if one parties income falls below a certain amount, but the parties are required to enter into a further “terminating agreement” and they must seek independent legal advice, this often leads to further friction because a party is not legally required to enter into a termination agreement, therefore an application may need to be made to the Court;
  • Parties are unable to informally vary or amend the BCSA which means that if unexpected situations arise, the agreement may not reflect those circumstances.

If you are concerned about your former partner not making child support payments, then one of our experienced family lawyers can discuss if a Binding Child Support Agreement is right for you, call our friendly team on 02 4944 3322.

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