Understanding Binding Child Support Agreements

Following separation, child support is often a question raised by parents, whether that be by one parent seeking child support or the other being requested to pay child support.

Child support is the financial assistance paid by one parent to the other, for the care of any child or children under the age of 18 years. Generally, there are no ongoing requirements for parents to pay child support once children turn 18 years, except in certain circumstances.

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Child Support Agency

Often one parent will register their separation with Centrelink and the Child Support Agency (‘Agency’). The Agency will then make an assessment as to what child support, if any, is payable to one parent by the other.

The Agency determines the appropriate amount of child support to be paid based on how many children, the ages of the children, the respective nights of care of the children and the respective taxable incomes of each parent. Therefore, it is often the parent with the greater care of the children and lower income who will be entitled to receive child support from the other parent. The assessed amount of child support to be paid will vary if any of these factors change.

The Agency does not require the paying parent to pay for additional expenses for the children such as school fees or medical costs, beyond the assessed child support payments. Therefore, it is generally, the parent who has the greater care of the children, who ends up paying for the majority of additional child-related expenses.

The receiving parent can then elect to receive the assessed payments directly from the paying parent or for the Agency to collect the payments from the paying parent. If the parent assessed to pay does not make the necessary payments, then a debt will arise and be enforced by the Agency.

Most families determine their child support entitlements and obligations through the Agency.

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Binding Child Support Agreements

However, often parents will expect or prefer that ongoing additional costs for the children, such as school fees, extracurricular costs and medical costs are either paid by one parent (usually the parent with the greater income) or shared by both parents. Through the Agency, there is no further obligation for both parents to contribute to any further costs such as school fees or medical costs.

If parents agree for the payment of additional child-related expenses, we suggest that the parties consider a Binding Child Support Agreement. To become binding, an Agreement needs to be carefully drafted by an experienced solicitor and then each parent needs to obtain detailed
independent legal advice prior to signing.

A Binding Child Support Agreement can be prepared to cover a number of situations and can either include periodic and/or non-periodic payments:

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Periodic payments

These are weekly payments made by one parent to the other, often similar to the weekly payments assessed by the Agency.

• An Agreement can state that one parent pays a set amount of periodic payments each week;
• An Agreement can state that one parent pays periodic payments, as assessed by the Agency (which will vary depending on the parent’s respective incomes and nights of care of the children);
• An Agreement can state that one parent will not pay periodic payments;
• An Agreement can state that one parent will not pay any periodic payments in lieu of them forgoing a greater property settlement;

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Non-periodic payments

These are additional, often irregular payments made by one parent
or both parents towards specific child-related expenses, including the following:

• An Agreement can state how school expenses are to be paid – whether by just one parent or shared by both parents;
• An Agreement can state how sporting and extracurricular activity costs are paid whether by just one parent or shared by both parents;
• An Agreement can state how child related medical costs are to be paid – whether by just one parent or equally by both parents.

A Binding Child Support Agreement can be tailored by an experienced solicitor to your individual situation.

There are many factors to consider when deciding whether a Binding Child Support Agreement is the best option for your situation. There are many factors which our experienced family solicitors will discuss with you, including the following:

• The ages of your children;
• Any special needs of your children;
• Your current taxable income and your ex’s current taxable income;
• Any expected increase or decrease to your taxable income or your ex’s taxable income;
• Whether either parent is self-employed or operates their own business;
• Whether the children attend a private school or have any anticipated major medical expenses.

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Obviously, the circumstances of every separated family are different and unique. If you would like to find out more about your obligations and options on how to receive or pay child support, then please contact our experienced solicitors who can provide you with tailored advice.

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