Binding Child Support Agreements

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Binding Child Support Agreement Lawyers

After separation, deciding how to share the costs of raising your children can be one of the most important financial issues to resolve. You may want certainty about regular payments, school fees, health costs and other expenses, while also having an arrangement that reflects your family’s circumstances.

A Binding Child Support Agreement is a formal written agreement between parents, or in some circumstances a parent and an eligible non-parent carer, that sets out the amount of child support to be paid and how it will be paid. Unlike a standard administrative child support assessment, it allows the parties to agree on their own child support arrangements.

A Binding Child Support Agreement can provide flexibility and certainty, but it also creates legal obligations. Importantly, each party must obtain independent legal advice before entering into the agreement. The agreement must also meet specific legal requirements before it can operate as a Binding Child Support Agreement.

We act for clients throughout Victoria, not only in Melbourne, so wherever you are in the state we can help.

Considerations for Binding Child Support Agreements

A Binding Child Support Agreement can set out how child support will be provided rather than leaving the amount and payment arrangements to the administrative child support system.

Depending on how the agreement is structured, it may deal with periodic payments as well as other forms of non-periodic financial support, including payments to third parties and non-monetary payments. This can allow parents to address expenses such as school fees and health insurance as part of their broader child support arrangements. Certain Binding Child Support Agreements can also provide for a lump-sum payment or transfer of property to meet future child support liabilities.

Because different requirements can apply to different types of payments, the terms of the agreement should clearly explain what is to be paid, when it is to be paid and how those payments interact with any other child support liability.

Why both parties should have independent legal advice

Independent legal advice is a key requirement of a Binding Child Support Agreement. Before signing, each party must receive independent legal advice about the effect of the agreement and its advantages and/or disadvantages. The agreement must include a statement confirming that the required advice was received, together with an annexure signed by the legal practitioner who provided that advice.

The same lawyer cannot provide the required independent advice to both parties. Without the required independent legal advice and certification, the agreement is not enforceable and Services Australia cannot accept it as a Binding Child Support Agreement.

Impact on the Child Support Assessment

One of the features of a Binding Child Support Agreement is that the parties can agree on the amount of child support themselves.

The agreed amount may be more or less than the amount that would otherwise be payable under the child support formula, provided both parties agree and the legal requirements for a Binding Child Support Agreement are satisfied.

Generally, a Binding Child Support Agreement can also be accepted without an existing administrative child support assessment. Different requirements apply to certain lump-sum arrangements, where an existing assessment is required.

How the agreement may work in the future

A child support arrangement that suits your family now may become more difficult if circumstances change.

Before entering into a Binding Child Support Agreement, it is worth considering foreseeable changes such as your children’s schooling and expenses, changes to care arrangements and changes to either parent’s financial circumstances.

This is important because a child support agreement cannot simply be varied after it has been made. If different terms are required, the existing agreement may need to be terminated and replaced with a new agreement that meets the applicable legal requirements.

Duration of a Binding Child Support Agreement

The duration of an agreement will depend on its terms and whether a terminating event occurs. A child support agreement generally continues until the date or event specified in the agreement, unless it is terminated earlier. If there is no specified end date and no other terminating event occurs, its provisions can generally continue until the child (or children) covered by the agreement becomes 18 years old. Special provisions may apply where a child (or children) continues secondary school after turning 18.

Termination of a Binding Child Support Agreement

Binding Child Support Agreements are designed to provide certainty, which also means there are specific rules about ending them.

Depending on the circumstances, an agreement may be terminated by a later Binding Child Support Agreement, by a written termination agreement that meets the relevant requirements, or by a court order setting the agreement aside. Other terminating events may also apply.

If your circumstances have changed and your existing agreement is no longer suitable, obtaining legal advice can help you understand the options available to you.

Impact of Services Australia

Once the parties have entered into a child support agreement, either party can apply to the Child Support Registrar for acceptance. The Registrar considers whether the agreement satisfies the relevant requirements and advises the parties of the decision.

Services Australia provides a Child Support Agreement form that can be used as a guide or to record the agreement. A legal practitioner can also assist with preparing the terms. For a Binding Child Support Agreement, the required legal certificates must be provided.

Impact on the Family Tax Benefit

This is another financial consequence that should be considered before entering into an agreement.

After Services Australia accepts a child support agreement, it makes a notional assessment of the child support that would be payable if the agreement were not in place. Services Australia uses this notional assessment when calculating the amount of Family Tax Benefit Part A a person can receive.

Understanding the financial consequences before signing can help reduce the risk of unexpected outcomes later.

How Carbone Lawyers Can Help

Child support arrangements can affect your family’s finances for years. Before signing a Binding Child Support Agreement, you should understand exactly what the proposed terms mean for you and your children.

Carbone Lawyers provides family law services, including assistance with child support matters. Our family lawyers can discuss your circumstances, explain the legal effect of a proposed Binding Child Support Agreement and help you understand its advantages and disadvantages before you decide whether to sign.

Where appropriate, a lawyer can also assist with preparing or reviewing the proposed terms and ensuring that the agreement properly records the arrangements you intend to make.

Because independent legal advice is mandatory, we can only provide the required independent advice to the party we represent. The other party must obtain their own independent legal advice.

A Binding Child Support Agreement can create important and potentially long-term financial obligations. Don’t settle for less when it comes to understanding your rights, responsibilities and options.

Contact us on 1800 369 888 for more information about Binding Child Support Agreements and child support arrangements.

FAQs on Binding Child Support Agreements

What is a Binding Child Support Agreement?
A Binding Child Support Agreement is a written agreement between parents, or a parent and an eligible non-parent carer in relevant circumstances, setting out the amount of child support to be paid and how it will be paid. Each party must receive independent legal advice before entering into the agreement.
Both are formal ways of making child support arrangements, but there are important differences. A Binding Child Support Agreement requires each party to obtain independent legal advice and can provide for an agreed amount that is more or less than the child support formula amount. A Limited Child Support Agreement does not require independent legal advice, but there must be an administrative child support assessment in place and the agreement must generally provide for at least the annual rate payable under that assessment.
Yes, each party must obtain independent legal advice before entering into a Binding Child Support Agreement. The required advice concerns the effect of the agreement and its advantages and/or disadvantages. The lawyer must also provide the required certification that the advice was given.
No, each party must receive independent legal advice. The same legal practitioner cannot provide the required advice to both parties to the Binding Child Support Agreement.
Yes, the parties can agree to an amount that is more or less than the amount that would otherwise be payable under the child support formula.
Child support agreements can provide for periodic and non-periodic payments, including payments such as school fees and health insurance. The way these payments are treated should be clearly addressed in the agreement.
Yes, Binding Child Support Agreements can provide for a lump-sum payment or transfer of property to be credited against future child support liabilities. Specific requirements apply, including having a child support assessment in place before this type of agreement can be accepted.
A Binding Child Support Agreement cannot simply be varied. If the parties want to change their arrangements, the existing agreement needs to be terminated and replaced with another agreement that satisfies the relevant requirements.
Yes, but specific requirements apply. A Binding Child Support Agreement may, for example, be terminated by a later Binding Child Support Agreement, a qualifying written termination agreement or a court order setting the agreement aside. The circumstances of the particular agreement should be considered before attempting to end it.
It can. After accepting a child support agreement, Services Australia makes a notional assessment of what the child support rate would have been without the agreement. That assessment is used when calculating Family Tax Benefit Part A.
Not necessarily. Unlike a Limited Child Support Agreement, a Binding Child Support Agreement can generally be accepted without an administrative child support assessment already being in force. However, an existing assessment is required for certain lump-sum Binding Child Support Agreements.
Independent legal advice is legally required for a Binding Child Support Agreement. It is also important because the agreement can create significant financial obligations and cannot simply be varied if circumstances later change. Your lawyer can explain how the proposed agreement affects you, including its advantages and disadvantages, before you decide whether to sign.