Parents must provide financial support for their children, and when going through a separation, working out financial arrangements for the cost of raising children is one of the matters you need to consider.
Child support agreements allow parties to make formal arrangements about financial support for their children.
Child support agreements can include provisions about the payment of periodic cash amounts, lump sums or non-periodic amounts, including school fees and related expenses, private health insurance, extra-curricular activities, out of pocket medical, dental and specialist costs; and other child-related expenses.
A child support agreement must meet the requirements of the Child Support legislation for it to be binding and enforceable.
There are two types of child support agreements, limited and binding.
Limited child support agreements allow parents some flexibility to determine their own child support arrangements. A limited child support agreement must be in writing and signed by both parents.
Binding child support agreements allow parents to make long-term arrangements with respect to child support. They operate in a similar manner to financial agreements which parties can make in relation to property, superannuation and spousal maintenance. Each party to a binding child support agreement must have received legal advice before signing the agreement.
There is no requirement for an administrative assessment from the Child Support Agency to be in place prior to the making or acceptance of this type of agreement. Once parents have made a child support agreement, either parent can apply to the Registrar of the Child Support Agency to have it accepted and registered.
There are both advantages and disadvantages of entering into a child support agreement depending on your circumstances and what you are hoping to achieve by entering into one.
We recommend that you first obtain legal advice to ensure that you properly understand the differences between a limited and a binding child support agreement, the terms of a proposed agreement and how it will affect you.
We can assist in providing advice in relation to entitlements and obligations, as well as provide advice on any private agreement instead of being subject to a child support assessment, including negotiating and drafting the terms of that agreement and lodging it with Child Support.
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