Child Support Agreements, Binding & Limited

A FDRP often writes a parenting plan about the care arrangements for children. However, a parenting plan can include provisions for child support, such as how much each parent will pay in child support. A child support agreement has certain requirements.

A Child Support Agreement must be:

• Between two parents of a child who would be able to properly make an application for Child Support assessment of child support for the child in relation to whom the agreement is made; or
• One or both parents of a child, and a non-parent carer of the child, who would be able to properly make an application for Child Support assessment of child support for the child in relation to whom the agreement is made.

What can be in a Child Support Agreement?

A child support agreement can only be made in relation to the specific matters listed in the Child Support Assessment Act. A child support agreement must contain at least one of the following provisions:

• Provisions under which a parent is to pay child support in the form of periodic amounts paid to the other person.
• Provisions varying the rate at which a parent is already liable to pay child support in the form of periodic amounts paid to the other person.
• Agreeing on any other matter that may be included in an order made by a court.
• Provisions under which a parent is to provide child support otherwise than in the form of periodic amounts paid to the other person and those amounts are to reduce the annual rate of child support payable by the parent under the child support assessment.
• Provisions that a parent is to provide child support in the form of a lump sum payment (including by way of transfer or settlement of property) and that payment is to be credited against the parent's child support liability under the child support assessment.
• Provisions under which a parent is to provide child support otherwise than in the form of periodic payments that are not non-periodic or lump sum payment provisions.
• Provisions under which a parent's liability to provide child support is to end on a specified date.

From the DHS (Child Support) Legal Practitioner’s Guide:

Parents may decide to make an agreement about the amount and form of Child Support to be paid as an alternative to an assessment made by us. There are two types of agreements—limited agreements and binding agreements. Parents may want to involve a lawyer in drafting a Child Support agreement.

The child support legislation allows parents to reach agreement on the amount of child support to be paid. A child support agreement must meet the requirements of the legislation and must include matters that can be dealt with in a child support agreement. Once parents have made a child support agreement, either parent can apply to the court to have it accepted.

If parents enter into or want to end a binding agreement they must get legal advice. Legal practitioners are to complete a certificate to verify that parents received legal advice before entering into a binding agreement for Child Support.

Limited Child Support Agreements:

• There must be a Child Support assessment already in place.
• The amount payable under the agreement must be equal to or greater than the child support assessed by the formula.
• It cannot be varied but can be ended by a new limited or binding agreement or court order.
• Can be terminated after three years at the request of one party or if the notional assessment has varied by more than 15%.

Binding Agreements:

• Must be in writing and signed by both parties to the agreement.
• Requires a certificate from both parents’ lawyers stating they have been provided with independent legal advice.
• Can be made for any agreed amount.
• Can be ended by a new binding agreement or a court order.
• “Exceptional circumstances” are required for any court application to set aside the binding agreement.
• A binding agreement can be accepted without a Child Support assessment being in force because that requirement only applies to a limited child support agreement.

Other Requirements of a Child Support Agreement:

• The parties can sign the same child support agreement, or each sign separate copies of a child support agreement, the terms of each copy must be identical.
• If a child support agreement deals with more than one child, the court will treat it as if it contains separate agreements for each of the children.
• If a child support agreement provides that child support is to be paid by both parents, the court will treat it as if it contains separate agreements by each of the parents.

Creating a child support agreement is a crucial step for parents who wish to establish clear and legally binding arrangements for the financial support of their children. ​ Whether opting for a limited or binding agreement, it is essential to understand the specific requirements and provisions outlined in the Child Support Assessment Act. Engaging legal advice is highly recommended, especially for binding agreements, to ensure that both parties are fully informed and the agreement is enforceable. By carefully drafting and agreeing upon the terms, parents can provide stability and clarity for their children's future, while also meeting their legal obligations. ​