Child support is a payment made by one parent to the other to assist with the cost of caring for children. Child support is payable until a child turns 18, however an application can be made to extend payments to the end of the school year in which the child turns 18.
Separated parents can enter into various child support arrangements.
First, parties can agree to have an informal arrangement and the receiving parent can collect the payments directly from the other party. This can be done either with or without an Assessment by the Child Support Agency (the ‘Agency’). If you receive child support by way of an informal agreement but are also in receipt of Centrelink payments you must advise Centrelink how much child support you receive.
Second, and most commonly, one parent can apply to the Agency who can then make an Assessment, collect the assessed amount and pay it to the receiving parent. The Agency uses a formula to calculate the payable amount by assessing factors including:
- The number of children in the parent’s care;
- The children’s ages;
- The amount required for parents to support themselves;
- The parents’ income; and
- The percentage of care each parent provides for the children.
Third, the parents can enter into a Limited Child Support Agreement. The Agency must accept the Limited Child Support Agreement for it to be binding and there must already be an Assessment in place. The parents do not require independent legal advice on a Limited Child Support Agreement but it is always a good idea to obtain advice prior to signing any legal document. To be accepted by the Agency, the parent receiving the child support must have at least 35% care of the children and the child support payable must be equal to or more than the Assessment amount. The parent receiving the child support can chose to collect the payments themselves or ask the Agency to collect on their behalf. In addition to the assessed amount, parents can agree to pay additional child rearing costs such as school fees, health insurance and expenses for extra-curricular activities.
A Limited Binding Child Support Agreement can be ended if:
- Both parties agree in writing to end the agreement;
- Both parties make a new Limited or Binding Agreement with new arrangements; or
- The agreement was made more than 3 years ago and one parent asks to end it in writing.
Lastly, the parents can enter into a Binding Child Support Agreement. Both parents require independent legal advice prior to signing the agreement. There is no requirement for an Assessment to be made by the Agency. The amount payable may be less or more than the otherwise Assessed amount. The amounts can be paid via lump sum or on a periodic basis (weekly, monthly etc.) and can also include payments for additional child rearing expenses as similarly outlined above. A Binding Child Support Agreement can be registered with the Agency and can be ended if both parties agree to terminate it, if a new agreement is entered into, or if the eligible carer now cares for the child less than 35% of the time, or it is set aside by the Court. A Binding Child Support Agreement provides parents with the most flexibility in respect of formal child support agreements.
If you require legal advice about your appropriate child support arrangements, please contact the DBL Family Law Team today.