Child support agreements are contractual arrangements between parents or non-parents that enable financial support for their children. The Child Support Scheme was introduced by the Australian government on 1 July 1988 to ensure the adequacy of court ordered child maintenance.
In this blog we discuss how child support is determined and explore the different types of child support agreements available in Australia.
Child Support Assessment
Child support is payable for all children living in Australia (up to the age of 18 years) following separation, regardless of whether the couple were married to each other or not.
Services Australia (Child Support) is the government agency responsible for administering Australia’s child support scheme, including assessing, collecting and transferring child support payments. An application can be made online through your myGov account linked to Services Australia (Child Support), or by phone. Once an application is made, Services Australia will assess both parents’ circumstances and issue an administrative assessment setting out the amount of child support payable.
Services Australia (Child Support) can make an assessment for child support based on income tax records and other financial information held by the ATO and the Commonwealth Government. The assessment is based on a complex formula and will broadly take into account the following:
- Each parent’s taxable income
- Time each parent cares for the child
- Number of children and ages
Child Support Agreements
Unlike a Child Support Assessment, which is calculated by Services Australia using a fixed formula based on income, care arrangements and the number and ages of children, a Child Support Agreement is a private arrangement negotiated directly between the parties. If parties are able to reach an agreement, then a family lawyer can prepare a Child Support Agreement which is registered with Services Australia. The agreement may include a combination of cash payments and non-cash payments (such as health insurance and school fees). There are two types of Child Support Agreements that can be formed depending on your circumstances.
1. Limited Child Support Agreement
This agreement requires a Child Support Assessment to be undertaken before the Child Support Agency accepts the terms of the agreement. A Limited Child Support Agreement is based on the Child Support Assessment, and payments under this agreement must be equal to or more than the amount that was found to be reasonable by the assessment.
2. Binding Child Support Agreement
A Binding Child Support Agreement can be entered into between the parties whether a child support assessment was undertaken or not. It can be made for any amount that is mutually agreed upon. However, both parties must obtain independent legal advice from an experienced family lawyer before making or terminating the agreement.
Court Ordered Child Support
A court may make a child maintenance order for children not covered by child support legislation, such as for the maintenance of children from carers who are not eligible for a child support assessment. The Family Law Act 1975 (Cth) regulates the process of enforcing child maintenance orders.
Contact us
Seeking advice from a family lawyer can help ensure that your child support agreement is legally sound, appropriately reflects your circumstances and protects your financial interests.
If you are currently considering entering into or modifying a Child Support Agreement or need assistance in any area of Family Law, please do not hesitate to contact Etheringtons Solicitors in North Sydney on 9963 9800 or via our contact form here.