Child Support Agreement
Child Support Agreements
In Australia, the calculation, payment and enforcement of child support between separated parents is governed by federal law.
However, due to cultural and social differences, the government’s formula and legislation can seem obscure, and the factors it considers may not suit every family’s needs. Payment of private school fees and other miscellaneous expenses is a frequent source of dispute.
Is there a way to address individual requirements while still leveraging government oversight?
The answer is yes. If both parties agree, they can enter into a private child support agreement. There are two types: Limited Agreements and Binding Agreements.
A private child support agreement allows very flexible management of the amount and schedule of payments. Parties may include clauses that the government’s calculation and assessment do not cover, tailoring the agreement to their needs.
Once signed, a private agreement can be lodged with the government agency, which can then handle collection and enforcement.
The distinction between Limited and Binding Agreements reflects their suitability for different circumstances:
Limited Agreements:
- Valid for three years;
- Must require payments at least equal to the amount calculated by the government formula;
- Can be made without seeking legal advice;
- May be terminated if actual payments vary by more than 15% due to unforeseen changes (for example, shifts in income).
In short, Limited Agreements are simple, require a minimum payment, last three years, and may be cancelled under certain conditions.
Binding Agreements:
- Have no fixed term;
- Require each party to obtain independent legal advice before signing;
- May be entered into not only with parents but also with other carers (e.g., grandparents);
- Are generally very difficult to cancel.
In short, Binding Agreements are more complex and may incur legal fees, but they offer long-term stability and are hard to overturn.
Each type has its advantages and drawbacks. Limited Agreements are easy to prepare but come with restrictions and cancellation risk. Binding Agreements are robust but more expensive. A lawyer can advise on the best option for your situation and draft an agreement tailored to your needs.
See you next issue.
Editor’s Note:
Mr Ren is originally from Guangzhou, China and has practised for many years. He is now the Principal Lawyer at LJR Legal.
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