Child support payments are assessed by the Child Support Agency according to a formula, known as an administrative assessment. The assessment takes into account the number of children, each parent’s income and the care arrangements for the children.

Parents can however make their own arrangements about child support by way of an agreement, which can provide greater flexibility and certainty. There are two ways to legally formalise a child support agreement, namely by entering into:

• A limited child support agreement; or
• A binding child agreement.

Limited Child Support Agreements

This agreement has fewer requirements than a binding agreement. There must however be a child support assessment in place, and the amount payable under the Agreement must be equal to, or more, than the assessment made by the Agency.

This agreement needs to be in writing and signed by both parents. Legal advice is not required for this agreement. We do however recommend you obtain legal advice before entering into any child support agreement.

A limited child support agreement remains in place for 3 years, and can be ended after 3 years without notice to the other parent.

Binding Child Support Agreement

A binding child support agreement must also be in writing and signed by both parents. For this agreement to be binding each parent must receive independent legal advice. This requires each parent to have their own solicitor.

This type of agreement allows for greater flexibility as there is no requirement a child support assessment is in place, and there are no restrictions as to the amount of child support payable. This agreement also allows for more certainty as it cannot be varied.

You can end this type of agreement by entering into a new agreement, or going to Court. Terminating the agreement through court is not guaranteed however as the Court will only end a binding agreement in exceptional circumstances.

While there is greater flexibility as to child support arrangements in a binding agreement, the terms may affect Centrelink or Family Tax payments received by a parent. Also, as the agreement cannot be varied, changes in either parent’s circumstances, including changes to income or parenting arrangements, are not taken into account.

PWB Lawyers can assist in advising you as to whether a limited or binding child support agreement would be in your interests given your specific circumstances.