Tips on binding child support agreements
When it comes to child support, there are two types of agreements – limited and binding. It’s important that you choose the right type of child support agreement for your situation.
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Limited child support agreements:
Limited child support agreements can only be accepted if there is a child support assessment (CSA) in place and the annual rate payable under the agreement is equal to, or more than, the annual rate of child support payable under the child support assessment. You are not required to get legal advice before entering into a limited agreement, however you can choose to do so. A limited agreement can only be made for a maximum of three years.
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Binding child support agreements:
Binding child support agreements can be made and accepted even if a child support assessment has not been made. The agreement can be made for any amount that all parties agree to. Each party must obtain independent legal advice before entering into the agreement and attach a certificate that is completed and signed by each party and their solicitor. A binding agreement can only be ended if a new agreement is entered into and terminates it, or if a court order is made to terminate it, or if care arrangements change significantly.
Considering a Binding Child Support Agreement:
A binding child support agreement can be an attractive option, as it gives both parents certainty about the amount they must pay, or the amount they will receive, as well as contracting out of the administrative child support system.
However, it’s important to remember that by entering into a binding agreement, your financial obligations are just that – binding – regardless of a change in fortune.
In a recent case, a father filed an application seeking orders for a binding child support agreement to be terminated and arrears accrued of $4700 to be cleared.
The parents had entered into a binding child support agreement with each other three years previously, following final parenting orders being made regarding their two children.
At that time, one child was living with each parent. The agreement then, was that the father would pay the mother the amount of $1006 per month (indexed annually in accordance with CPI), and in addition he would pay 50 per cent of the tuition fees and expenses for school books and uniforms for the child living with the mother.
The child living with the mother then went to live with his father, and from that time communicated or spent very little time with his mother.
Despite this change in circumstances, the court dismissed the father’s application, on the basis that the court did not have the power or discretion to be able to intervene.
This case highlights the risk of entering into a binding child support agreement, and it’s vital to discuss including contingencies in the agreement.
If you have questions about child support, or any other aspect of family law, please contact Michael Lynch Family Lawyers on: (07) 3221 4300 or email: [email protected]