Child support agreements
From 1 July 2008, parents will have greater flexibility to make agreements about child support.
Separated parents can make agreements regarding how much child support is to be paid, rather than using the amount under the child support legislation. They can also make agreements regarding the way in which child support is paid, for example through periodic cash payments, non-cash payments (e.g. mortgage or rental payments, or school fees) or a lump sum payment (including by way of property settlement).
Binding child support agreements
- A binding agreement can be for any amount of child support that parents agree to, even if this amount is less than the child support formula amount.
- For an agreement to be registered as a binding child support agreement, each parent must obtain independent legal advice about the effect of the agreement and the advantages and disadvantages of making one.
- A binding child support agreement can only be terminated if both parents agree to do so after getting independent legal advice, or by a court order.
Limited child support agreements
- The Child Support Agency can also register a limited child support agreement, which can be made without obtaining legal advice.
- In a limited agreement the amount of child support payable must at least be equal to the child support formula amount.
- There must be a Child Support Agency administrative assessment in force before a limited agreement can be registered.
- A limited child support agreement can be terminated if the parties agree to do so; by either party after 3 years; by either party if the notional assessment changes by more than 15 per cent; or by a court order.
Agreements or orders for lump sum payments
- A binding child support agreement or a court order can provide for some or all of the child support to be paid by a lump sum instead of periodic payments. A lump sum payment includes a transfer of property.
- A Child Support Agency administrative assessment must be in force before the agreement or order is registered, and the lump sum payment must equal or exceed the formula assessment amount.
- If child support is paid by a lump sum, the Child Support Agency will credit the lump sum against the amount of child support payable under the administrative assessment. This will continue until the lump sum is reduced to nil, and then ongoing payments of child support will start again.
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