Child Support in Australia
For many families experiencing separation and divorce the mere mention of the words "child support" can send chills down the spine! Whether or not the parties involved have negotiated an agreement themselves doesn't matter - there have been enough horror stories and media reports to scare anyone, and in some cases make it a difficult topic to raise.
How Much Child Support Will I Have to Pay or Be Paid?
The aim of child support is to ensure that the children of separated parents receive the financial support that both parents are responsible for providing.
Generally speaking, there are two main ways for parents to work out what their child support obligations will be, these are:
1. Negotiating their own Child Support Agreement or
2. Referring their case for assessment through Services Australia
Negotiating Your Own Child Support Agreement
Child Support Agreements allow parents to set their own terms as to the amount of child support that is to be paid, and/or children’s expenses that will be paid by each parent. These Agreements allow parents to be more flexible with their arrangements because they are negotiated between the parents. To be eligible for child support under an agreement, a parent must have at least 35% of care of the child/children.
Payments under an agreement, can be recovered privately by a parent or through Services Australia. To enable Services Australia to enforce the agreement, it must be sent to Services Australia, and registered with them.
There are two main types of Child Support Agreements:
i. Limited Child Support Agreements
A limited child support agreement is a written agreement between the two parties that must be signed by both parents. Whilst it is not a requirement that legal advice be obtained before entering the agreement, it is strongly recommended to ensure you understand your obligations and rights.
The amount to be paid under the limited child support agreement should be at least the same as a notional assessment of child support by Services Australia, or more than that figure. This means that an assessment must be firstly obtained before proceeding with a limited child support agreement.
A limited agreement will end in circumstances such as:
• a Court making different orders regarding child support
• the parents entering into a new agreement
• the notional assessment of child support changing by more than 15% in circumstances not contemplated by the parents at the time of the agreement
• the recipient of payments ceases to be an eligible carer.
ii. Binding Child Support Agreements
Binding child support agreements must also be in writing and signed by both parents. However, when a binding agreement is made both parents must seek independent legal advice beforehand on the effects of the agreement and the advantages and disadvantages to a party at the time of entering into the agreement.
A binding agreement can stipulate any amount of child support the parties choose to agree upon, and can even include lump sum payments (including the transfer of property). There is no requirement for a child support assessment to be obtained first or for the amount payable under the agreement to be equal to or more than the assessment amount. This is one of the main differences between the two types of child support agreements.
A binding child support agreement can only end in circumstances such as:
• a new binding agreement is made and there is provision for the previous binding financial agreement to be terminated;
• a termination agreement is made by the parents;
•a Court makes orders concerning the amount of child support payable;
• the recipient of payments ceases to be an eligible carer.
Child Support Assessments
Given the emotive nature of child support, and the fact that for many couples may be in an ongoing dispute about parenting or financial support, many parents choose to refer their child support arrangements to Services Australia. This involves an application for a formal child support assessment, which can be made by either the parent with whom the child lives, or the 'non-custodial' parent.
When an application is made, Services Australia calculates the amount payable using a specified formula. This formula takes into account various factors specific to each application, including the amount of care provided to the child/ children by the parents, their income and the age of the child/children.
Once an assessment is made, there will be an obligation for a parent to pay the amount assessed to the other parent. Services Australia can collect the child support assessed directly from the parent required to pay child support.
The First Steps
When parents separate, it is always best to speak to a lawyer about your rights and your obligations - especially when it comes to supporting your children. For more information on child support, contact our experienced family law team.
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