Child support is a payment from one parent to another for the financial benefit of a child or children of a relationship or marriage that has ended. The payments are monitored by the Department of Human Services (‘DHS’), which was previously known as the Child Support Agency.
If parents are able to reach an agreement regarding the payment of child support, which differs to the assessment by DHS, they are able to formalise this agreement then lodge it with the Registrar at DHS for review, this agreement must be in writing.
There are four types of agreement:
- Limited agreement;
- Binding agreement;
- Transitional binding agreement; and
- Lump sum agreement.
A limited child support agreement (‘limited agreement’) is an agreement between parents where the child support payable is equal to or exceeds the amount assessed by the DHS.
The limited agreement can be concluded by:
- either party providing written notice of termination (this must be after 3 years);
- inputting a new limited or binding agreement;
- a written agreement stating that the old agreement has concluded;
- the assessment of child support by the DHS changing by more than 15%; or
- a Court Order.
A binding child support agreement (‘binding agreement’) is an agreement where the child support payable can be less than the amount assessed by the DHS. In order for a binding agreement to be accepted both parents must have obtained independent legal advice. The legal practitioner that provides each parent with advice must provide a statement vouching his or her provision of legal advice and the parent receiving the advice must sign an acknowledgement of the advice.
The binding agreement can be concluded by:
- another binding agreement being entered by the parents; or
- Court Order.
Transitional binding child support agreements (‘transitional agreements’) are effectively binding agreements, which were entered by parents prior to 1 July 2008.
A lump sum agreement is the agreement for the child support payable to be paid in a ‘lump sum’. This payment can include the transfer of property. In order for a lump sum agreement to be accepted, there must be a child support assessment and the lump sum that is payable must be either equal to or greater than the amount assessed by the DHS. Parents can agree for the lump sum payment to be credited at a specific rate in their agreement.