News

12 October 2018

Changes to binding child support agreements

On 1 July 2018, a number of changes came into effect in relation to binding child support agreements.  Before highlighting the important elements of these changes and their significance, it is useful to look at what exactly a binding child support agreement is.

What is a child support agreement?

A child support agreement is an agreement made between the parents of a child or children as to the way child support will be paid, and in some cases, how much child support will be provided.

Child support agreements in Australia fall into one of two categories:

  1. limited child support agreements (limited agreement); or
  2. binding child support agreements (binding agreement).

A limited agreement is registered with the Department of Human Services.  There must be a child support assessment in place and the amount of child support paid annually under the agreement must be at least equal to the child support assessment.  The limited agreement can only remain in place for a maximum of three years.

A binding agreement can be entered into without a child support assessment in place.  The parents are responsible for determining all aspects of the agreement.  Both parents must obtain independent legal advice before entering into a binding agreement. The binding agreement will remain in place until it is either terminated by agreement of the parties or court order or, under the new changes, the care arrangements change, as set out below.

The changes

The new changes provide for the termination of binding agreements when the care arrangements for the child/children have significantly changed since the agreement was entered into.

Where the person receiving child support stops having at least 35 per cent of all overnight care of the child/children, the agreement will be suspended.  In this event the person becomes a ‘former carer’, and unless they return to having at least 35 percent care of the child/children within 28 days, or in some circumstances 26 weeks, the binding agreement will be terminated.

The circumstances where the suspension period will be 26 weeks are:

  1. where agreement specifically allows suspension for longer than 28 days;
  2. all parties to the agreement request a longer suspension; or
  3. the registrar finds that there are special circumstances warranting the extension of the suspension period.

Once the suspension period is over, if the Department of Human Services has not been notified that care arrangements have returned to normal, they will contact the parties to inform them that the agreement is terminated from the date the person receiving child support stopped having at least 35 per cent care.

Parties will then need to either enter into a new child support agreement or apply for an assessment of child support through the Department of Human Services.

Key takeaways

So what is the importance of these changes and why should you be concerned?  These changes apply retrospectively which means that if you already have an agreement in place these changes will apply to your agreement.

In light of these changes we recommend that anyone who already has agreements in place seek legal advice to ensure that their agreements and arrangements still comply after the changes to the law.  For those considering entering into an agreement, any agreement made should be made in light of these changes.  Our Cairns family lawyers can review your current agreement and provide you with strategic advice.

Our Cairns family lawyers have extensive experience in dealing with child support agreements and child support. Should you have any questions about this article, child care arrangements or any aspect of family law, please do not hesitate to contact us.

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