By Cassandra Selvaggio – Principal Lawyer
Parents have a legal duty to financially support their children. Section 3 of the Child Support (Assessment) Act 1989 stipulates that this duty is paramount and, “is not of lower priority than the duty of the parent to maintain any other child or another person.”
The Child Support Agency (CSA) governs child support payments between separated parents by way of an administrative assessment. The assessment is based on a complex formula that considers the costs of the child, the child’s care arrangements and the parents’ income, amongst other things.
Separated parents can reach agreement about child support. A private child support agreement can include payment of cash (periodic payments) and payments towards school fees, health insurance and extracurricular activities (non-periodic payments).
You can formalise a private child support agreement using a Limited Child Support Agreement (LCSA) or a Binding Child Support Agreement (BCSA). There are some key differences between the two types of agreement, including:
- A LSCA requires an administrative assessment set by the CSA. A BCSA does not.
- Payments in a LCSA must be equal to, or greater than, the administrative assessment. Payments in a BCSA can be less than the administrative assessment that would otherwise apply.
- There is no requirement for legal advice before entering into a LCSA, although we strongly recommend you speak to a family lawyer before signing. Parents who wish to formalise their agreement by way of a BCSA must obtain independent legal advice prior to signing. The lawyer for each party must sign and attach a Certificate of Independent Legal Advice to the BCSA for it to be binding and legally enforceable.
- A LCSA operates for a maximum of 3 years. After this time, the agreement can be unilaterally terminated by either party. A BCSA is final and can only be terminated with the consent of both parties, after receiving legal advice, or by way of a terminating event as defined in the agreement.
If you are thinking about entering into a private child support agreement, consider the following:
- Will the care arrangements for your child stay the same or will they change? If they are likely to change, will it be significant?
- Are your personal circumstances likely to change? For example, will you remarry? Will you have more children?
- Are you financially responsible for other dependants who will not be covered by the agreement?
- Are you in good health and able to continue working to meet your financial obligations in the agreement?
- What type of industry do you work in?
- If your financial circumstances change, will you be able to continue to pay the child support required by the agreement?
- Do you have an amicable co-parenting relationship with your former partner? Can you navigate changes to your personal circumstances and finances between you?
Child Support is a complex area of the law which requires careful and considered legal advice tailored to your unique situation. If you would like to discuss your options regarding child support, please call us on (03) 8672 5222 to arrange a time to meet with one of our family lawyers.