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What you need to know about binding and limited child support agreements

If you are not living with the other parent of your child you may be entitled to, or have to pay to the other, child support. Child support is designed to have both parents contribute to the costs of raising children. This is designed to include housing, food, clothing, medical costs, school expenses and day to day needs. 

The Department Of Human Services (‘DHS’), also known as the Child Support Agency, manages the assessment of how much child support is payable in each circumstance. This is based on a formula using both parents incomes, and the percentage of care between the parents. This is assessed based on the number of the nights the child or children spend in the respective parents care. 

Once as assessment is issued by DHS you have several options to arrange collection of child support: 

1. Enter a private arrangement to agree on the amount and payment of child support including potentially by way of school fees, private health premiums or extra-curricular expenses. This can be an informal agreement which means that it is not able to be enforced, or it can be within a formal child support agreement. 

Formal child support agreements can be by way of:

a. Binding agreement – This agreement can reflect any payment amount and time frame. Each party must obtain independent legal advice as to the long term effects of signing the child support agreement given it will be in place until the termination date (usually when the children obtain the age of 18 or they no longer reside with that parent). These agreements can only be varied or revoked by agreement between the parties, or an application to the Family Court; 

b. Limited agreement – This agreement must be for payment of child support in an amount equal to or more than the assessed amount payable in child support. Neither party is required to obtain independent legal advice. The agreement can be ended by either party after a period of three years, or if there is a significant change in circumstances, prior to that date. 

The agreements are then registered with DHS who are entitled to pursue the paying party for collection of child support. 

2. Have the child support agency collect the payments of your behalf. DHS have the power to collect payments through alternative methods including having the person’s employer deduct it from their wages and make the payment directly to the child support amount, recovering the amount from any government support, and deducting any amount owing from any tax refund they are entitled to from the ATO. Any arrears will continue to be accrue and will be required to be paid by on of the previously stated methods. 

Should you have any questions with respect to child support, please contact Stephanie Murray of Richardson Murray on 07 5619 5933.


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