“[They] got one of your kids, got you for 18 years: Utilising Child Support Agreements so that everybody wins”

“[They] got one of your kids, got you for 18 years:  Utilising Child Support Agreements so that everybody wins”

“[They] got one of your kids, got you for 18 years:  Utilising Child Support Agreements so that everybody wins”

“His baby-momma’s car and crib is bigger than his”if ever a song generated ample work for family lawyers, it is Kanye West’s 2005 classic “Golddigger”. Sure, there’s an element of misinformation included in the lyrics, and it has lead to many of the population thinking that holler[ing] “we want pre-nup” is a sufficient asset-protection measure, but it was on the right track.

Other than increasing public awareness about Financial Agreements, it also dealt with child support. While the Child Support Agency has mechanisms by which you may object to an administrative assessment, what many people may not realise is that parents can reach their own agreement in relation to child support and, more importantly, document it so that it’s enforceable.   Child Support Agreements now form a valuable part of property settlement negotiations and may reduce acrimony because both parents are involved in the negotiation process. Parents may also want to “lock in” certain payments to third parties, such as health insurance or school fees (and additional educational costs). In these situations, a Child Support Agreement may be the way to go.

There are two types of formal Agreements:

  1. Binding Child Support Agreements; and
  2. Limited Child Support Agreements.

Not everyone will qualify for a Child Support Agreement, so best check with the Child Support Agency or a family lawyer if you’re not sure.

A Binding Child Support Agreement (“BCSA”) is a private contract-like Agreement between the eligible carer and liable parent.

The most significant advantage of entering into a BCSA is certainty. Both parties know exactly what their responsibilities are, and if all the boxes are ticked the way it should be, the Agreement is binding. The most significant disadvantage is the other side of the same coin. The Agreement will generally remain in force until the child is 18 years old. If one parent loses their job, the obligations under the Agreement will remain in force, regardless of the change in circumstances. There may also be flow-on issues regarding Family Tax Benefits and other government payments.

The downside is that it’s hard to overturn a BCSA. As in, it’s almost impossible to do. A number of fairly recent Court cases have indicated that the bar in relation to the above is set very high, and Applications to overturn a BCSA are rarely successful.

Given the pretty serious nature of the Agreement, both parties are required to obtain independent legal advice prior to signing.

Limited Child Support Agreements (“LCSA”) are generally more flexible compared to BCSAs. Unlike BCSAs, parties are not required to obtain legal advice prior to signing a LCSA.

To be registered by the Department, there must be an Administrative Assessment already in place and the amount payable pursuant to the LCSA must be the same or higher than the assessed amount. Upon registration, the Department issues a Notional Assessment stating the amount of child support payable but for the LCSA. This may affect Family Tax Benefits.

A LCSA may be terminated in the following circumstances:

  1. Replacing it with a further LCSA;
  2. By Court Order;
  3. If the notional assessment changes by more than 15% from the previous assessment, in a way not anticipated by the agreement, and either party wants to end it; or
  4. If it has been more than 3 years, one party wants to end the LCSA. You may do so by writing to the Child Support Registrar.

If in doubt, get legal advice about your options. With a well thought-out Agreement, maybe your car and crib will be the same size as your ex’s.

All content provided on this blog is for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site.  The owner of ButlersBlog will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information.

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Comments

Guest - Sharelle on Wednesday, 24 September 2014 05:44

I found this very interesting. Perhaps you could forward to the local media as a advice piece? I suggest the Stirling Times.

I found this very interesting. Perhaps you could forward to the local media as a advice piece? I suggest the Stirling Times.
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Wednesday, 21 August 2019