Binding child support agreements should be clearly drafted, as ambiguity gives rise to disputes. This includes being specific about dates, payees and amounts. Larger costs such as school fees, medical expenses, travel and other activities all add up, so they should be included.
When are binding child support agreements used?
Binding child support agreements are used when parents want certainty and control over long-term arrangements and want to lock in those terms with legal enforceability. They allow parents to agree on an amount that is higher or lower than the standard formula.
Parents who want more privacy or control over their child support arrangements may prefer this method. They are particularly helpful for high-income families or for families with anticipated future expenses.
Even when you’re on good terms, a binding child support agreement keeps things transparent and predictable. It sets out exactly who pays what, when and for which costs, so you don’t have to reopen the money conversation every time incomes change or a new expense occurs. Because it can’t be changed unilaterally, it prevents sudden shifts, protects the goodwill you’ve built, and helps you both stay focused on the kids instead of constantly renegotiating.
Requirements for binding child support agreements
Before entering into a Binding Child Support Agreement, parents must follow guidelines and legal requirements as outlined by Services Australia.
Independent legal advice for both parties
Each party must receive independent legal advice before entering into this agreement, so they are aware of its advantages and disadvantages and are not compelled to enter into it due to coercion. This is covered in Section 80C of the Child Support Assessment Act 1989. A copy of the legal advice certificate for each party must be attached to the agreement.
Agreement must be in writing and signed by both parties
The agreement must be in writing, signed by both parties, and include a statement that each has received legal advice from a qualified legal practitioner.
Apply to register with the Child Support Registrar
Once the agreement is signed, either party can apply to the Child Support Registrar for acceptance. Once accepted, it becomes enforceable under Australian law.
Care requirements
To receive payments under a binding child support agreement, the receiving parent must have the child in their care at least 35% of the time. The child support agreement may end if the receiving parent’s percentage of care falls under 35%.
Amendments
If you want to modify an existing binding child support agreement, you can’t simply amend it informally. Changes must involve both parties obtaining independent legal advice, and each must sign and initial the changes following formal legal counsel.
When is a child support agreement not legally binding?
To be binding, these types of agreements require independent legal advice for each party represented. An agreement may not be regarded as valid in these circumstances:
- If one party is a qualified legal practitioner and provides legal advice to the other party or themselves.
- The same practitioner provides legal advice to both parties.
- When one party does not receive legal advice.
- If there is any concern about financial pressure or coercion into signing the agreement.
What is included in binding child support agreements?
A binding child support agreement can include:
- The amount and frequency of child support payments from one parent to the other.
- Additional financial items such as school fees and health insurance.
- Third-party payments include payments to service providers or for extracurricular activities.
The agreement can also include conditions for varying or terminating support in the future, such as when a child reaches adulthood or completes their education.
How are payments made?
Once the agreement is binding, the parents can agree on how and when to make and receive the payments. The receiving parent can opt for one of two options:
Private collect
In the case of private collect, one parent makes a payment directly to the other, and it is ideal for parents who have an amicable relationship and can come to a mutual agreement with minimal external assistance. The receiving parent should be able to rely on on-time, full payments. Both parents can work out how to make and receive payments.
Child support collect
Only the receiving parent can apply for the child support collect option, and it works when it is hard for both parents to communicate with each other, or you want help to ensure the payments are made on time.
Paying parents must ensure all child support payments are made on time and in full. Both parents must ensure to inform Services Australia about the care arrangements in place and must report income accurately.
Comparison with other family law agreements
As family law encompasses diverse situations, different types of agreements serve different purposes, so it is important to understand their differences when compared with binding child support agreements.
Binding financial agreements
Binding child support agreements deal with child support only, while binding financial agreements deal with property, money and spousal maintenance. Both require independent legal advice and a legal certificate. Both are enforceable under law, but through different legislation, as they cover different needs.
Parenting agreements
Binding child support agreements are about child support payments, while parenting agreements cover the care of children, including living arrangements, time with each parent, schooling and more. Parenting Agreements can be either informal (Parenting Plan) or formal (Consent Orders). Parenting Plans are not enforceable, but Consent Orders are enforceable by the court.
Limited agreements
Unlike binding child support agreements, limited agreements do not require legal advice and must either equal or be more than the assessed amount. These types of agreements can be ended more easily if circumstances change. Binding child support agreements are more suitable for parents who seek long-term certainty, while limited agreements are better suited for parents who prefer a less binding option.
Changing or ending the agreement
Binding child support agreements may be complex to amend, but it is possible if circumstances change.
If it does not support changes, then you will need to end it and make a new agreement that either terminates or replaces the existing one. As the agreement is legally binding, any variation or termination must be done formally. Both parents need to enter into a new written agreement, and each must again obtain independent legal advice with signed certificates from their lawyers.
A binding child support agreement can also be set aside by a court in limited circumstances, such as fraud, duress or if a significant change in circumstances makes the agreement unfair or impracticable. For example, if one parent loses their job or if a child has a sudden medical requirement.
Advantages and disadvantages of a binding child support agreement
Binding child support agreements can offer parents a high level of certainty and flexibility. They allow you to set out exactly how child support will be paid, whether through regular payments, lump sums, or even covering specific costs like school fees or health insurance. As they are legally enforceable, they provide security for both parents and reduce the risk of disputes down the track.
However, the flip side is that they are difficult to change or end once signed. Both parents must obtain new legal advice and enter into another agreement, or apply to a court in limited circumstances such as fraud, duress or significant changes in circumstances. This makes them less adaptable if your financial situation or your children’s needs change significantly over time.
They also do not work for parents who cannot agree on child support payments and need court intervention.
The role of legal advice
For a binding child support agreement to be legally valid, both parents must obtain independent legal advice from a qualified lawyer before signing. This ensures that each parent understands the effect of the agreement, including their rights, responsibilities and the financial implications.
Legal advice helps prevent one parent from being pressured and must cover the advantages and disadvantages of the agreement. Without legal advice, the agreement won’t be recognised as binding under the Child Support (Assessment) Act 1989.
Certificates of legal advice must be signed and attached to the agreement. Failing to comply with these steps makes the agreement invalid.
Is a binding child support agreement right for you?
Binding child support agreements work for some parents who want a high degree of certainty and can come to a mutual understanding about payments. As they are highly binding, both parents must agree to get independent financial advice before signing. This may not be the same case for all parents, so it is essential to explore your legal rights and whether this is the right option for you through informed legal advice.
At Arcadian Legal, our team has extensive experience in drafting, reviewing and advising on Binding Child Support Agreements. We have a thorough understanding of the laws that govern these agreements and take care to ensure they are drafted to be fair, legally enforceable and in the best interests of the child, while safeguarding your rights.
