When relationships break down and parents separate, financial support for children is generally determined by an administrative assessment of child support by the Child Support Branch of the Department of Human Services. An administrative assessment is made using the formula set out in the Child Support (Assessment) Act 1989. The Child Support (Registration and Collection) Act 1988 covers matters relating to registration and collection, departure orders and internal objection proceedings and court reviews.
The amount of child support payable depends upon the care arrangements for the children, their ages and the respective taxable income is of their parents. In most instances, the flexibility of the administrative assessments are sufficient to respond to changes in the income of the parties and the children's care arrangements. Parents also have the opportunity for determinations in relation to departures from the statutory formulas and administrative and judicial review is available.
Sometimes, however parents seek advice about the advantages and disadvantages of contracting out of the legislation for administrative assessments. The catalyst for such advice is usually the negotiation of a property settlement and a desire for certainty in relation to the payment of child support. Occasionally, being able to negotiate private arrangements in relation to future child support offers more opportunities for structuring a property settlement.
There are 2 types of agreements:
- Limited Child support agreements and
- Binding Child Support Agreements.
In our next article we will discuss the characteristics of each of these types of agreements.
Both agreements must comply with certain provisions, including:
A. They must be in relation to a child for whom an application for an administrative assessment is entitled to be made on the day the agreement is entered into. We therefore request that clients provide us with their Child Support Assessment, and any current correspondence from the Child Support Registrar (CSR).
B. The agreement must be made between parties who are able to apply for an administrative assessment of child support for the child, on the day the agreement is entered into.
C. A party to the agreement must apply, whether in writing or verbally, for the agreement to be accepted by the CSR. There are time limits in relation to applying for a child support agreement to commence, and this might depend upon whether child support is already being paid pursuant to a child support assessment or not.
D. The agreement must include one of the following provisions:
a. periodic child support payments;
b. a variation of such periodic payments;
c. non periodic payment provisions other than in the form of periodic amounts, and which may reduce the rate of child support payable under a child support assessment. These usually include 3rd party payments such as school fees, health insurance and medical/dental expenses;
d. provisions that might be included in Child Support Departure Order, made by a court; and
e. lump sum provisions.
If you are considering the costs and the benefits, the advantages and disadvantages of contracting out of the child support legislation, then our team of family law specialists are available to assist you.