child support agreement Archives

If you are paying or receiving child support payment, then you can apply to the Child Support Agency to change the child support assessment in special circumstances.

The administrative process is set out in Part 6A of the Child Support (Assessment) Act 1989 (Cth) for a child support assessment to be changed, in limited situations. The Child Support Agency sets out ten reasons which allow a person to bring an application for changing child support assessment pursuant to the Child Support (Assessment) Act 1989 (Cth).

In our experience, some of the reasons that are commonly relied upon by a parent for changing the assessment are:

Reason 2 – The costs of maintaining a child are significantly affected by high costs associated with the child’s special needs.
Reason 3 – The costs of maintaining a child are significantly affected by high costs of caring for, educating or training the child in the way both parents intended.
Reason 8 – The child support assessment is unfair because of the income, earning capacity, property or financial resources of one or both parents.

An applicant cannot simply apply for change of assessment because they think the assessment is unfair. They must nominate at least one of the ten reasons in their application as well as provide details of their financial circumstances. There are also legal elements that the application must satisfy under these reasons, with relevant evidence and reasoning.

The application is usually lodged with the Child Support Agency. The Child Support Agency has the power to set a new annual rate of child support in substitution of the original assessment.

Two common situations that may trigger an Application for change in child support

Liability to pay cost towards private schooling

Where a child has attended a public school prior to the parents’ separation, and subsequent to separation, one parent enrols the child in a private school without consulting with the other parent, an application for changing the child support may be made under Reason 3.

Generally, unless a parent has consented to contribute towards private school fees, he or she should not be obliged to contribute. This would also be in the case where a parent has not consented to the child attending that school.

In some special circumstances, a parent may have to contribute towards private schooling even though they may not have consented or being consulted on the matter. This is only if there is clear evidence that it is in the best interest of the child to attend private school as opposed to attending public school. It may be appropriate in this case for he or she to contribute towards the private school fees.

Earning capacity of a parent

A parent may also change their child support assessment under Reason 8 in cases where the other parent decides either to give up work completely, or to adjust their financial

position so they do not earn nearly as much as they did before. This may be done to avoid their child support obligations or has the benefit of financial resources (such as an interest in a business or company).

In these kinds of situations, the Child Support Register may change the child support assessment based on the other parent’s higher earning capacity, not the actual earnings. The Child Support Register may look at the parent’s ability to work, whether there is an opportunity to work, and their willingness to work.

Next Steps

An application for change in a child support assessment allows the parties to respond to unanticipated changes in the parents’ and children’s lives. Such applications have long lasting effects, as these payments will generally continue until the child or children turn 18.

If you have any questions about your family law issue, please contact our office for your free initial consultation with one of our family lawyers.

A Child Support Agreement is a useful tool for parents to use where there is agreement as to the amount of child support payable.

Child Support Agreements bypass the use of the Child Support formula to allow parents to agree on terms of payment.

How do you create a Child Support Agreement?

There are two (2) ways in which a Child Support Agreement can be formulated:-

1. Binding Child Support Agreement

Binding Child Support Agreements are written agreements for child support signed by both parents after getting independent legal advice about entering into or ending an agreement.

This legal advice must be provided by a legal practitioner who has been admitted by the Supreme Court of a State or Territory of the Commonwealth of Australia and holds a current practising certificate.

The legal practitioner must provide a statement they have provided the parent with independent legal advice as to the effect of the agreement on their rights and the advantages and disadvantages of entering into such an agreement.

The agreement must include an acknowledgement of this advice.

A Binding Child Support Agreement can be made and accepted, even if a child support assessment has not been made. The agreement can be made for any amount that both parents agree to.

2. Limited Child Support Agreement

Limited Child Support Agreements are formal agreements for child support that are in writing and signed by both parents.

Legal advice is not needed before entering into a Limited Child Support Agreement.

Before the Department of Human Services (Child Support) (“the Department”) can accept a Limited Child Support Agreement:

there must be a child support assessment already in place; and
the annual rate payable in the agreement must be equal to, or more than the annual rate of the child support assessment.

Importantly, a Limited Child Support Agreement can only be in place for a maximum of three (3) years. After this time, either parent can terminate the agreement.

Lump sum payments

A Child Support Agreement can include lump sum payments including transfer of property, to be credited as child support, instead of monthly cash or electronic payments.

A child support assessment must be in place for lump sum payment agreements.

The lump sum must be equal to or greater than the annual child support rate under that assessment.

The lump sum will be credited at the rate of 100% of the child support payable, or at a lesser rate if specified in the agreement.

The remaining lump sum will be indexed every year by the Consumer Price Index as published by the Australian Bureau of Statistics (“the ABS”).

Notional assessment

When a Child Support Agreement is accepted, the Department will make a provisional notional assessment of how much child support would be payable if an agreement was not in place.

The provisional notional assessment is given to both parents to check that their circumstances are properly reflected.

Parents have fourteen (14) days from when it is issued to contact the Department and update their details, if necessary.

The provisional notional assessment becomes a notional assessment fourteen (14) days after it is issued or when all requests to vary details have been finalised.

The notional assessment amount is used in calculating the relevant amount of Family Tax Benefit Part A as determined by the Australian Department of Human Services (Centrelink) (“Centrelink”).

The notional assessment is updated:

every 3 years;
if the amount of child support payable under the agreement changes by more than 15%; and
for limited agreements, whenever either parent asks for a new notional assessment.

When is a Child Support Agreement terminated?

The child support legislation provides that a child support agreement may be terminated by:-

entering into a new agreement;
a court order; and
if a Limited Child Support Agreement is more than three (3) years old.

Parties to a Child Support Agreement are not able to vary the terms of the agreement.

A new Child Support Agreement must be entered into.

How is a Child Support Agreement set aside?

If either party are able to establish the following grounds, a Court may set aside a Child Support Agreement:

where the agreement of one of the parties was obtained by fraud, undue influence or unconscionable conduct;
where there has been a significant change in circumstances;
where the annual rate of child support payable under the agreement is not proper or adequate; or exceptional circumstances arise after the agreement is made.