Child support is more often than not an issue at the centre of hot debate and media attention and is one of the more controversial areas of family law.
In a recent segment on A Current Affair, they explored and “investigated” people who have accrued significant arrears over time. And when we say “significant”, we mean arrears owing in amounts upwards of $95,000 – staggering, right? Following separation, for many people child support emerges as one of the most important and impactful considerations. It is no secret that raising children is expensive. But there are a number of different aspects to consider in relation to child support and, in this article, we will look at the different types of child support arrangements that can be devised and implemented.
Child support assessment
A child support assessment is conducted and issued by the Department of Human Services, colloquially referred to as the Child Support Agency (“CSA”). The CSA utilises a unique formula to calculate the funds one parent or carer is to receive, and the amount the other parent or carer is required to pay. The assessment considers a child’s essential needs – food, water, clothing and shelter. Additional expenses, such as private school fees, medical expenses or costs relating to extra-curricular activities, are not accounted for in the assessment. Once the assessment is issued, parties can agree for the child support to be paid by way of “private collect”, whereby the parties directly transfer the funds between themselves; or the parties can elect that the CSA collect the funds from the payer and distribute it appropriately to the payee.
Helpfully, the CSA has made available online a child support estimator where anybody can obtain an estimate of the assessment that is likely to issue relevant to them. You can access this tool here.
Binding child support agreement
An alternative to a child support assessment is a binding child support agreement. This is a legally binding and formally documented agreement between the parties in relation to the financial support of the children. The agreement can cover a range of matters, and provides a level of flexibility with respect to how child support can be paid. For example, the agreement can provide for lump sum or periodic child support (in an amount greater or lesser than the child support assessment) to be paid, it can provide that the parties are “contracting out of” periodic child support and provide for a party to meet expenses outside of the basic necessities (such as medical, dental, private health and/or school fees) and can specify circumstances in which the agreement may be terminated. Once the parties have entered into the agreement, it is registered with the CSA. It is important to note that when entering into a binding child support agreement, both parties are required to have legal representation pursuant to the Child Support (Assessment) Act 1979 in order to ensure they are adequately and appropriately advised in relation to the agreement.
Limited child support agreement
Unlike a binding child support agreement, the law also enables parties to enter into a binding agreement regarding the payment of child support without the necessity for legal advice; a limited child support agreement. Like a binding child support agreement, a limited agreement can direct the payment by one party to the other of a cash amount or, alternatively, can address the additional expenses such as school fees and health insurance.
A limited agreement is, however, only an option if:
- an assessment has issued from the CSA;
- the payments in the limited agreement are equal to, or more than, the annual rate in the assessment;
- the recipient must have at least 35% care of the children.
Limited agreements are also easier to terminate than binding child support agreements.
Parties may reach an agreement between themselves in relation to the financial support of the children. There is no requirement that such an agreement needs to be documented, however, in the absence of documentation the agreement would not be binding and enforceable.
Child support is an important consideration following a separation and a specialist family and divorce lawyer in Toowoomba can assist you in determining and implementing appropriate arrangements for your family based on your specific circumstances.