Child Support Agreements are 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.
For example, some parents may wish to enter into a Child Support Agreement for a parent to pay for the school fees, extra-curricular activities and health insurance for a child rather than an amount assessed payable by the Child Support Agency. There are two ways in which a Child Support Agreement can be formulated:-
1. Binding Child Support Agreements
In order for parties to enter into Binding Child Support Agreements, they must have obtained independent legal advice. The legal practitioner must sign a statement to acknowledge that their client has been advised as to the effect of the agreement on their rights, and the advantages and disadvantages of entering into such an agreement. Parties must have obtained independent legal advice prior to signing the Binding Child Support Agreement in order for the Agreement to be binding.
As with Child Support payments as assessed by the Child Support Agency, a Binding Child Support Agreement can be terminated upon the child finishing high school or obtaining the age of 18 years of age, whichever occurs first.
2. Limited Child Support Agreements
Limited Child Support Agreements do not require the parties to obtain independent legal advice. The must be in writing and must be signed by both parties.
The amount of child support payable under the terms of the Limited Child Support Agreement must be an amount equal to or greater than the amount of child support that would otherwise be payable if assessed by the Child Support Agency.
Importantly, a Limited Child Support Agreement can only be in place for a maximum of three years. After this time, either party can terminate the agreement.
How is a Child Support Agreement terminated?
The child support legislation provides that a child support agreement may be terminated by:-
- Entering into a fresh agreement;
- By agreement in writing;
- A court order; and
- If a Limited agreement is more than three years old.
Parties to a Child Support Agreement are not able to vary the terms of the agreement. A new agreement must be entered into.
How is an 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.
A mother and father entered into a binding child support agreement. The agreement provided that the mother receive a lump sum payment of $200,000.00 from the father. At the time of entering into the agreement, the children were spending near equal time with both the mother and the father.
The mother brought an application to set aside the binding child support agreement on the basis that one of the children had ceased spending any time at all with the father. The mother argued that this had been a significant change in circumstances that warranted the binding child support agreement being set aside.
The court agreed with the mother that one of the children not spending any time with the father was an exceptional circumstance. However, the mother was required to show that she or the children would suffer hardship if the agreement was set aside. The mother was not able to show this and therefore, the binding child support agreement was not set aside.
For confidential advice and assistance about your family law situation, please contact Queensland Law Society Accredited Specialist in family law, Tuskeen Jacobs at firstname.lastname@example.org or 07 3009 8444.