The different types of Child Support Arrangements

Child support can be managed between the parties in a number of ways. Some parents prefer to and are able to have very flexible and informal arrangements between them. Others prefer that their arrangements are managed via the Child Support Agencies – and other parents formalise their arrangements via a Private Agreement. 

A private Agreement determines how the expenses which may not necessarily be covered or considered sufficient under a child support assessment, completed through the Child Support Agency, would be paid by each parent.

Taking the first step 

The first step is to determine how you, the parents, want to manage your child’s support.  Irrespective of whether the Child Support Agency is managing the child support or if you have a private agreement in place, as a parent, it is your obligation to ensure that:

• If you are the paying parent, that the full amount is paid on time;
• Within the recommended period of time your tax return is lodge;
• Your income is reposted accurately; and
• If there is any change in your circumstances, you’ll need to inform the government.

The Child Support Agency

The Childsupport agency uses a formula which takes into consideration each parents circumstances to determine the amount of child support which is to be paid.

This formula takes into consideration the following:

• The amount of time each child spends with each parent;
• The age of each child; and
• Each parent’s income and their combined income.

After an application for a child support assessment has been made, the Child Support Agency will contact the maker of the application and discuss the options for collection.

It is important to note that the agency’s formula does not take into consideration an allowance for private school fees or health insurance premiums and or any additional payments made under a private agreement. 

Child Support Private Agreements

The Child Support (Assessment) Act 1989 sets out that there are two types of agreements which are taken into consideration or alter the amount of child support which is to be paid.  

The considerations which are taken into account are: 

• The payment of private school fees;
• The payment of uniforms, books and extra-curricular-activities;
• The payment of private health insurance; and
• Any additional costs due associate to the child/s with ‘special needs’.

It is important to understand what the act sets out when arranging a private agreement. 

There are two types of Private Child Support Agreements:

1. Limited Child Support Agreements and
2. Binding Child Support Agreements.

What’s the difference between Limited Child Support Agreements and Binding Child Support Agreements?

Both agreements will formalise their child support arrangements.  Both agreements are required to be signed by the parties and will need to be lodged with the Child Support Agency.  

However, as both agreements are different it is important for you to carefully consider which child support agreement is right for you.

For more information or to discuss your situation, please contact us on 1800 662 535 for a FREE 20-minute consultation.

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Article Source: Child Support Agency – https://jamesnoblelaw.com.au/the-different-types-of-child-support-arrangements/