Binding agreements for child support
Binding agreements are written agreements for child support signed by both parents after getting 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 Australia and holds a current practicing certificate. The legal practitioner must provide a statement they have provided the parent with independent legal advice and 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.
Your lawyer will provide you with more information about this type of agreement.
Lump sum payments
Binding agreements 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.
When a child support agreement is accepted, we 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 14 days from when it is issued to contact us and update their details if necessary.
The provisional notional assessment becomes a notional assessment 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. The amount of Family Benefit Part A you receive will be based on the agreement until the notional assessment is in place. The notional assessment is updated:
- every 3 years
- if the amount of child support payable under the agreement changes by more than 15%
- for limited agreements, whenever either parent asks for a new notional assessment