About binding child support agreements

A binding child support agreement allows you to make an agreement about your child support payments and how they are paid.

Except for lump sum binding agreements, you can make a binding agreement whether you already have a child support assessment or not.

It can be made for any amount that you and the other parent agree to. Your agreement may include payment of cash or non-cash items, such as school fees or health insurance.

All parties to the agreement must get independent legal advice before making or ending a binding agreement.

The legal advice you get must be from a legal provider. They must have been admitted by the Supreme Court of a state or territory of Australia and hold a current practicing certificate.

You need a legal certificate signed by a legal provider and it needs to be attached to the agreement. The certificate confirms you’ve received legal advice. We can’t accept your binding agreement without it. The binding agreement must also contain a statement that you received the legal advice before you signed the agreement.

We recommend legal providers give us a draft of your binding agreement before it’s signed so we can check that:

  • it satisfies the legal requirements of child support legislation
  • it does what both parents want it to do, and
  • we can administer any clauses that will apply if the parents’ circumstances change in the future

Lump sum payments

You can make a binding agreement if you agree that a privately made lump sum payment or the value of a property transfer can be used as a credit balance to meet your future child support. The lump sum is credited at 100% or you can specify a lower percentage. You can also specify the child support amount that would otherwise apply under your agreement. The lump sum will be credited against that amount.

You must have a child support assessment in place before the agreement is accepted. The lump sum, or the value of a transferred asset, must be equal to or greater than the annual child support rate under the current assessment.

At the end of each year’s assessment, the lump sum payment will be credited at 100% of the child support payable or at a lesser rate if specified in the agreement. The remaining lump sum amount will be indexed every year by the Consumer Price Index. When the lump sum amount is reduced to nil, child support under the child support assessment or your agreement (if you have specified a rate) will be payable.

Binding agreements and your family payments

You can agree on amounts less than the child support assessment. When this happens, we’ll still use the amount from the child support assessment to calculate your Family Tax Benefit (FTB). This is called a notional assessment.

Page last updated: 3 January 2017

This information was printed Monday 27 March 2017 from humanservices.gov.au/customer/enablers/about-binding-child-support-agreements-0 It may not include all of the relevant information on this topic. Please consider any relevant site notices at humanservices.gov.au/siteinformation when using this material.