Binding child support agreement
A formal agreement for child support made in writing and signed by both parents. Legal advice is required before making a binding agreement.
You need to know
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.
After a child support agreement is accepted, we assess what the child support would be if the agreement wasn’t in place. We call this a 'notional assessment'.
We assess the amount of child support you should pay or receive if one or both parents apply for an assessment. We use a formula approved under Australian law.
Child support payments and Family Tax Benefit (FTB) Part A are closely linked. Child support may affect the amount of FTB you receive.
As a parent, you have responsibilities and rights. You can also choose how to arrange your child support in a way that works for you and the other parent.
A binding agreement can only end before the date specified in the agreement if the parents make a new binding agreement that ends the former one. If parents can’t agree to make a 'termination agreement', a parent may apply for a court order that sets aside the agreement. These court applications can be costly and complex.
If you want more information about ending a binding child support agreement, you should seek legal advice.
Once you’ve read about binding child support agreements, the next steps are to:
- decide if you’ll negotiate a binding child support agreement with the other parent
- use the Child Support Agreement form or draft your terms separately, with the help of a legal provider
- submit your agreement and any supporting documents
- apply either in writing or over the phone to have the agreement accepted
Paying child support
Collecting child support
The person who will receive child support can choose how the paying parent pays them.
This is where you and the other parent make and receive payments directly between you. It’s for parents who don’t need much help from us to agree on a plan.
This is where we collect and transfer child support payments for you.
We need to know about changes that could affect your child support.