Can parents reach an agreement in lieu of having an assessment?

Parents can enter into a child support agreement made by consent to provide child support rather than relying on the child support formula method. A formal child support agreement between both parents can cover cash payments, non-cash items such as school fees or a combination of cash payments and non-cash items.

There are two types of child support agreements recognised by Services Australia, these are:

• Limited Child Support Agreement, which are a formal agreement between the parents about child support that does not need independent legal advice. There must be a child support assessment in place before it can be accepted by Services Australia and that payments put in the agreement must be equal to, or more than, the annual rate in the assessment. This type of agreement can be terminated by either party after a period of three years.
• Binding Child Support Agreements, which are a written agreement between the parents about child support payments. Each party must obtain independent legal advice before entering or terminating this type of agreement. A Binding Child Support Agreement provides for long term arrangements and can only be terminated in extremely limited circumstances. They may provide for a lower rate of child support than what would be payable under the assessment formula. This form of agreement can include lump sum payments and a transfer of property which is then able to be credited to a child support liability instead of periodic payments.

Parents need to consider the effect of entering an Agreement on any ‘Family Tax Benefit Part A’ payments that the parent receiving child support may be entitled to.

Our family lawyers can assist you by drafting an agreement that meets your unique requirements and the best interests of your children.

Lump Sum Payments

It is possible for a parent to make a lump sum payment through a Child Support Agreement. A lump sum payment to a parent is treated as a credit towards child support payments. It is not a replacement of periodic payments and does not alter the assessed amount to be paid.