Child Support is commonly known to be managed by the Child Support Agency, where the amount paid to the primary carer for the care of a child is calculated based on a formula created by the Agency. 

The formula created by the Agency looks at the child’s age, how many nights that the child spends with each parent, and the income earned by the parents. Child support can be collected either through the Agency or privately between the parents. 

Child Support Assessment

By assessing child support through the Agency, the amount assessed to be payable by one parent to the other is to cover the child’s expenses including schooling, education, and health. However, it is often the case that the amount assessed by the Agency is insufficient to cover the child’s expenses, especially if the child attends a private school. 

If you and the other parent have agreed on a set amount of the child support payment, you may wish to formalise this arrangement through a Binding Child Support Agreement.

A Binding Child Support Agreement is a formal written document that is signed by both parents after they receive independent legal advice. The amount specified in the Binding Child Support Agreement can be a lump-sum payment or periodic payments (i.e. weekly, fortnightly, or monthly) and can be greater or less than the child support amount assessed by the Child Support Agency. 

Binding Child Support Agreement

The benefit of entering into the Binding Child Support Agreement provides certainty that the payment towards a child’s education (such as private schooling), health (such as private health insurance), and their extra-curricular activities will continue, as outlined in the Agreement. This is highly important in circumstances where there was a sole income earner for the family, who can continue to financially support the child’s expenses such as schooling, health, and extra-curricular activities. 

There may be terms in the Agreement which outline that one parent will cover 100% of the child’s private school fees or their private health insurance rather than the payment going from one parent to the other to cover such fees. 

It is important to seek legal advice on what options are available to you and how best to structure the Binding Child Support Agreement for your specific case. 

Limited Child Support Agreement

Alternatively, if the parties do not wish to seek legal advice regarding their Binding Child Support Agreement, another option is to enter into a Limited Child Support Agreement. You do not need to obtain independent legal advice to enter into the Limited Child Support Agreement. However, there must be a child support assessment in place. The amount specified in the Limited Child Support Agreement must be either equal to or greater than the child support payment as assessed by the Child Support Agency. 

Please note that we cannot provide you advice regarding whether the Binding Child Support Agreement will impact your entitlement to other government benefits. You will need to seek further clarification from Services Australia on how the Binding Child Support Agreement can impact your entitlement to government payments.