What are the different types of child support arrangements?

When parents separate, child support can be arranged in more than one way. The right choice depends on how well the parents can agree, how settled their incomes are, and whether they want something different from what the formula produces. This article explains the options.

Child support is administered by Services Australia, under the Child Support (Assessment) Act 1989 (Cth), for parents in Western Australia as elsewhere. The Child Support Agency, often mentioned in older articles, no longer exists under that name.

A child support assessment

The standard arrangement is an administrative assessment. A parent or carer applies to Services Australia, which works out the amount using the child support formula. The formula takes into account:

(a) each parent's taxable income, less a self-support amount;

(b) the parents' combined income;

(c) the share of care each parent provides, counted in nights a year;

(d) the number of children and their ages, with different rates for children aged 12 and under and those aged 13 and over.

An assessment is updated when incomes or care change. A parent who believes the formula gives an unfair result in special circumstances, such as a child's special needs or high costs of travelling to see a child, can ask Services Australia to change the assessment.

Once there is an assessment, it is paid either through Services Australia, by Child Support Collect, or directly between the parents, by Private Collect. The receiving parent's choice largely decides which.

Child support agreements

Parents can instead agree on child support in writing. An agreement can deal with things the formula does not directly cover, such as paying school fees or private health insurance. It has no effect until Services Australia, through the Child Support Registrar, accepts it. There are two kinds, and they work quite differently.

Limited child support agreement

A limited agreement:

(a) does not require legal advice;

(b) can only be made when an assessment is already in place;

(c) must be for at least the amount of the assessment, so it cannot reduce child support below the formula;

(d) can be ended by either parent by written notice once it has been in place for three years, or earlier if the assessment would change by more than 15 per cent in circumstances the agreement did not contemplate.

It does not end automatically at three years. It continues until one parent gives notice or another ending event occurs.

Binding child support agreement

A binding agreement:

(a) requires each parent to receive independent legal advice before signing, with a certificate from each lawyer attached;

(b) can be for any amount, including less than the assessment;

(c) can include a lump sum, or a transfer of property, credited against child support;

(d) can only be ended by a new binding agreement, a written termination agreement made with the same legal advice, or a court order setting it aside. It also ends if the parent receiving payment stops being an eligible carer.

A court will set aside a binding agreement only on limited grounds, such as fraud or non-disclosure, duress or unconscionable conduct, or exceptional circumstances that have arisen since it was made and would cause hardship.

Neither kind of agreement can be varied. To change one, the parents end it and make a new one.

When child support ends

Child support generally ends when the child turns 18. If the child is still in full-time secondary school, the assessment or agreement can be extended to the end of that school year, but the application must be made while the child is 17.

Responsibilities on both sides

Whatever arrangement is used, both parents should:

(a) lodge tax returns on time, because the assessment depends on income;

(b) tell Services Australia promptly about changes in care or circumstances;

(c) keep a record of payments made and received.

Child support alongside a property settlement

A binding child support agreement is often made at the same time as a binding financial agreement or consent orders about property, particularly where a lump sum or the home is part of the arrangement. The documents need to work together, and both a binding child support agreement and a binding financial agreement require independent legal advice.

This article is general information, not legal advice.