The Department of Human Services can use an agreement that has been reached by the parties as the basis for the child support assessment, instead of using the formula calculation. In many cases, parents can make their own arrangements about the amount of financial support they provide for their children, if they can reach agreement. Child Support Agreements can include periodic payments, in-kind payments or lump sum payments.
Agreements can allow parents the freedom to make arrangements to suit their individual needs. However, the object should always be that the children receive a proper level of financial support from their parents, and agreements should not be used to unfairly take advantage of either party.
Parties should be cautious about the duration of an agreement. The longer the agreement, the less likely it is to be able to anticipate changes in the circumstances of either parent or the child(ren) that may occur in the future. Agreements are often inflexible documents that cannot respond to changes in circumstances in the same way that a formula based assessment can.
On 1 July 2008, the law was changed to allow for two kinds of formal child support agreements.
- Limited Child Support Agreements
- Binding Child Support Agreements (including Lump Sum Child Support Agreements)
Agreements that were registered with the Child Support Agency prior to the change in the law on 1 July 2008, were reviewed by the Child Support Agency to determine if the agreement would be able to continue to operate under the new law. The majority of these agreements were considered to be able to survive or ‘transition’ into the new era. They were deemed to fall into the category of Binding Child Support Agreements, even though the strict criteria governing new binding agreements were not satisfied.
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