Parents/carers are able to make a Binding Child Support Agreement which provides for less than the assessed rate of child support. However, the entitlement to Family Tax Benefit (A) will not be calculated on the amount of child support payable under the agreement. FTB (A) will be calculated by reference to the notional assessment of child support, which will reflect the amount of child support that would have been payable, if the agreement had not been made.
For clients with Limited Child Support Agreements, Family Tax Benefit (A) will also be calculated by reference to the notional assessment, and not by the agreement.
Lump Sum Binding Child Support Agreements will not require the creation of a notional assessment, unless the agreement also changes the rate of child support payable. Although Transitioned Agreements (those executed and registered prior to 1 July 2008) are deemed to be Binding Child Support Agreements, in these cases Family Tax Benefit (A) entitlement is based on the amount of child support set out in the agreement.
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