It is not necessary to have an administrative assessment in force prior to entering into a Binding Child Support Agreement. However, if a binding agreement is registered with Services Australia-Child Support, a notional formula assessment will be created. A notional assessment is the formula based assessment that would apply if the agreement was not in place.

Some fundamental characteristics of Binding Child Support Agreements are listed below:

It is mandatory for each party to receive independent legal advice before entering a Binding Child Support Agreement. Section 80C of the Child Support (Assessment) Act (1989) requires legal practitioners to advise parties as to:

(i) the effect of the agreement on the rights of that party;

(ii) the advantages and disadvantages, at the time that the advice was provided, to the party of making the agreement

To provide this advice, a legal practitioner would need an understanding of the Child Support scheme, and knowledge of the financial situation of each party. This involves the exchange of financial information. Even if a party indicates that s/he is perfectly satisfied with the terms of the agreement, the law requires that the advice be given by the legal practitioner.