Family Law: Child Support comes in many different forms

There are a range of flexible options for the payment of child support which allow parents to choose a format which best suits their particular circumstances. When determining the best configuration of child support for you, consider the following three questions:

 How will my child support obligation be determined?

There are four main ways child support can be administered:

1. Child Support Assessment: This is the most common way parents determine child support. The Child Support Agency uses a specific formula to assess a number of factors including income, the age of the children, the percentage of care provided by each party etc. Parties can apply to the Child Support Agency for assessment and will be provided with a determined amount. Payment of this amount can then be done privately or administered through the Agency itself. This option provides long-term responsiveness to changes of circumstances in the parties’ lives since their obligations are reassessed annually.
2. Binding Child Support Agreement: The most common type of child support agreement formed between parents outside of the Child Support Agency is a Binding Child Support Agreement. Under an agreement, parents have increased flexibility as to when and how payments may be made. For example, instead of providing a lump sum on a monthly basis, parents may divide up the cost of caring for the children in the form of non-cash items such as health insurance, education fees and medical bills. These agreements can be made even when a child support assessment has not been requested. Both parties must obtain independent legal advice before entering into a BCSA because it is (as the name suggests!) legally binding – once parents have agreed, a Court may stamp the agreement when it is submitted alongside Consent Orders rendering both parties bound until a new agreement is made and stamped or a Court ends the previous agreement. Parents may also enter a Limited Child Support Agreement. Unlike a BCSA, a limited agreement will not be accepted by the Child Support Agency if it is less than the assessed amount provided in a Child Support Assessment. However, you do not require legal advice for this kind of agreement.
3. Court Ordered Child Support: Sometimes, the Court will make an order in unusual circumstances where the other means for determining child support are insufficient. For example, the Court may make an order for child maintenance (child support for children over the age of 18) in circumstances where the child in question is legally an adult but has a mental or physical disability which means the carer parent still requires support. Alternatively, the court may decide to order higher child support if a parent’s apparent taxable income reflects only a small portion of their yearly earnings as a result of creative financial planning.
4. Self-Managed Child Support: This means child support is determined and administered outside the government child support services. Parents decide how much child support will be paid, when it will be paid and to whom without needing to register their agreement. However, this is a non-binding arrangement which gives you few options for recourse should there be a disagreement between parents down the track.

 How will payments be made and received?

The way in which payments will be made and received will largely depend on which of above arrangements you and your ex-partner have in place.

 For self-managed child support, parents may agree between themselves where and when payments are to be made. Similarly, child support agreements are made between parents and therefore can be determined to suit their needs.

 Child support payments as determined through the Child Support Agency can be paid through Private Collect which allows parents to determine where and when payments are made through private bank accounts. However, child support may also be paid through Child Support Collect, a system whereby the Child Support Agency receives payments from the paying party and transfers payments to the receiving party.

 Which option you choose will depend on your particular circumstances. For example, you may choose Private Collect if you want increased flexibility. Alternatively, you may find Child Support Collect better suits your needs if you and your ex-partner struggle with communication.

 How will change of circumstances impact my child support obligations?

 Change of circumstances can include a change in your income, a new job, your child reaching the age of 18, a new care arrangement, a new child for whom you have to care etc. Since these factors determine your child support obligations in a Child Support Assessment, they can drastically impact the extent of your obligations. As such, it is vital that you inform the Child Support Agency of such changes. Alternatively, changes may require your Binding Child Support Agreement to be reassessed.

 These three questions are important to ask when considering how you will pay child support. If you have a family law matter, concerns about child support or questions about family law and separation in NSW and want to find out more, please do not hesitate to contact us on 9688 6023 or email us at info@franklegal.com.au.

This article is provided to the reader for general information. It is not legal advice. It was written by Andrea Spencer & Emily Graham and edited by James Frank.

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Family law, Separation, Financial considerations, financial impact, child support, children