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Pitfalls in Binding Child Support Agreements

Pitfalls in Binding Child Support Agreements

In our earlier article we spoke of Binding Child Support Agreements and how they can override or substitute an assessment from the Child Support Agency.  However, these agreements are not as ironclad as they appear and you should be aware of the possible pitfalls often associated with these agreements.

Firstly, Family Tax Benefits are a separate issue according to the Child Support Agency.  This means that even if you have an agreement, if your income changes, Centrelink will still make a “notional” assessment based on your taxable income.

Another common issue is that Child Support does not separate an agreed dollar amount for multiple children.  So, if for example you agree to pay $300.00 per week for the three children, this amount will not change until every child has turned 18.  Therefore, if there are multiple children you should list separate dollar amounts for each child so that each payment stops when the child turns 18.

By far the biggest flaw with these agreements, if you have the primary care of the children, is that the agreement will not take into account any changes to the care of the children or other changes in circumstances.  If the other parent starts to earn more they will still only be required to pay the amount agreed upon in the agreement.

The same is true if the children start living or spending more time with the other parent.  Such issues need to be taken into account when an agreement is being drafted and is why it is important to seek legal advice from an experienced Family Lawyer so as to ensure you are protected.

There are ways to set aside an agreement.  You would need to sign a new Binding Child Support Agreement that meets the usual requirements (see our previous article) saying that you want to change the amount.

The only other way to set aside an agreement is in Court where it must be shown that –

  • There was a fraud or failure to disclose all assets and liabilities; or
  • There was undue influence, duress or unconscionable conduct; or
  • There are exceptional circumstances that have arisen that will cause hardship to either the parents or children if the agreement is not set aside.

Binding Child Support Agreements require legal advice.  Call Amelia Cox, Accredited Specialist Family Lawyer on (02) 4324 7699 for a free confidential chat on the phone to find out where you stand.