Changes to the Child Support Legislation in 2008 have seen two options come into play for documenting a Child Support Agreement – either a Limited Agreement or a Binding Agreement.

So, what’s the difference between the two?

Both Limited and Binding Child Support Agreements allow parents of a child to agree to their Child Support arrangements in writing, and lodge those agreements with the Child Support Agency.

Limited Child Support Agreements are required to be:

• in writing;
• Signed by both parties;
• The amount payable under the Agreement must be equal to or greater than the amount assessed in the current Child Support assessment; and
• Lodged with the Child Support Agency.

You are not required to seek legal advice prior to entering into a Limited Child Support Agreement.

Binding Child Support Agreements are required to be:

• In writing; and
• Lodged with the Child Support Agency.

Differing from Limited Agreements, in Binding Agreements both parties are required to obtain independent legal advice, attach a certificate signed by a lawyer and the Agreement can be for any amount (including less than the amount assessed in the current Child Support assessment).

Other differences between Limited and Binding Child Support Agreements arise when one or both parties want to change the agreement.

How do you change a Limited Child Support Agreement?

1. The parents agree to end the agreement, either in writing or entering into a new Limited (or Binding) Child Support Agreement;

2. If both parties do not agree to terminate the Agreement, either party can apply to the Court for an Order to terminate the Agreement. However, you should seek legal advice prior to commencing proceedings and in particular, be aware there are only very limited circumstances in which such an Order will be made;

3. If at any time the amount payable under the normal Child Support formula assessment changes by 15% from the previous assessment, in circumstances which were not foreseen by the agreement, either party can ask the Child Support Agency to end the agreement (however, be aware that time limits apply); or

4. If the Agreement is over 3 years old, either party can give written notice to the Child Support Agency to end the Agreement.

How do you change a Binding Child Support Agreement?

1. The parents agree to end the Agreement by entering into a Termination Agreement or a new Child Support Agreement. To do so, both parties will need to obtain independent legal advice; or

2. If both parties do not agree to terminate the Agreement, either party can apply to the Court for an Order to terminate the Agreement. However, you should seek legal advice prior to commencing proceedings in particular, be aware there are only very limited circumstances in which such an Order will be made.

We highly suggest that whether you are entering into a Limited or a Binding Child Support Agreement, it is essential that you obtain independent legal advice from a Specialist Family Law prior to signing the Agreement.

Keywords: Child Support, Child Support Agreement, Binding Child Support Agreement, Limited Child Support Agreement