What types of child support are available?

What types of child support are available?
We often encounter clients who wish to know whether seeking child support payments also means that the children’s health insurance, or school fees paid by the other parent will now stop being covered.  There seems to be a common misunderstanding that child support must be paid in cash. Child support can be provided in cash and non-cash benefits.
Broadly, there are three types of child support arrangements commonly used by parents:
  1. Informal agreement between the parents – this is not enforceable, however provides the greatest amount of flexibility;
  2. Child Support Assessment by the Child Support Agency – this is calculated by the Child Support Agency ; using the parent’s income and time spent with the child among other factors;
  3. Private Child Support Agreement – this is the perfect midpoint between an informal arrangement and a child support assessment, and allows for both flexibility in method of support and registration with the child support agency.
With respect to private child support agreements, payments can be periodic or non-periodic items, such as school fees or health insurance. If you have chosen to register your private agreement with the child support agency, you will be able to claim a portion of the value of the non-cash benefit towards the minimum amount of child support that the agreement must provide for.
Private Child Support Agreements can be made in two different way:
  1. Binding Child Support Agreement; and
  2. Limited Child Support Agreement.
A Binding Child Support Agreement does not require a child support assessment by the agency, and will not terminate until a terminating event occurs (such as a child turning 18 years of age). Both parties must have independent legal advice when entering a binding child support agreement. The amount payable can be any, whether under or over what would have been assessed by the agency.
A Limited Child Support Agreement only last three years. A child support assessment needs to be undertaken by the Child Support Agency and the amount agreed to be paid must not be less than the assessed amount. Further the parents do not need to obtain independent legal advice prior to signing the agreement.
There are also different rules when looking at whether the different types of agreements can be changed or terminated.
If you are the parent that is paying child support, it is important that you inform the child support agency about changes to your circumstances,  pay all child support amounts on time, lodge your tax returns on time and provide the Child Support Agency with an accurate record of your income.

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