What Major Changes to the Child Support Scheme Mean

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Child support is a complex matter often causing anxiety and upset for those involved. Last year’s major changes to the Child Support Scheme affect everyone paying or receiving child support.

How are child support arrangements administered?

Separated and/or divorced parents in agreement can make their own arrangements about child support. Otherwise, the Child Support Agency will administer the matter to ensure that parties are meeting their legal obligations to support their children financially.

It is determined by using the ‘child support formula’, which takes into account such things as established costs of raising children, parents’ incomes and the proportion of care provided by each parent. After applying the formula, the Agency sends an ‘assessment’ to parents confirming the amount of support to be paid. Parents can see how this formula works by accessing the Child Support Agency website.

What else should I know?

Parents can agree to enter into a Child Support Agreement. Two types of Agreements exist—‘Limited’ and ‘Binding’. A Limited Agreement deals with periodic payments which are equal to, or greater than, the amount calculated using the child support formula. These agreements have a finite life span.

A Binding Agreement can deal with other arrangements, including periodic payments of a lesser value than as assessed and lump sum payments which may suit parties who wish to offset ongoing support against the transfer of assets (e.g. the family home) pursuant to a property settlement. A Binding Agreement can only be entered into after each party’s lawyer has certified that their client has received independent legal advice about the agreement.

In all circumstances we recommend you seek legal advice on how the child support legislation affects you.