There are 3 ways in which parents can arrange their child support matters. They are:

1. via an administrative assessment;
2. via a child support agreement;
3. via informal agreement.

Administrative Assessment

The Child Support (Assessment) Act enables parents to apply to the Child Support Agency to have an administrative assessment between the payee (parent receiving the money) and the payer (parent paying the money).

When the application is made the Child Support Agency calculates the relevant amount of support that should be paid in accordance with a prescribed formula which takes into account the number of children, the amount of time they spend with each parent, both parents' income and a number of other factors.

Once the administrative assessment is issued, the amount payable under the administrative assessment is enforceable by the Child Support Agency against the payer.

Generally speaking, the amount payable under the assessment is reviewable at the end of each financial year when a person lodges their tax return. The assessment can also be reviewed should circumstances change, say if a parent's income increases or decreases significantly or if there is a change in parenting arrangements.

A child support agreement

The second way parents can arrange their child support affairs is by agreement. There are two types of agreements, namely:

1. a binding agreement; and
2. a limited agreement.

A binding child support agreement is an agreement that can provide for periodic payments, lump sum payments and payment of third party amounts such as school fees, health insurance and other children’s costs up until the children turn 18 or finish high school.

A binding agreement can be difficult and expensive to set aside so it is the most secure way of permanently "lock" child support arrangements in place.

A limited agreement can deal with the same matters as a binding child support agreement however it only remains in place for 3 years and then the parties can renegotiate the terms.

Informal agreement

If parties are largely agreeable and no child support assessment has issued, they can simply enter into an informal arrangement based on mutual trust. Such informal agreements are not enforceable.

Before you enter into an informal arrangement, we suggest you use the online child support calculator to assist you determine what you would ordinarily be assessed to pay/receive under a child support assessment.

You can access the calculator and further information regarding child support by clicking on the following links:

• Separated parents
• Child support guide
• Child support forms

Tamie Moore
Law Graduate