The Guides to Social Policy Law is a collection of publications designed to assist decision makers administering social policy law. The information contained in this publication is intended only as a guide to relevant legislation/policy. The information is accurate as at the date listed at the bottom of the page, but may be subject to change. To discuss individual circumstances please contact Services Australia.

6.1.1 Basics of agreements

Context

A child support (1.1.C.60) agreement is a written agreement between parents (1.1.P.10) (and/or a non-parent carer) on the amount of child support to be paid, and how it will be paid.

A child support agreement has to meet the requirements of the legislation and has to include matters that can be dealt with in a child support agreement. There are 2 types of child support agreement, binding child support agreements (1.1.B.30) and limited child support agreements (1.1.L.40). Once parents have made a child support agreement, either parent can apply to the Registrar to have it accepted.

This page outlines the general requirements of child support agreements. See 6.1.2 for further information about binding agreements, 6.1.3 for limited agreements and 6.1.4 for information about agreements that are to cover periods both before and after 1 July 2018.

Act references

CSA Act section 5, section 12(4), Part 6, Part 7

Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (2008 Budget and Other Measures) Act 2008 Schedule 6 item 16

Family Assistance and Child Support Legislation Amendment (Protecting Children) Act 2018 Schedule 1 item 74 to 76

On this page

Children for whom child support agreements can be made

A child support agreement must be in relation to a child for whom an application for assessment can be (or has been) made. If a child support agreement deals with other children the Registrar will disregard those children for the purposes of the assessment (CSA Act section 82).

People who can be parties to a child support agreement

A child support agreement must be between:

  • 2 parents of a child who would be able to properly make an application for administrative assessment (1.1.A.30) of child support for the child in relation to whom the agreement is made (CSA Act section 83, section 25), or
  • one or both parents of a child, and a non-parent carer of the child, who would be able to properly make an application for administrative assessment of child support for the child in relation to whom the agreement is made (CSA Act section 83, section 25, section 25A). If both parents are assessed for child support, then they must both be parties to the agreement.

In determining whether an agreement complies with the legislation, the Registrar may act on the basis of the application for acceptance of the agreement, the documents accompanying the application and the agreement itself. The Registrar is not required to conduct any inquiries or investigations into the matter (CSA Act section 91).

What can be in a child support agreement?

A child support agreement under the CSA Act must contain at least one of the following provisions (CSA Act section 84(1)):

  • provisions under which a parent is to pay child support for a child to another person in the form of periodic amounts (1.1.P.80) paid to the other person (CSA Act section 84(1)(a)) (periodic amounts to be paid to the other person)
  • provisions varying the rate at which a parent is already liable to pay child support for a child to another person in the form of periodic amounts paid to the other person (CSA Act section 84(1)(b))
  • provisions agreeing on any other matter that may be included in an order made by a court under Division 4 of Part 7 (CSA Act section 84(1)(c))
  • provisions under which a parent is to provide child support for a child to another person otherwise than in the form of periodic amounts paid to the other person and those amounts are to reduce the annual rate (1.1.A.70) of child support payable by the parent under the child support assessment (CSA Act section 84(1)(d)) (non-periodic payment provisions (1.1.N.10))
  • provisions that a parent is to provide child support for a child to another person in the form of a lump sum payment (including by way of transfer or settlement of property) and that payment is to be credited against the parent's child support liability under the child support assessment (CSA Act section 84(1)(e)) (lump sum payment provisions (1.1.L.60))
  • provisions under which a parent is to provide child support for a child to another person otherwise than in the form of periodic payments that are not non-periodic or lump sum payment provisions (CSA Act section 84(1)(f)) (other payments and benefits)
  • provisions under which a parent's liability to pay or provide child support for a child to another person is to end from a specified day (CSA Act section 84(1)(g)) (a provision to end a child support liability).

If the agreement contains provisions of a type not set out above, the Registrar will disregard these provisions in making an assessment (CSA Act section 84(3)).

A single child support agreement can contain different provisions for different CSPs (1.1.C.150) or different parts of CSPs (CSA Act section 84(2)).

For agreements made from 1 July 2018, the agreement is not a child support agreement if it provides for a party to pay child support to another party who is not an eligible carer (1.1.E.10) of the child (CSA Act section 85(1)).

Periodic amounts to be paid to the other person

A child support agreement can provide for periodic amounts (regular amounts payable on a regular basis) to be paid to the other parent or non-parent carer.

These may be paid directly to the other parent or non-parent carer, to their bank account, or to a third party acting as the agent of the payee (1.1.P.30), such as a solicitor or trustee.

A periodic amount can be adjusted for the costs of living by either the child support inflation factor (1.1.C.130) or the CPI (2.3.2) or another adjustment factor identified by the child support agreement.

A provision that requires the payer (1.1.P.40) to make payments to a third party (such as a school) on behalf of the payee is not a provision for a periodic amount to be paid to the other person. A provision of this kind may be a non-periodic provision (see example below).

Non-periodic payment provisions

Where a child support agreement provides for child support to be paid otherwise than in the form of periodic amounts it may state that the annual rate of child support payable under the administrative assessment is to be reduced by a specified amount or percentage (up to 100%), which represents the annual value of the child support payable under the agreement (CSA Act section 84(1)(d) and section 84(6)).

Example: Robin agrees to pay school fees for Elise of $5,000 per year. The fees are payable to Sunny Coast College. Robin's annual rate of child support is to be reduced by $2,500.

If the child support agreement does not specify how the amounts will reduce the child support payable, then they are not amounts under the non-periodic payment provisions in the CSA Act and will not reduce the annual rate of child support payable under the administrative assessment (see 'Other payments and benefits' below).

Lump sum payment provisions

Where a child support agreement provides for child support to be paid in the form of a lump sum:

  • it must be a binding agreement (6.1.2)
  • it must state the lump sum payment is to be credited against the amount payable under the administrative assessment
  • there must be an administrative assessment in force prior to the application for acceptance being made
  • the amount of the lump sum must equal or exceed the current annual rate of the administrative assessment
  • the lump sum will be credited at the rate of 100% of the child support payable (unless the agreement specifies a lesser percentage).

Note: The lump sum payment is credited against the payer's liability under CSRC Act section 69A (rather than reducing the annual rate of child support payable under the administrative assessment). As at 1 July each year, the remaining lump sum credit is indexed in accordance with changes in the CPI (7.5.3).

Other payments & benefits

A child support agreement may include provision for child support to be provided otherwise than in the form of periodic amounts, but not specify how that payment is to reduce the child support payable (CSA Act sections 84(1)(d) and 84(6)) nor specify that it is a lump sum payment that is to be credited against the child support assessment liability (CSA Act section 84(1)(e)).

An agreement may also include a provision for child support other than in the form of monetary payment, for example, the provision of goods or services.

If a provision in an agreement does not meet the requirements of either a non-periodic payment provision or a lump sum payment provision it may be able to be included in the agreement under this heading (CSA Act 84(1)(f)).

If the agreement does specify the provision of goods, services, other payments or benefits then those arrangements will not have any effect on the child support assessment. The goods, services, payments or benefits conferred under the provision of the agreement will be in addition to any administrative assessment.

The additional goods, services, payments or benefits cannot be enforced or collected by the Registrar.

A provision to end a child support liability

A child support liability, whether started by child support agreement or formula assessment (1.1.F.20), can be ended by a child support agreement which provides for a liability to end from a specified day. The end date can be express or implied.

When the specified day arrives the Registrar will end the assessment from that day (a 'terminating event' under the CSA Act section 12(4)). A provision to end a child support liability does not prevent either parent from applying for an assessment in the future.

Other requirements of a child support agreement

The parties can sign the same child support agreement, or each sign separate copies of a child support agreement. Where the parties each sign separate copies, the terms of each copy must be identical.

If a child support agreement is made in the same document and deals with more than one child, the Registrar may treat it as if it contains separate agreements for each of the children (CSA Act section 87(1)).

If a child support agreement provides that child support is to be paid by or to both parents or 2 or more parties to an agreement, such as between parents and a non-parent carer/s, the Registrar has the discretion to treat it as if it contains separate agreements made in relation to the child or children by each of the parties, depending on the circumstances of the case (CSA Act section 87(2)). Whether a decision is made to treat the document as containing 2 separate agreements will depend on the facts of the case and the document being presented to the Registrar.

Agreements with conditions & pre-requisites

The commencement of a child support agreement may be contingent on finalisation of certain family law matters in the Federal Circuit and Family Court of Australia. Alternatively, the rate of child support payable under the agreement may be conditional upon those matters being finalised.

Example: A child support agreement contains one of the following provisions:

'Simultaneously with entering into this agreement, the parties intend to enter into a Binding Financial Agreement under the FL Act. In the event that the parties do not enter into the said Binding Financial Agreement then this child support agreement will be of no force and effect whatsoever.'

'Subject to an agreed property settlement in which Dejan is to receive $100,000 equity in the property, the annual rate of child support payable under an administrative assessment will be reduced to nil for the period 1 January 2022 to 31 December 2022.'

If an agreement contains conditions or pre-requisites, the parties will need to provide evidence to the Registrar to confirm that the condition or pre-requisite has been met. If evidence is not provided, the Registrar may determine that the agreement does not contain a relevant provision for the payment of child support (CSA Act section 84(1)), that the agreement is not 'properly made' and refuse to accept the agreement.

The Registrar may accept an agreement which states the rate of child support payable under the agreement will vary depending on whether a condition or pre-requisite has been met.

Example: A child support agreement contains the following provision:

'Subject to an agreed property settlement in which Melissa is to receive $100,000 equity in the property, the annual rate of child support payable under an administrative assessment will be reduced to nil for the period 1 January 2022 to 31 December 2022.

For the period from commencement of this agreement until the date of the final property orders, and/or if the final property orders do not provide Melissa with $100,000 equity in the property, the annual rate of child support payable under this agreement will be $25,000 per annum.'

Child support agreements & notations

An order for a change to the assessment made by consent made by a court can sometimes contain notations, notes or annotations to draw attention to actions the parties have taken or will take in the future. Notations are not orders and cannot be registered as court ordered variations to an assessment. However, they can form a child support agreement if:

  • they are signed by both parties (the usual provisions for limited and binding agreements apply), and
  • the wording of the notation expresses an agreement that child support of a kind listed in the CSA Act section 84 is payable to the other person.

A notation that says the parties intend to make a child support agreement is not a child support agreement.

Example: A notation that says 'the parties INTEND to enter into a child support agreement whereby Alen will meet all the costs of schooling for Jaci and Bettina and the annual rate of child support is to be reduced by 100%' is not a child support agreement, even if Alen and Liliana both sign it.

A notation that says 'the parties AGREE that Alen will meet all the costs of schooling for Jaci and Bettina and the annual rate of child support is to be reduced by 100%' can be a child support agreement if Alen and Liliana both sign it.

Recitals

A child support agreement may contain information in the form of 'recitals'. Recitals are usually statements setting out the facts and background to the making of the agreement and often include a statement indicating the intention of the parties. Recitals are often helpful when interpreting the agreement if there is any ambiguity in the clauses and words used in the operative clauses. While recitals do not form part of the operative clauses of an agreement, the agreement can state that they are to form part of the agreement.

Apportioning amounts payable under child support agreements

From 1 July 2018, where a child support agreement:

  • is made in the same document in relation to 2 or more children, and
  • does not explicitly provide the amount payable under the agreement in relation to each of the children and it is not possible to work out the amount payable

the agreement is taken to provide that the total amount payable under the agreement in relation to each child is worked out using the following formula (CSA Act section 86A).

  • Total amount payable under the agreement รท The number of children to whom the agreement relates

Apportioning under the CSA Act section 86A only applies in relation to any event that causes an agreement to cease to relate to a child, occurring on or after 1 July 2018. An agreement ceases to relate to a child where there is a suspension or termination of the agreement in relation to that child, or where the agreement ceases to be in force because of a terminating event (for example, the child turns 18).

If the agreement ceases to relate to a child, the amount worked out using the formula continues to apply in relation to each of the remaining children under the agreement (CSA Act section 86A(3)).

Example: A child support agreement sets the rate payable for 3 children Xanthia, Max and Damien. The total amount payable for the 3 children is $300 per month. The agreement ceases to relate to Max and $100 per month per child is still payable in relation to Xanthia and Damien. Therefore, the total amount payable for the remaining children is $200 per month.

For agreements made before 1 July 2018, the total amount payable under the agreement is the total amount payable immediately before 1 July 2018. The total number of children the agreement relates to is the number immediately before 1 July 2018. The apportioned amounts for agreements made before 1 July 2018 is preserved.

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