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6.1.3 Limited child support agreements

Context

Limited child support agreements (1.1.L.40) are a type of agreement that allow parents (1.1.P.10) some flexibility to determine their own child support (1.1.C.60) arrangements. Limited child support agreements do not require the parties to have received legal advice before entering into the agreement.

Act references

CSA Act Part 6

On this page

Limited child support agreements

For a limited child support agreement to be accepted by the Registrar there must be a child support administrative assessment (1.1.A.30) in place at the time an application for acceptance of the limited agreement is received by the Registrar. Also, for the agreement to be accepted, the agreement must be for at least the annual rate (1.1.A.70) of child support that would otherwise be payable under the administrative assessment, payable by the same parent as under the assessment.

Example: Under an administrative assessment, Andre is required to pay Marcelline $10,000 a year in child support. Andre and Marcelline enter into a limited child support agreement whereby Andre will pay Marcelline $7,500 a year. The agreement cannot be accepted as the amount payable by Andre under the agreement is not at least the amount that is otherwise payable by Andre under the administrative assessment.

Where an agreement includes the provision of an 'in kind' benefit, the Registrar may need to assign a value to that benefit in order to determine whether the amount in the agreement is at least the annual rate of child support that would otherwise be payable under the administrative assessment.

A limited child support agreement must:

  • be in writing, and signed by both parents or the parent/s and eligible non-parent carer
  • have an administrative assessment in place at the time an application for acceptance of the limited child support agreement is received by the Registrar
  • meet the conditions set out below:
    • if the child support agreement commences on the day on which the application for acceptance of the agreement is made to the Registrar, the annual rate of child support payable by the parent under the agreement on the day of the application must be at least the annual rate that would have been otherwise payable by that parent under the administrative assessment on that day (CSA Act section 80E(2))
    • if the child support agreement commences on a day after the application for acceptance of the agreement is made to the Registrar, the annual rate of child support payable by the parent under the agreement on the day the agreement commences must be at least the annual rate that would have been otherwise payable by that parent under the administrative assessment on that day (CSA Act section 80E(3)). If the agreement commences on a day in the future for which the annual rate is not yet known, the agreement cannot be accepted until the annual rate on that day is known
    • if child support is payable under the agreement for a period of time before the day on which the application for acceptance of the agreement is made to the Registrar, the amount payable under the agreement for the whole period must be at least the amount of child support that would be otherwise payable by that parent under the administrative assessment for that whole period (CSA Act section 80E(4)).

If, when considering the annual rate or amount of child support that would otherwise be payable by the parent under the administrative assessment, there is a decision pending (for example, a change in care or income) that would affect the rate of child support otherwise payable on the day the application is made for acceptance of the agreement, the applicable rate or amount that applies under the CSA Act sections 80E(2), 80E(3) or 80E(4) will be the rate or amount under the amended assessment. The Registrar will therefore finalise the relevant decision before applying the applicable test above (CSA Act sections 80E(2), 80E(3) or 80E(4)).

Example: Babette and Runa have shared care (1.1.C.10) of Silvius and Felix. Runa is assessed to pay Babette $4,000 in child support.

On 20 June 2023, Babette advises the Registrar that as of 31 May 2023 both Silvius and Felix are in their full-time care.

On 30 June 2023, Babette applies for acceptance of a limited agreement in respect of Silvius and Felix, with an annual rate of $5,000 total. The agreement is to take effect from 30 June 2023. The Registrar will finalise the care percentage decision before making a decision on the application for acceptance of the limited agreement, because the care decision will affect the rate of child support payable on the day the application was made for acceptance of the agreement.

A new care determination is made on 5 July 2023 with effect for both parents from 31 May 2023 (as the notification made on 20 June 2023 was within 28 days of the care change). Under the amended assessment, Runa is assessed to pay $9,000 to Babette.

The agreement does not meet the requirement of CSA Act section 80E(2) as the annual rate of child support payable under the agreement ($5,000) is not at least the annual rate of child support payable under the formula assessment (1.1.F.20) that applies on 30 June 2023 ($9,000), the day the application was made for acceptance of the agreement.

Limited agreements cannot usually reverse the paying and receiving roles of the parents, as the annual rate payable by the paying parent under the agreement must be at least the rate payable by that parent under the administrative assessment.

Example: Roxanna and Hartwin have a child support assessment (1.1.C.70) for their children Dotty and Suresh, who live with each parent 50% of the time. Roxanna is assessed to pay Hartwin $2,000 in child support each year, $1,000 for Dotty and $1,000 for Suresh. Roxanna and Hartwin cannot make a limited agreement for Hartwin to pay Roxanna $3,000 per year, as Roxanna would not pay at least the assessed annual rate under the agreement. They can make a binding agreement instead.

However, if each parent has the paying role in relation to one of their children, because of different care arrangements for the children, an agreement made in relation to one of the children may cause the overall roles to reverse after the higher agreement amount is offset against the assessment amount for the other child under the CSA Act section 67A.

Example: Linda and Kiran have a child support assessment for their children Talon and Harper. Talon lives with Linda and Harper lives with Kiran. Linda is assessed to pay Kiran $2,000 per year for Harper and Kiran is assessed to pay Linda $1,000 per year for Talon; the amounts are offset so that Linda pays Kiran $1,000. Talon needs orthodontic work, and Linda and Kiran agree that Kiran will pay $5,000 for one year for Talon. This can be accepted as a limited agreement because it relates only to Talon and Kiran will pay more than the assessed rate for Talon. After offsetting, Kiran now pays Linda $3,000 for the year.

A limited child support agreement cannot be varied (CSA Act section 80F). To change a limited child support agreement, the agreement must be terminated and replaced with a new limited child support agreement. For further information on how a limited child support agreement can be terminated, see 6.4.2. For further information on how a limited child support agreement can be suspended, see 6.4.3.

A document that forms a property division order, parenting plan, maintenance agreement or financial agreement under the FL Act, can also be a limited child support agreement for child support purposes if it complies with the necessary requirements in the CSA Act (CSA Act section 84(5)).

Alterations to a limited child support agreement

Parties must sign identical documents to make a valid child support agreement. Any alterations must be initialled by both parties to show that they were made before the agreement was signed.

If an alteration is not initialled, or is only initialled by one party, and the parties confirm the alteration was made before the agreement was signed, then the parties have signed identical documents and the altered agreement is valid. If an alteration was made after one, or both parties signed the agreement and they want the altered agreement to have effect, any alterations must be initialled by the parties and the agreement signed again for the altered agreement to be valid.

If an alteration is not initialled, or is only initialled by one party and there is a dispute between the parties as to whether the alteration was made before or after an agreement was signed, the Registrar must decide whether they signed an identical document. If both parties signed an identical document before an alteration was made, the Registrar can accept the original agreement without taking account of the alteration. If the alteration was made after the agreement was signed by one party but before it was signed by the other, the parties did not sign the same document and there is no agreement between them.

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