CHILD SUPPORT

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Child Support Agreements

Are you a separated party who is either looking at paying or receiving child support? Are you confused about what your obligations are and what you may be entitled to receive or required to pay? You may have only just begun dealing with the effects of separation and now you are forced to consider the financial implications of raising children within two separate homes! But there is not need to worry. A qualified legal advocate is waiting for your call.

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    How Do I Get Assessed For Child Support?

    There are two different types of child support agreements or child maintenance agreements as you may also have heard it be referred to; 

    1. A full assessment completed and monitored by the Child Support Agency; and 
    2. A private binding child support agreement that is agreed between the parties without the involvement of the Child Support Agency. 

    Option number one involves a third party in that the child support assessment is completed by the child support agency. The child support agency is a division of the Department of Human Services. They will consider the parties’ financial situation and their weekly incomes to assess the rate at which child support will be paid. This payment will then be deducted from the paying parties’ pay before they receive it each week, fortnight, or month depending on how they are paid. The rate of payment will fluctuate up or down depending on the paying parties’ financial situation and is largely based on their taxable income each year and the current care arrangements for the children. The payment will also be affected if either party ceases working. It is important to note that if you are the paying party, you cannot be asked to pay more than you can afford and your limited capacity if it is in fact limited, will be factored into the process. 

    The payment of child support is a source of contention between many parents and taking the situation from the hands of the parties and placing it in the hands of the child support agency instead is a way of taking the emotion out of the situation, though it is rarely considered this way. Neither party can have much influence over the process if the agency is the one overseeing the payment structure. This way there will be periodic payments made for the maintenance of the children and everybody wins. 

    If you do choose to go with option number 2, it is preferable that the agreement is written by a lawyer and that both parties sign their agreement to it. There is an old saying that works in this instance whereby “an agreement is only as good as the paper it is written on” and in essence this could not be more true. Even though you may have unwavering trust in the other party (which significant legal training suggests is more often than not untrue), there is no telling what pain, grief, anger, or resentment may do to a person, and therefore it is always better to protect yourself and have the agreement formalised. 

    A private child support agreement will allow both parties to consider and agree on an appropriate rate. This decision will take into account income, financial capacity and usually has a lot to do with the relationship between the parties. If the separation has been on good terms then more often than not the agreement will reflect this. The agreement may even include other aspects of financial compensation such as the division of medical and education-related expenses, especially if education is taking place through a private school. The freedom a private child support agreement gives is that the parties can make their own arrangements based on their own personal circumstances and what they seem to be best for their children. 

    Whether you choose to enter into a private agreement or have the child support agency take that decision off your hands, the primary focus is on providing for your children. It is important to note that child support in any form will never cover all the costs associated with having and raising children and the primary parent will almost always end up forking out more costs than the other. This is merely a reality we are stuck with. It will equally be important to allow provisions in your agreement for the amount to be reassessed in the event the paying party increases their time with the children (i.e. the care arrangements are altered). If the agreement in terms of care arrangements is settled, then this may not be necessary.

    Do I need To Seek Legal Advice?

    If you are being assessed by the child support agency for the rate you are to pay child support then usually, it will not be helpful to include a lawyer in this process. The agency will have a formula that they put all the information into to determine a payment figure. These formulas and figures are usually available on their website and you will be able to calculate yourself how much you will be required to pay based on your income. This is usually a simple process. 

    If however, you are considering a private agreement then you should engage a lawyer to help you both draft the agreement and understand your rights and obligations. Depending on which side of the situation you fall on, private agreements can have one substantial advantage or drawback.  Often, the agreed rate will be “locked-in” and that means that until the child/ren turn 18 years old, the rate will not fluctuate based on income (with the exception of if the (paying party cannot feasibly meet the payment requirements). On one hand, this is good because if the payer’s income goes up they are not required to adjust the rate accordingly but it could be considered bad from the receiver’s perspective for the same reason.

    That is not to say that a clause cannot be added to the agreement to allow for a fluctuation based on income but again, this relies on the provision of honesty and requires full disclosure each year of financial capacity and income earned. 

    If you are seriously considering having child support payments made through a private agreement then you need to have considered all your options.

    What Area of Law Does Child Support Fall Under?

    Child support is an aspect of Australian Family Law and therefore falls within that jurisdiction. In Australia, family law is dealt with in both the Family Court and the Federal Circuit Court. Child support arrangements are not usually dealt with by the court but in certain circumstances, they will. The usual occurrence would be if a party is not complying with a private child support agreement and the court decides that the agreement is best served by way of a court order or by consent orders which are stamped with the court’s approval. If the amount of child support is also in dispute, then the court can deal with this issue at the same time.

    There is some provision for child support in the Family Law Act but it is not strictly a family law matter because it crosses over with the department of human services and their child support scheme and Child Support (Assessment) Act. It is best to consult a lawyer before delving into any legislative interpretation of what you may or may not be entitled or obligated to do.

    Obtaining independent legal advice should be your first point of call when the term legislation or court is uttered. The processes are complicated and the risk of error too great without professional assistance. You would seek assistance from a law firm such as Jameson Law which specialises in family law and be provided with a child support lawyer.

    Can Child Support Be Paid As A Lump Sum?

    Child support can absolutely be paid as a lump sum but there are concerns with this method of payment to be considered. Firstly, there can be tax implications with paying a lump sum because the sum would ordinarily be quite large. The onus falls to the receiver to then make sure the money is used for the maintenance of the children and not for other means.  The lump-sum would also not take into account fluctuation in earning capacity. The financial support may also not consider school fees, medical expenses, or future needs of the children that can be accounted for throughout with a periodic payment system. 

    Above all else though, if this is the agreement you and your ex-partner consider is best for your children, the agreement MUST be formalised by way of a binding financial agreement to avoid difficulty down the track.

    Is Child Support Part Of The Property Settlement Process?

    The property settlement process is different from that of the child support process and the two are not necessarily linked. The party who has primary care of the children does normally receive an adjustment in the property settlement for those care responsibilities however, this is with or without the inclusion of child support. The main theory behind this is that child support rarely ever covers the amount that will be spent on the maintenance of a child and therefore an adjustment of the property settlement is warranted. 

    If there is an ongoing dispute over who is to have primary care of the children and parenting orders have yet to be determined yet, then the property settlement is usually divided based on the parties’ circumstances at the time. The amount of time that you spend with your children is always open to fluctuation and unfortunately, your property settlement cannot always account for this.

    Disclaimer

    The above is general legal information and should not be considered legal advice. You should speak with one of our family lawyers for legal advice tailored to your specific legal matter. The courts deal with matters on a case by case basis. It should also be noted that there may be court delays due to COVID-19.

    Frequently Asked Questions.

    It is a criminal offence to be in contempt of a court. In such circumstances the court may force child support payments from a parent who is not paying. This is normally done via a garnishing of wages and tax refunds. There may also be penalties imposed.

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