Binding Child Support Agreements vs Limited Child Support Agreements

There are a number of ways that Child Support can be managed between separated parents.  One option is to enter into a private child support agreement.  Any private child support agreement needs to be in writing and signed by both parties.

A private child support agreement can include cash payments as well as non-cash payments, such as:-

• Private school fees;
• Uniforms, books, extra curriculars; and
• Private health insurance.

There are two types of private agreements:-

• Binding Child Support Agreement; and
• Limited Child Support Agreement.

Binding Child Support Agreement  (”BCSA”)

Before entering into a BCSA both parents must receive independent legal advice.  Each party’s solicitor must sign a certificate that is annexed to the Agreement stating that they provided their client with independent legal advice as to the effect of the Agreement and the advantages and disadvantages of entering into the Agreement.

A BSCA can only be terminated with the consent of both parties after receiving legal advice or by way of a “terminating event” as defined in the Agreement, such as when the child turns 18.

The amount of Child Support payable pursuant to a BCSA can be any amount agreed between the parties, including an amount that is less than what the Child Support Agency (“CSA”) would assess.  No child support administrative assessment needs to be in place prior to entering into a BCSA.

A BSCA comes into effect the day the Agreement is finalised.

Limited Child Support Agreement (“LSCA”)

A LCSA operates for a maximum of three (3) years, after this time, the Agreement can be unilaterally terminated by either party.

A Child Support Administrative Assessment must be in place prior to entering into a LCSA.  The amount payable pursuant to the LCSA must not be any less than the Administrative Assessment.

While we recommend that you obtain legal advice before entering into any private child support agreement, there is no obligation to obtain independent legal advice before entering into a LCSA.

A LCSA must be accepted by the CSA before coming into effect.

Which agreement is right for you will depend on your particular circumstances.  If you’re considering entering into a private child support agreement, contact one of our family lawyers for advice today.