Parents going through a separation may be required to pay child support. This may involve a payment being made by one or both parents to the other to help with the cost of looking after the children.
The child support assessment process is administered by the Australian Government, Department of Human Services (“DHS”). A parent may make an application to DHS for a child support assessment. DHS would take into account a number of factors including the income of each parent and the percentage care of the child or children. A change to the circumstances of each parent or of the child can change the calculation of child support. This can be a significant source of conflict.
In order to provide certainty and stability, parents may agree to make a legally enforceable agreement about the amount or frequency of child support that is to be paid, as well as how these payments are calculated. Parents may also reach an agreement relating to additional expenses for a child including school fees, clothing or payments for extra-curricular activities. A Binding Child Support Agreement is a written agreement signed by both parents that allows parents to agree on these issues. This may be for an amount that is less than or more than the Child Support assessment that would otherwise apply.
In order to make a Binding Child Support Agreement, both parents need to obtain independent legal advice on the advantages and disadvantages of entering into the Agreement. Child support lawyers are able to provide this advice, and also provide advice about enforcing these agreements.
It is important to obtain advice from a child support lawyer if you are thinking about entering into a Child Support Agreement. In the recent case of Telama & Telama (No. 2)  FamCAFC 194, the Full Court of the Family Court of Australia considered an appeal by a payee mother who had entered into a Binding Child Support Agreement with the payer father. In this case, the mother appealed against a decision by the Trial Judge to set aside a Binding Child Support Agreement. The father in this case argued that the Agreement should be set aside because his income had decreased. The Trial Judge was satisfied that:
- At the time that the Binding Child Support Agreement had been entered into in 2013, the payer father was earning $710,000 per annum;
- He now earned $220,000 per annum; and
- He had no other financial resources from which to pay child support.
The husband was successful at first instance and obtained an order for the Binding Child Support Agreement to be set aside. The Trial Judge found that the change to the father’s financial circumstances involved “exceptional circumstances” and amounted to hardship within the meaning of s.136(2)(d) of the Child Support Assessment Act. This provision allows a Binding Child Support Agreement to be set aside when exceptional circumstances have arisen since the Agreement was made, that would cause the child or applicant to suffer a hardship if the Agreement is not set aside.
The focus of the wife’s appeal was whether the Trial Judge could find that exceptional circumstances existed where the father failed to give full and frank disclosure of his financial circumstances. The Full Court found that it was not open to the Trial Judge to find that exceptional circumstances existed. It was found that the Trial Judge did not explain how and why the evidence provided by the father was sufficient to meet the deficiencies in relation to his disclosure and found that there was sufficient doubt to warrant this decision be reconsidered by the Full Court.
This decision highlights the importance of obtaining legal advice from a child support lawyer if you are considering entering into a Binding Child Support Agreement. It also underlines the importance of making full and frank disclosure in all family law matters. It is also important to consider changes to each parent’s circumstances when preparing a Binding Child Support Agreement.
If you would like to obtain advice about how a Binding Child Support Agreement may apply to your own circumstances, contact one of our Child Support Lawyers today.