On 1 July 2018, amendments to the Child Support (Assessment) Act 1989 came into effect which may have a significant impact on current and future Binding Child Support Agreements.
Why do the changes matter?
On 9 May 2018, the Family Assistance and Child Support Legislation Amendment (Protecting Children) Bill 2018 was passed into law and amendments were made to the Child Support (Assessment) Act 1989. These changes (which came into effect on 1 July 2018) may impact parties who have signed a Binding Child Support Agreement purporting to finalise their child support matters on terms as agreed, rather than by adopting the formula the Department of Human Services (“Child Support”) uses.
The most crucial aspect of the changes is the fact that they are retrospective. This means that, even if you entered into an Agreement years ago, these changes will still affect that Agreement.
What are the changes?
In summary, the changes to the provisions regarding Binding Child Support Agreements may result in the Agreement being suspended, or terminated.
A Binding Child Agreement is suspended if:
a. There is a change in the care arrangements for a child so that a parent previously entitled to receive child support payments (“the eligible carer”) now only cares for that child (or children) for less than 35% of all overnights (“the former carer”); and
b. The period the former carer has not been an eligible carer is:
i. Less than 28 days; or
ii. 26 weeks where:
1. The Agreement states that it may be suspended if a parent ceases to be an eligible carer for more than 28 days; or
2. After the former carer ceases to be an eligible carer, each of the parties to the Agreement notifies the Child Support Registrar, before the end of the 28 week period, that the parties’ want the Agreement suspended for more than 28 days; or
3. The Child Support Registrar is satisfied that there are special circumstances in relation to the change in the care of a child.
If within the 28 day period, the former eligible carer resumes caring for the child again for more than 35% of all overnights, the Agreement is no longer suspended.
A Binding Child Support Agreement will be terminated if the former carer does not resume care for the child for more than 35% of all overnights within 28 days or 26 weeks (whichever is applicable).
It is also important to note that if the care arrangements only change for one child about whom the Binding Child Support Agreement relates, but not the other children, the Binding Child Support Agreement will be suspended or terminated insofar as it relates to that child. It will continue to operate as intended in relation to the other child(ren) if the parent continues to be an eligible carer of the child(ren).
What next?
The changes to the Child Support (Assessment) Act 1989 are changes that have drastically changed the landscape for Binding Child Support Agreements and it is highly likely that Agreements signed before 1 July 2018 do not cover these changes. If your care arrangements have changed since signing an Agreement, you may find that your Binding Child Support Agreement has been suspended, or even terminated.
If you have a Binding Child Support Agreement signed before 1 July 2018, we strongly advise you to contact our office and have one of our solicitors review same so that we can provide you with advice about how to proceed.
