Child Support Agreements – How binding are they?

You’re entering into a Binding Child Support Agreement. So how “binding” is it really?

There are certain requirements a Binding Child Support Agreement must meet for it to be binding in the first place.  Those are:

• It must be signed by both parties. 
• Before signing the Agreement, both parties must have received independent legal advice from their own lawyer about the nature and effect of the Agreement, and the advantages and disadvantages to him/her in entering it. 
• The lawyer for each party must sign a Statement that they provided the required advice (that Statement is attached the Agreement). 
• The parent receiving the child support must be an “eligible carer” which means that they must have at least 35% care of the child/ren.

If the Agreement meets the requirements above, can it be set side or altered?

A Binding Child Support Agreement can be set aside by a Court in the following circumstances:

1. If a party entered into the Agreement where the other party provided fraudulent or significantly incomplete information; 
2. If a party entered into the agreement under undue influence or duress; 
3. If a party entered into the agreement because they were unconscionably taken advantage of; or 
4. Exceptional circumstances have arisen since the Agreement was entered into, which would cause a party or child to suffer hardship if the Agreement is not set aside. 

What is an exceptional circumstance? 

For circumstances to be “exceptional”, they must be so out of the ordinary that they could not reasonably have been expected to occur.

A party’s income decreasing or a party losing their job is not automatically an “exceptional” circumstance.   It is therefore vital that your Agreement covers what is to happen if a party’s income decreases or they are unable to work, so that you are not left with an obligation to pay child support that you cannot meet.

Is the COVID-19 pandemic an exceptional circumstance?

The case Martyn & Martyn [2020] held that the COVID-19 pandemic could amount to exceptional circumstances. In this case, the parties entered into a Binding Child Support Agreement in 2012, which provided for the father to pay $1,350 per month to the mother (with that sum to increase each year by 2%). The father operated a company that supplied products to international businesses, and a result of border restrictions, it suffered a downturn of approximately 90% in 2020.  As a result of the downturn, the father was unable to meet his own expenses, as well as his child support obligations pursuant to the Binding Child Support Agreement and filed an application with the Court to set the Agreement aside. The Court found that the COVID-19 pandemic was an exceptional circumstance and set aside the Binding Child Support Agreement.

What if the children’s care arrangements change? 

It is also important to keep in mind that a Binding Child Support Agreement will generally terminate if, for a period of longer than 28 days, the parent who is entitled to be paid child support pursuant to the Agreement does not care for the child/ren for more than 35% of the time. So, for example, if a parent who usually pays child support pursuant to a Binding Child Support Agreement becomes primarily responsible for the care of the child/ren, the Binding Child Support Agreement may be terminated, unless there is a specific clause in the Agreement altering this.

What if both parents want to end the Agreement or change the Agreement?

If you and your ex-partner have a Binding Child Support Agreement in place and you agree to change it, the only way you can do this is to formally terminate it by entering into a “Termination Agreement” and then enter into a whole new Binding Child Support Agreement.  You cannot simply amend the existing Agreement.  It is vital that you execute the proper documents to ensure you are achieving what you and your ex-partner are intending to achieve.

If you, or someone that you know is struggling with the terms of a Binding Child Support Agreement, call us on 07 3236 4504 to make an appointment to discuss.