Assessing a new Child Support agreement 277-02010010

Parents and non-parent carers can set the financial particulars of their child support using a Child Support Agreement form or other written format.

Note: the acceptance or refusal of domestic agreements is managed by the Agreements and Court Orders Team, see Customer Referral guidelines for Child Support staff for more information.

Examine the documents received in relation to current activity on the customer’s case and take appropriate action.

If the child support agreement was made before 1 July 2008, but the application for acceptance of the agreement is made after 1 July 2008, see Administering agreements and court varied assessments (CVA) lodged post 1 July 2008 that include pre and post 1 July 2008 periods.

Note: consent orders are court orders made with the consent of the customers and must not be accepted as agreements. If consent orders are identified, see Court varied assessments (CVA) including lump sum orders (CS).

Change of Assessment (COA) in progress

If there is a COA in progress, see Step 3 on the Process page in Recording a Child support agreement.

End Agreement

If a written request to end an accepted Binding or Limited Agreement, or a court order setting aside an accepted agreement is identified, see Ending a child support agreement.

Proposed minutes of consent

If it is identified that documents of proposed minutes of consent may constitute a child support agreement, seek advice from a Service Support Officer (SSO).

Agreements must be accompanied by an application for acceptance of the child support agreement from 1 of the parties to the agreement. Applications for acceptance can be made in writing or verbally.

Section 1 of the Child Support Agreement form constitutes an application for acceptance. If there is no written application for acceptance, contact the customer to apply verbally by phone. See Contact with Child Support customers.

Child Support customers can only apply for acceptance of their child support agreement. After the supplied documents have been fully examined and considered, Child Support will decide if the agreement satisfies the requirements for acceptance as a binding or limited agreement.

A customer may withdraw their application for acceptance of their child support agreement at any time prior to Child Support making a decision on the application.

Application withdrawn or refused and customer re-applies for acceptance of the same child support agreement

If an application for acceptance of a child support agreement is withdrawn or refused, a customer (either the original applicant or the other party) may re-apply to have the same child support agreement accepted at a later date and Child Support can use the agreement that is already on the system record. The customer does not need to re-submit the same agreement with their application, but can do so.

This may arise when the original application was refused and the subsequent application for acceptance can now be accepted. Examples of this are:

• a pre-condition in the child support agreement had not been met, but this pre-condition is now met, or
• the annual rate payable under a limited agreement was not equal to or greater than the annual rate payable under the assessment, but it now meets that test

If the application for acceptance relates to a child support agreement that is already on the system record, contact both customers to confirm that the agreement has been identified correctly and that there is a common understanding of the terms of the agreement. See Table 1 Step 2 in Interpreting and making a decision on a Child Support agreement.

Refuse to accept an agreement if:

• the assessment commenced with an application from an overseas authority of a reciprocating jurisdiction, and
• the overseas authority of a reciprocating jurisdiction does not support the acceptance of the agreement

If it is not clear whether the overseas jurisdiction supports the acceptance of the agreement, seek assistance from an International SSO. Document the decision.

An agreement is properly made if it is:

• in writing
• signed by the parties to the agreement
• made in reference to an eligible child with eligible customers to the agreement
• made in reference to a carer entitled to child support
• of a type that includes provisions that may be included in agreements
• a binding or limited child support agreement, and
• initialled by all customers if any alterations have been made

If customers have already made alterations to the agreement before asking for it to be accepted, follow different processes depending on the type of agreement lodged.

For Alterations to a binding agreement (before acceptance by the Registrar), see Step 4 in the Binding child support agreements table.

For Alterations to a limited agreement (before acceptance by the Registrar), see Step 3 in the Limited child support agreements table.

The agreement must include and be signed by all parties to the agreement.

The parties can sign the same child support agreement, or each sign separate copies of a child support agreement. Where the parties each sign separate copies, the terms of each copy must be identical.

The made on date of the agreement is the date that the last party to the agreement signed the agreement. If this date is not clear, see Table 1 Step 2 in Interpreting and making a decision on a child support agreement

An agreement (limited or binding) can only be accepted when there is an eligible payee, payer and child.

If the agreement includes more than 1 child, the agreement may be accepted for any other child/ren but not for ineligible children. See Table 1 Steps 4 & 5 of Interpreting the and making a decision of a Child Support Agreement.

The References page contains links to the Child Support Guide 2.1.1: Applications for Assessment and 2.1.2: Eligible child. These chapters provide definitions of eligible payee, payer and child.

From 1 July 2018, an agreement is not a child support agreement if it provides for child support to be paid to a party who is not an eligible carer of the child. For WA ex nuptial children, the section 85 requirements apply to agreements:

• made on or after 15 May 2019, or
• made before 15 May 2019, but after 1 July 2018, where the application for acceptance is made on or after 15 May 2019

For all other cases, section 85 applies to agreements made on or after 1 July 2018.

The agreement must be refused in relation to a child if it provides that a person will receive child support - in the form of either periodic or non-periodic payments - when customers are not an eligible carer of that child.

If the agreement includes more than 1 child, the agreement may be accepted for any other child/ren not affected by these provisions. However, consider the agreement in its entirety to determine if the provisions allowing a non-eligible carer to receive child support are severable to the agreement provisions for the other children. If not severable, the agreement should be refused for all the children. See Table 1, Steps 4 & 5 of Interpreting and making a decision of a Child Support agreement.

Dual role agreements

Where both parents are liable parents and receiving parents according to the terms of the agreement, the agreement may be treated as if it contains 2 separate agreements. In such cases, where there are provisions that contravene section 85, it may be possible to refuse 1 agreement but accept the other.

See Resources for Section 85 examples.

The child support agreement must include 1 or more of the following provisions:

• a periodic amount (regular amounts payable on a regular basis) payable by 1 party to the other. These may be paid directly to the other parent or non-parent carer, to their bank account, or to a third party acting as the agent of the payee, such as a solicitor or trustee
• a variation to the periodic amount already payable by 1 party to the other
• a variation to the components of the child support formula
• a non-periodic payment provision where payments are to reduce the annual rate of child support payable by the parent under the child support assessment
• that a parent is to provide child support in a form other than by a non-periodic payment provision or lump sum payment provision.
  If the agreement does not specify that non-periodic payments will reduce the child support liability by an amount or percentage, they are deemed to be child support in a form other than by a non-periodic payment or lump sum payment and are in addition to the child support payable. The References page contains a link to the Child Support Guide 2.7.1: What is a child support agreement?
• a parent is to provide child support in the form of a lump sum payment to be credited against the parent’s child support liability. An agreement where child support is paid in the form of a lump sum that is to be credited against the liability must be a binding agreement.
  Not all agreements that refer to payments of lump sums will be ‘lump sum payment provisions’. Agreements will only come within the specific definition of a lump sum payment provision if they provide for the lump sum to be credited against the liability payable under the assessment (as opposed to reducing (or not reducing) the annual rate payable in the assessment).
  If there are not ‘lump sum payment provisions’, they could be either a (lump sum) non-periodic payment provision that is to reduce the annual rate (if that reduction is specified), or if no reduction to the annual rate is specified, the (lump sum) non periodic payment will be taken to be in addition to the child support payable
• to end the liability of a party to pay or provide child support from a date specified, see Ending a Child Support agreement. The specified day must be a future date

Binding child support agreements allow parents to make binding financial agreements about child support. Binding child support agreements operate in a similar manner to binding financial agreements that separating parents might make in relation to property, superannuation and spousal maintenance.

A binding child support agreement cannot be varied (section 80CA). To change a binding child support agreement, the agreement must be terminated and replaced with a new binding child support agreement.

A binding agreement must include:

• a written statement confirming that each customer has received independent legal advice on the effect of the agreement and the advantages and disadvantages of making the agreement before it was signed. This statement must be part of the agreement, but it can be present in either the Recitals portion of the agreement, or the operative provisions of the agreement, and
• a Legal Certificate from each customer’s independent legal practitioner who provided advice on the terms of the agreement

If all the required documents have not been received, contact the customer and negotiate a reasonable timeframe for them to be sent in. Contact the other parties to the agreement to advise of the delay.

Legal practitioner

A legal practitioner for the purposes of s80C(2)(c) of the Child Support (Assessment) Act 1989 must:

• be a lawyer who has been admitted by the Supreme Court of a State or Territory of Australia or a federal court
• hold a current practising certificate

Child Support will not accept a binding agreement that has been certified by an overseas lawyer who does not meet these criteria.

Child Support will generally not question whether the legal advice was independent except in the following circumstances:

• one party, as a qualified legal practitioner, has provided legal advice to the other party to the agreement
• one party, as a qualified legal practitioner, has provided legal advice to themselves, and
• the same legal practitioner has provided legal advice to both parties

In such cases, Child Support will not consider the legal advice to be independent and the child support agreement will not be accepted as a binding agreement.

If an agreement is received which does not meet the legal advice requirements, contact the customers to explain the requirements for a legal practitioner for a binding child support agreement.

The parent who asked for the agreement to be accepted may wish to withdraw the application for acceptance and re-apply once independent legal advice has been obtained and a new agreement has been signed. The independent legal advice cannot just be provided after the old agreement was already signed - it must be provided before an agreement is signed.

Document the conversation on the Additional Registration Information window notepad.

Documents that cannot be accepted as a binding agreement may satisfy the criteria for acceptance as a limited agreement. See Step 1 in the Requirements of limited child support agreements table. Contact customers as a decision must be made to either proceed with a limited agreement or withdraw their application for acceptance of the agreement.

A binding agreement without a lump sum payment provision can be for any amount, and there does not need to be an existing administrative assessment. Go to step 2

If an agreement contains lump sum payment provisions, there must be an existing administrative assessment, and the amount of the lump sum must equal or exceed the current annual rate of the administrative assessment. An agreement with lump sum payment provisions cannot be an initiating agreement. Go to step 3.

Customers may apply for acceptance of a binding agreement without an existing child support assessment in place. If the agreement is accepted there will be no underlying assessment and therefore no child support will be payable when the agreement ends or if it is suspended due to a care change. See Suspending or Ending a Child Support agreement due to care and Ending a child support agreement.

In these initiating agreement cases, contact the customer who applied for acceptance of the agreement to advise that there will be no underlying administrative assessment of child support once their agreement ends or if it is suspended due to a care change. Give the customer the option of withdrawing their application to accept the agreement and resubmit it after the customer have applied for an administrative assessment and that assessment is in force.

Note: in this option, the customer must take specific actions to prevent the agreement being an initiating agreement. The customer cannot add on an application for an administrative assessment. They must withdraw their application to accept the agreement, and make an application for an administrative assessment and must wait until the administrative assessment is made and in force, before re-submitting an application to accept the agreement.

If the customer declines that option and wants to continue their application to accept the agreement, continue assessing the agreement. Tell the customer:

• if the agreement is accepted it will be an initiating agreement, and
• there will be no underlying assessment of child support once their agreement ends or if it is suspended due to a care change

Advise the customer this means if their agreement ends, a new application for an administrative assessment will be required to have a formula administrative assessment. If their agreement is suspended due to a care change, any party to the agreement may elect to end the assessment then apply for a formula based assessment in order for child support to be payable. See Suspending or Ending a Child Support agreement due to care.

If there is no existing administrative assessment, the Registrar must also be satisfied that the parties to the agreement are parents or eligible non-parent carers before a binding agreement can be accepted. The References page contains a link to the Child Support Guide 2.1.3 Parentage and 2.1.1 Applications for Assessment, Eligible carer.

Ensure the Initiating Agreement check box is selected in the Additional Registration Information window.

In some circumstances, the agreement document itself may satisfy the presumption of parentage requirements under Section 29(2)(d) of the Child Support (Assessment) Act. For presumption of parentage to be satisfied based on the agreement itself, the agreement would need to be properly made, signed by the person, and specifically acknowledge that the person is a parent/mother/father of the child. Otherwise, one of the other conditions for presumption of parentage must be met.

If the initiating binding agreement does not include an application for acceptance or other information required to register the new case:

• attempt phone contact with the parties to request the information.
• if phone contact is not successful, send UQ120.10 Initiating agreement pre-registration letter to request contact

When speaking with the parties to an initiating agreement, the following information must be discussed:

• any court orders affecting child support
• application for acceptance of the agreement
• presumption of parentage requirements
• care (for children of the relationship and any relevant dependants)
• Children about to turn 18 – whether an extension is required
• Income of parents – and how it will be used in a Notional Assessment
• How Notional Assessments can affect FTB
• Collection options
• Advising us re changes in circumstances
• Online services
• Whether contact details for the other parties are required
• Support for separated parents, including Family & Domestic Violence support if required

Note: When registering an Initiating Agreement, ensure the Initiating Agreement check box is selected in the Additional Registration Information window.

As well as meeting the requirements of a binding agreement, lump sum binding agreements must also meet the following conditions:

• there must be an administrative assessment in place prior to the application for acceptance of the agreement being made
• it must state the lump sum payment is to be credited against the amount payable under the liable parent’s liability under the administrative assessment
• the amount of the lump sum payment is specified in the agreement
• the amount of the lump sum must equal or exceed the current annual rate of the administrative assessment
• the lump sum payment provisions may also state that the lump sum payment is to be credited by a nominated percentage. If not, it must be credited at 100% of the amount payable until the amount is exhausted

The lump sum payment is credited against the payer's liability under CSRC Act section 69A (rather than reducing the annual rate of child support payable under the administrative assessment). As at 1 July each year, the remaining lump sum credit is indexed in accordance with changes in the Consumer Price Index (CPI). The References page contains a link to the Child Support Guide 5.3.3 Crediting Lump Sum Payments.

If a binding agreement includes initialled changes, contact the parties and confirm whether the initialled changes were made before, or after receiving their independent legal advice.

If the initialled changes were made before receiving their legal advice, those changes should have been discussed with their legal practitioner, and should be covered by the Legal Certificate completed by that practitioner.

If the initialled changes were made after receiving their legal advice and after the Legal Certificate was completed, they can only alter a binding agreement by seeking legal advice about the changes. Customers must consult their respective legal practitioners and obtain a new legal advice statement and Legal Certificate from their respective legal practitioner that addresses the changes before they initial any changes.

Document the discussions with the customers and any conclusion you reach about whether the initialled changes were made before or after the independent legal advice was provided and the Legal Certificate was completed.

If the initialled changes were made after the independent legal advice had already been provided about the original terms of the agreement, the changed agreement will not meet the requirement that independent legal advice must be received before the agreement is signed, and the agreement cannot be accepted as a binding child support agreement.

Limited child support agreements do not require the parties to have received legal advice before entering into the agreement.

A limited child support agreement cannot be varied (section 80F). To change a limited child support agreement, the agreement must be terminated and replaced with a new limited child support agreement.

Limited agreements can only be accepted when the following requirements are met:

• an administrative assessment is in force at the time an application for acceptance of the limited agreement is received. If there is no administrative assessment or the administrative assessment is pending, go to Step 2
• the annual rate of child support payable under the agreement is equal to or greater than the annual rate payable under the assessment for the whole period. Go to Step 3

Refuse the application for acceptance for a limited agreement if:

• there is no administrative assessment or
• a pending assessment in place on the day the application for acceptance of the agreement is received by Child Support.

Contact customers to advise that can re-apply for acceptance of their agreement once their administrative assessment has been accepted and the annual rate of child support is known.

Alternatively, the customer can withdraw their application to accept the agreement and resubmit it after the administrative assessment is in force.

Parties must sign identical documents to make a valid child support agreement. Alterations must be initialled by all parties to show that were made before the agreement was signed.

If the alterations aren’t initialled by all parties, contact the customers and document discussions.

If no dispute about whether the alteration was made before or after the agreement was signed

If an alteration is not initialled, or is only initialled by 1 party, and the parties confirm the alteration was made before the agreement was signed, then the parties have signed identical documents and the altered agreement is valid.

If an alteration was made after one, or both parties signed the agreement and both want the altered agreement to have effect, any alterations must be initialled by the parties and the agreement signed again for the altered agreement to be valid.

If there is a dispute about whether the alteration was made before or after the agreement was signed

If an alteration is not initialled, or is only initialled by 1 party and there is a dispute between the parties as to whether the alteration was made before or after an agreement was signed, the Registrar must decide whether an identical document has been signed.

If both parties signed an identical document before an alteration was made, the Registrar can accept the original agreement, without taking account of the alteration.

If the alteration was made after the agreement was signed by 1 party but before it was signed by the other, the parties did not sign the same document and there is no agreement between them.

If the commencement date of the agreement is the same day the application for acceptance of the agreement was received by Child Support, or it is to commence on a future date, compare the annual rate of child support payable under the limited agreement with the annual rate payable on the day the agreement is to start.

If the commencement date is prior to the date the application for acceptance of the agreement was received, compare the annual amounts payable under the agreement for the past period with the amount payable under the assessment for that past period. When comparing past periods, compare the amount of child support that was payable for the whole period with the amount provided for in the agreement for the whole period.

If the customers have made a new ongoing limited agreement that also ends a limited agreement that is currently in force, apply the above 2 paragraphs by comparing the annual amounts payable under the new limited agreement, with the annual rate payable under the current limited agreement. If the annual rate of child support payable under the new limited agreement is equal to or greater than the annual rate, payable under the current limited agreement, it will meet legislative requirements and may be accepted.

Prior to comparing the rates of child support payable, all pending modifications that could affect the annual rate payable must be processed as this may affect whether or not the agreement is accepted. If the assessment is based on provisional incomes, attempts must be made to replace them with more accurate incomes.

Determine the annual rate of any non-periodic payments and add this amount to any periodic payment that is also payable.

If the agreement does not specify a value for the non-periodic payments, contact both customers and ask them for an approximate value of the non-periodic payments. For example, if it is school fees, how much is the annual amount of school fees being paid, if it is medical insurance, how much are the annual premiums.

As long as the customers are making a reasonable approximation of the real value of the non-periodic payments, we don’t need proof of the value, and we can proceed to decide whether the total child support being provided is at least equal to the present administrative assessment.

If the value appears to be possibly inflated, request some evidence of the value to allow determination of the annual value of the total child support being provided.

If the agreement starts:

• on or after the date the application for acceptance of the agreement was lodged - determine the annual value of non-periodic provisions for a 12 month period from the date the agreement starts, or
• before the application for acceptance of the agreement was lodged - determine the value of the non-periodic provisions (to obtain the annual rate, total the non-periodic payments paid in the past period, divide by the number of days in the past period and multiply by 365.25)

Prior to comparing the rates of child support payable, all pending modifications that could affect the annual rate payable must be processed as this may affect whether or not the agreement is accepted. If the assessment is based on provisional incomes, attempts must be made to replace them with more accurate incomes.

Customers who submit a limited agreement that is incomplete or not properly made can pursue options such as:

• withdrawing their application for acceptance of the agreement
• making a new agreement, or
• updating a copy of the original agreement, ensuring all changes on identical copies are initialled by all parties to the agreement

Do not forward the original agreement or attachments to either customer. Remove customer address and contact details from the agreement and attachments before forwarding a copy to the customers.