Amendments to the Child Support (Assessment) Act that came into effect on 1 July 2008 introduced 2 different types of Child Support Agreements; being a Binding Child Support Agreement and a Limited Child Support Agreement. Further, those amendments abolished the provisions in the Act that enabled a party to seek variations to a Child Support Agreement and instead provided that a Binding Child Support Agreement could only be terminated.
The circumstances in which a party can seek to terminate a Binding Child Support Agreement are limited.
Prior to 1 July 2008 the Child Support Agency "vetted" all existing Child Support Agreements to determine whether those agreements could be "transitioned" into the post 1 July 2008 Child Support regime. If so, those agreements have been classified as a special type of Binding Child Support Agreement. Such an agreement can no longer be varied and can only be terminated.
There have been a number of decisions of Federal Magistrates since 1 July 2008 whereby "old" Child Support Agreements have been terminated and where the Court took into account the fact that the Agreement was a pre 1 July 2008 agreement.
1 July 2008 also saw the introduction of a totally different formula for the calculation of child support.
If you are a party to a pre 1 July 2008 Child Support Agreement that has been "transitioned" as a Binding Child Support Agreement and you are financially disadvantaged as a consequence because the amount of child support that you are paying pursuant to the "old" agreement is more than you would be paying under the post 1 July 2008 assessment formula or, under the "old" agreement you are now receiving less than you would be entitled to receive by way of child support post 1 July 2008, you should investigate whether you could today commence proceedings to have the "old" agreement terminated. If the "old" agreement is terminated by the Court, the child support that you would thereafter pay (or receive) would be pursuant to the new child support formula for payment of periodic child support. Alternatively you could negotiate a new limited or binding agreement with your former spouse.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
