What is child support?
Child support is paid by the paying parent to the receiving parent (generally, whoever is the primary caregiver) and is designed to help cover the associated day-to-day expenses of raising children, such as food, medical costs, clothing, and housing. These types of payments are referred to as periodic payments and are administratively assessed by the Child Support Agency (if obtained).
But what if the most expensive cost of raising your child is their private school fees? Who is liable to contribute or meet this cost?
Parties can directly agree to meet non-periodic payments, such as private school fees, extra-curricular activities, out-of-pocket medical expenses and private health insurance directly between themselves.
Parents can also agree to reoccurring periodic payments of a specific amount to the receiving parent over and above the administrative assessment.
There are two types of child support agreements:
- Binding Child Support Agreement (“BCSA”); or
- Limited Child Support Agreement (“LCSA”).
Alternatively, parties can apply to the Family Court of Western Australia for a departure order to depart from the administrative assessment.
Binding Child Support Agreement (“BCSA”)
A BCSA is entered pursuant to section 80C of the Child Support (Assessment) Act 1998 (“the Act”) and enables the parties to agree to how parents will contribute to children’s expenses until the child turns 18, including but not limited to who is liable, or what percentage the parents will contribute to:
- The children’s private school fees and associated costs, such as uniforms, books, technology and excursions;
- Private health insurance and out-of-pocket medical expenses;
- Extracurricular activities and equipment;
- Travel-related expenses; and
- Periodic payments.
Both parents will require separate and independent legal advice before entering into a BCSA, as the agreement is binding until the child turns 18 and is difficult to set aside once entered into unless:
- a termination agreement is entered (which, again, requires both parents to obtain independent legal advice);
- a termination clause overriding the BCSA is included within a second BCSA; or
- a Court Order is obtained varying or setting aside the agreement.
Limited Child Support Agreement (“LCSA”)
An LCSA is entered pursuant to section 80E of the Act and allows parents some flexibility to determine their own child support arrangements. Unlike BCSAs, LCSAs can be entered into without parents obtaining legal advice. The Child Support Agency will not accept an LCSA unless:
- The agreement is in writing and signed by both parents;
- An administrative assessment from the Child Support Agency is in place; and
- The amount payable under the agreement must be at least equal to, or more than, the administrative assessment.
After 3 years, the parents can elect to terminate the LCSA without the other parent’s consent by notifying the Child Support Agency.
If the parents cannot agree to enter a BCSA or LCSA, and the receiving parent is unable to support the children financially or if the other parents’ taxable income does not accurately reflect their actual income, either parent may apply to the Family Court to seek to depart from the administrative assessment of child support, and seek orders, for example, one party to meet the children’s private school fees.
To obtain a departure from the administrative assessment, a ‘three-step process’ must be followed, and the applicant must:
- Show grounds within section 117(2) of the Act;
- Establish that it is ‘just and equitable’ within the meaning of section 117(4) of the Act; and
- Establish that it is “otherwise proper” within the meaning of section 117(5) of the Act.
Do you need help reaching an agreement?
We recommend obtaining legal advice to help you understand the advantages and disadvantages of the different options above and what will work best for you and your children. Loukas Law can assist you with negotiating, drafting, and finalising a BCSA or LCSA or making an application in the Family Court.