Recent amendments to the Child Support (Assessment) Act 1989 are retrospective and affect all Binding Child Support Agreements.
The changes suspend agreements that do not address what occurs if a child's living arrangement changes, and if a parent previously entitled to child support now cares for the child for less than 35% of all overnights. Agreements are terminated where the former carer's time with the child does not return to 35% or more of all overnights within 28 days or, in limited circumstances, within 26 weeks.
These amendments are significant because agreements drafted before 1 July 2018 are unlikely to address the new requirements. Therefore, there will be many parents who think they have a binding and enforceable agreement; however, it may already be suspended or terminated because of the amendments.
WHAT ARE THE NEW AMENDMENTS TO THE CHILD SUPPORT (ASSESSMENT) ACT 1989?
On 1 July 2018, amendments to the Child Support (Assessment) Act 1989 were made via the enactment of the Family Assistance and Child Support Legislation Amendment (Protecting Children) Act 2018. Among those were a series of changes affecting Binding Child Support Agreements.
In summary, from 1 July 2018 onwards, agreements will be suspended where:
- a parent previously entitled to child support pursuant to the agreement (the eligible carer) now cares for the child for less than 35% of all overnights (the former carer); and
- the period the former carer has not been an eligible carer is:
- 28 days or less; or
- 26 weeks, where:
- the agreement provides that it may be suspended if a parent ceases to be an eligible carer for more than 28 days; or
- both parents advise the child support registrar that they want the agreement suspended for more than 28 days before the end of the 26 week period; or
- the child support registrar is satisfied that there are special circumstances in relation to the change in the care of a child.
If a former carer becomes an eligible carer again within the 28 day or 26 week timeframe (whichever applies) before the suspension ends, the agreement is no longer suspended.
The agreement terminates if the suspension period ends (whether it is 28 days or 26 weeks) and the former carer has not returned to being an eligible carer.
If the agreement is suspended or terminated in relation to one child, it may continue in relation to other children; if the parent continues to be an eligible carer of those other children.
WHY ARE THE NEW AMENDMENTS SIGNIFICANT?
The new amendments are retrospective. This means they affect all agreements; regardless of whether they were signed years before the new amendments came into effect.
Agreements are prepared by family lawyers to comply with the requirements of the Child Support (Assessment) Act 1989 at the time of drafting. The new amendments could not have been anticipated by family lawyers drafting agreements previously. Therefore, it is likely that most agreements entered into prior to 1 July 2018 do not address the issues raised by the new amendments.
If a previous eligible carer for child support is now a former carer, it is possible their agreement is now suspended given the new amendments. Further, if the former carer does not return to being an eligible carer before the end of the suspension period, the agreement will be terminated and child support will be paid as assessed or the parties will need to enter a new agreement.
Cooper Grace Ward is a leading Australian law firm based in Brisbane.
This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please contact Cooper Grace Ward Lawyers.