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Binding Agreement - Part B Non-periodic payments

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Hi,

 My ex and I are trying to put together a binding agreement.  We are considering the option of Part B: Non-Periodic Payments and having a % payments made to third parties credited against the annual child support payable.  Anyway I was hoping someone could clarify a few things for me…

 We are hoping we can sign an agreement that allows payments to be made to more than one third party (ie multiple third parties) and does not specifically name who these third parties are.  And have these third party payments credited against the annual support payment at X%. 

 Is it possible to do this?  To have more than one third party who payments are made to?  And not to specifically name who these third parties are?  And have a set % which these payments are credited against the annual child support amount?  What proof that payments to third parties have been made would need to be kept? 

 So the agreement might state something like:  The parties agree that (payer) will have X% of the annual rate of child support credited as payments made to third parties and the remaining Y% of the annual rate of child support will be paid to (payee) in 12 monthly payments.  Payments made to third parties may include but not be limited to education costs, medical and dental costs, extracirricular activities and so forth.  (If this can be worded better I am open to suggestions!)

 Therefore if the agreed amount is 50% of the rate is credited as non-periodic payments and 50% is still payable to the payee..  If annual amount is $5000 then the payer would pay $2500/year (or 2500 / 12 months = $208/mth)

Thanks in advance!
Stringbean,
               I'm wondering if you are getting confused between Limited and Binding agreements. Basically the latter can be anything you wish. However you really do need to have it carefully worded so as to future protect the parties. Additionally, the agreements requires that both parents get a legal advisor to sign that they have received legal advice. Whilst limited agreements have a restriction in that must be as much or more than a notional assessment (i.e. an assessment done just to work out the rate at which CS would otherwise be paid).


With regard to distribution perhaps you could say something like the annual payment will will distributed from the payer to the other carer or carers, parent and non-parent, according to the percentage of the total remaining care, i.e. 100% less the care that the payer has, that the respective other carer has.

e.g. If the payer (A) has 20% care and B has 60% care and C has 20% care and the amount to be distributed is $10,000; then B will receive $7,500 and C will receive $2,500.

i.e. A non-liable carer will receive T * (OCCP / (100 - LPCP))

Where T is the total amount to be distributed, LPCP is the % of care that the liable parent has, and OCCP is the % of care that the other carer has.


You may wish to more closely align this with how care is then converted to a percentage to cater for purported differentials in lower levels care costing less. That is from 0-13% there is no care reduction and as such care at this level is deemed to cost nothing, at 14-34% the care reduction is 24% (again it purportedly costs the same to have a child 14% of the time as it does to have the child 34% of the time). If you're interested in other levels I can expand upon the care reduction (it then gets a little more complicated). You may also wish to consider that if a non-parent carer has the child less than 35%, then they will not receive CS under the formula.

You may wish to require the other carers, perhaps all carers, to provide some form of evidence of their care (I'm assuming, perhaps wrongly, that there may be a need to ensure that conflict does not make the agreement difficult to manage). A possible solution could be to have a care book that is passed from carer to carer perhaps with the signature of both carers upon a transition.

Note that I have very likely not used legal terminology so if you do adopt something based upon the above then you should have the someone check the terminology.
Thanks for your response MikeT.

I do understand the difference between a Limited and Binding Agreement.  I have already sort legal advice and will get more advice before lodging a final binding agreement.

I am not sure what I said that suggested their is any non-parent carers that care for my children?  My children are only in the care of me and my ex (no one else). Sorry for any confusion…

CSA have a form that can be used to create a inding (or Limited) Agreement and there are 3 parts any which can be used to make the agreement.  I am looking into the option of Part B - Non Periodic Payments.  The form can be found here: https://www.csa.gov.au/forms/ChildSupportAgreement.aspx

The forms states:

Part B: Non-Periodic Payments
Part B includes payments in a form other than periodic payments. It can include lump sum payments, or payments to a third-party. It also allows parents to have a formula assessment that includes some non-periodic payments.
  It specifially states "to A (meaning one) third-party".   Hence my question is it possible to have multiple third-parties these non-periodic payments can be made to?

Further Q19 gives the option of reducing the child support assessment either by a $ amount/year or by a % amount/year. 

Example:
Ex and I agree child support payable will be reduced 50% with the other 50% being made up non-periodic payments to other third-parties.  The annual amount of CS is $5000.  $2500 is payable as child support payments to the payee.  $2500 can be made up as non-periodic payments to third parties….this $2500 (for example) could be made up of:

$1000  - school fees, uniforms, books and excursions (educational costs) - this would mean payments being made to the school, a uniform shop, book shop etc ie multiple third-parties
$800 - sport fees, sport uniform and equipment costs (extra cirricular costs) - this too would mean payments being made multiple third-parties - the sports clubs, sports shops etc. 
$500 - Optometry
$200 - dental costs

Total = $2500

It won't be possible to put in the agreement specifically who all the potential third-parties will be.  Which is why I would like clarification is okay to state in the agreement "The parties agree that (payer) will have X% of the annual rate of child support credited as payments made to third parties…."or;

 does it have to state something more like "The parties agree that (payer) will pay $2500 to (Name of School) (so third party IS named) and will have this amount a credited towards the annual rate of child support." ? 

Am I being clearer now? Sorry for any confusion before. 
Ooops I totally misread what you wrote, my fault not yours. :$

I could see you specifying the NPP's either in bulk or as individual items. Very much as you have stated e.g. 50% of the amount of X (specifying previously how X is obtained) will be used by the payer to pay for Non-Periodic Payments and 50% will be paid to the recipient for the purpose of supporting the child/children. You might expand upon the NPP's and list them generically e.g. NPP's are comprised of School fees …..

Alternately I think you could specify the individual components by using the above but being more specific when listing the NPP's. e.g. y or y% of X for the purpose of school fees.

But very much as I said before, it is entirely up to you. Part of the legislation Part 6 (Sections 80A-96) inclusive do say that amounts have to be specified, however I believe a percentage of an amount, especially considering that a binding agreement can only be undone by both parties, would in many cases be the only practicable way without disadvantaging a party.
MikeT said
Part of the legislation Part 6 (Sections 80A-96) inclusive do say that amounts have to be specified

Hmm I thought that might be the case.  We don't want it to be a set amount…rather a % of the annual child support amount.  This being that if the CS annual assessment goes up or down then so does the amount that can be claimed as a non-periodic payment.  Don't want to agree to eg $2000 in non-periodic payments for this financial year (based on CS annual amount of $4000)  and then in a another financial year for CS payable to be eg $1500 but still have to accept $2000 in non-periodic payments.  on the flip side ex doesn't want to be liable for $2000 in non-periodic payments if the annual rate is less eg $1500.   Making sense? 

I did some research into private collect on csa website:

How to set up private payments
You dont need to tell us about your plans, but this guide can help you to set up a workable private arrangement.

  • After you receive your assessment, agreement or court order, check:
    • how much child support needs to be paid, and
    • if there are any specific instructions (if you have a court order).
       
[*]Decide how often payments will be made. For example, weekly, fortnightly, monthly, lump sum amounts.[/*][*]Decide how payments will be made.[/*]
  • Option Handy hint
    Cash Keep receipts to show the payment was for child support.
    Bank transfer Check with your bank as this could involve a fee.
    Salary deduction The paying parent should check with their payroll section to see whether this option is available.
    Personal cheque There may be clearance times for personal cheques.
    Bank cheque Money orders can be obtained from Australia Post, or money order and bank cheques through your bank.

[*]Decide if any or all payments will be in-kind or made to third parties.

In kind payments

Both parents need to agree on what will be done or given in-kind, how much its worth and how often it will be provided.

Third party payments

Both parents can agree upon anything they choose. Heres some examples:

 
  • Food, clothing, and household goods
  • Rent, mortgage payments or free accommodation
  • Health insurance or payments for medical or dental treatment
  • School fees, tuition or child care expenses
  • Loan, credit card and store account repayments
  • Travel or holiday expenses
  • Bills such as gas, electricity, telephone or council rates
  • Motor vehicle expenses
  • Sports club and coaching fees or other sporting expenses
  • Household repairs.
[/*][*]Put your arrangement in writing, and make sure both you and the other parent have a copy.
[/*]Okay so these "in kind payments" sounds like what ex and I want.  But when it says step 5 "put agreement in writing" is that a legally binding agreement?  Can be made into a legally binding agreement?  

Thanks again. 
The  other option is to not involve the CSA at all and just do what you want to do. There is no legal requirement to have CSA involved, in fact that is my current situation. However, FTB payments would be lower but you could likely quite easily ascertain by how much and factor this in.

Saying that 50% of something is an amount although I'm not sure what the legal definition, if there is one, of amount is. My understanding, which may be wrong, is that a term that is not defined in the definitions section, is then the ordinary use of that word. Therefore it may be that an amount is not necessarily a specific number. Hopefully an SRL might assist in this regard.

You should also note the following "You dont need to tell us about your plans, but this guide can help you to set up a workable private arrangement.". A few clues, a) you don't need to tell the CSA and b) the following is a guide. I believe the registrar (the CSA) would have to have a legal ground to reject your contract. I believe the only grounds would be if a) the CSA's form was not used, or b) that the signatures of the legal advisers was not present.

Perhaps Secretary_SPCA could ask the CSA if they have ever rejected a binding agreement and if so for what reasons.
Binding agreements are virtually rock solid for the duration specified. I can check if there have been exceptions but I am not aware of any. As soon as one party informs the CSA that there was a binding agreement the commentary generally is that they are binding for the period established.

NAP's under the old regimes were available across all bands of care. Now they are only applicable at the lowest band of care. It is worth reading the CSA guidelines on NAP's to get a feel for what was intended. The levels of care had a big impact after 2008 asd the discount for care was supposed to offset the NAPs.

As Mike has said you actually don't need to be involved in the Child Support Agency at all if you can agree between the parents as to what you want to do. The calculators on the site here can give you a pretty good idea of what payments are required and from there you can negotiate whatever package you like IF both of you agree. I assume the 3rd party funds are being put aside to pay some of the ancillary costs that will come along later on.

Is this % to be placed in a bank account that both parents draw on for agreed expenses or is it some other arrangement?

I think you will find it somewhat of a chore paying a  % each time into different nominated parties like the dentist, the Dr , the school and I would also suggest that the third parties are defined and agreed up front. Usually NAP's and the like are set up as a discount to offset where the resident with most care is abusing the receipt of child support monies and say spending received funds on gambling or other non child focussed expenditure. The payee would then advise they were paying a NAP and the CSA were obliged to treat that as a reduction and offset from the Payer primary arrangement.

The Naps program was a good one and should really have been continued through all bands of care to ensure at least some of the money was spent on the key items.


Executive Secretary - Shared Parenting Council of Australia
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MikeT said
However, FTB payments would be lower but you could likely quite easily ascertain by how much and factor this in.
Why would they be lower?  If CS is collected privately does this automatically mean Centrelink reduces FTB payments?  Do I need to ring CL find out by how much? 


Secretary SPCA said
As Mike has said you actually don't need to be involved in the Child Support Agency at all if you can agree between the parents as to what you want to do. The calculators on the site here can give you a pretty good idea of what payments are required and from there you can negotiate whatever package you like IF both of you agree.
Is this agreement legally binding?  How do we make it legally binding?  Do we have the lodge the agreement with CS and then ask for private collection? 

Thanks SB
StringBean said
Why would they be lower?  If CS is collected privately does this automatically mean Centrelink reduces FTB payments?  Do I need to ring CL find out by how much?  

A major factor in regard to CS is that for every $1 paid in CS there is a corresponding $0.50 reduction in FTB paid. In order to try to enforce payment of CS and thus allow the Government to reap the benefit of passing on payment of that portion of the FTB to the parent, FTB payments are reduced quite considerably (I'm not sure how this is determined although I believe it can quite easily be $100+ per fortnight). You could try ringing CL to find out. Alternately you could work this out by using the CSA/CL/FAO Estimator, which can be used for working out FTB. However, I believe that it doesn't take into consideration CS not paid, even though I think it asks the question; this to purposefully result in an inquiry and the greater likelihood of the CSA being used and thus the benefit by the way of a parent paying the FTB rather than the Government. Hence why I and many understand that in reality the FTB reduction portion of CS is, to the Government, a tax by all other than name. You would then compare this to the FTB payment to determine the reduction.

StringBean said
If CS is collected privately does this automatically mean Centrelink reduces FTB payments?
I believe not as you can specify how much CS is paid when applying for FTB (I'm not sure if checks are undertaken if CSA assessment isn't used, my guess is that checks would be undertaken). However, it would not surprise me if FTB is reduced even if specifying what CS is paid.  (Note that there are two aspects to CS. Assessment and Collection. One can be assessed and not have the CSA collect, a large proportion use this combination, however the answer given assumes the situation of neither).

StringBean said
Is this agreement legally binding?  How do we make it legally binding?  Do we have the lodge the agreement with CS and then ask for private collection?
 To not use the CSA for assessment is not legally binding. Without a binding agreement, either parent can, at any time, apply for CSA assessment. The only way that it can be legally binding is to make it into a binding agreement and lodge the binding agreement with the CSA. With regard to collection, a parent actually has to apply for CSA collection. The default is private collect.

Another option, which could well not be accepted, would be for a court order, which normally overrules CS legislation. Not that it's often used, rather that CS legislation allows court rulings to override. However, I believe courts would, except in quite exceptional situations, say use the CS legislation and thus use the CSA. So I don't believe that this is a usable option and if attempted would likely result in money thrown in the bin and bad experiences.
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