In 2008, how did CSA determine whether an agreement was binding or limited?
2.2 (a) Binding child support agreementsBinding agreements are intended to provide a high level of certainty and finality about child support arrangements for parents. Legal advice is therefore required to ensure that parents understand the consequences of making such an agreement, and to provide some protection against coercive or misleading behaviour. Any transfer of an amount (such as a house) under the "lump sum payment" provisions effective from 1 July 2008 must be made via a binding agreement (subsection 84(7)(a)).
Binding agreements must contain a statement that each party obtained independent legal advice before the agreement was signed. Each part's legal practitioner certifies, in an annexure to the agreement, that they have provided independent legal advice as to:
- the effect of the agreement on the rights of that party;
- the advantages and disadvantages, at the time that the advice was provided, to the party of making the agreement.
The terms of a binding child support agreement can be for more or less than the relevant formula assessment for child support. A formula assessment does not need to be in place before the agreement is lodged.
Binding agreements are intended to provide for longer term arrangements. If the parents both wish to end the agreement before the agreed end date, they must once again seek independent legal advice and make a formal Termination Agreement, or a new binding agreement that also terminates the previous agreement (section 80D).
If only one parent wishes to end the agreement, they may seek a court order to set the agreement aside, but such an order will be available only in very limited circumstances. The court must be satisfied that the agreement of the party was obtained by fraud or failure to disclose material information, or through undue influence, duress, or unconscionable conduct such that it would be unjust not to set the agreement aside. The court can also set the agreement aside where it is satisfied that exceptional circumstances have arisen since the agreement was made, such that the child or applicant will suffer hardship if the agreement remains in place (subsection 136(2)(d)).
Due to these requirements for ending a binding agreement, it is particularly important that binding agreements are drafted in a way that takes account of the changing circumstances in which parents may find themselves. More information on binding agreements is available in chapter 2.7.1 of The Guide: CSA Law and Policy, available at www.csa.gov.au.