Child support agreements

Background

10.3 The Child Support (Assessment) Act 1989 (Cth)provides that parties can make an agreement regarding child support, and apply to the CSA to accept the agreement.^[1] Parenting plans, as well as maintenance and financial agreements under the Family Law Act,may operate as child support agreements, where they comply with the requirements of the Child Support (Assessment) Act.^[2]

10.4 The provisions that may be included in child support agreements are specified in the Child Support (Assessment) Act. Examplesinclude varying the rate of child support payments, and providing for non-periodic payment of child support,^[3] such as lump sums, or non-cash payments like school fees or rental payments.

10.5 Child support agreements contain certain safeguards that may protect parties from financial disadvantage. There are two types of child support agreement: binding child support agreements, and limited child support agreements. These agreements contain different safeguards.

10.6 A binding child support agreement must contain a statement from each party that he or she was provided with independent legal advice about the agreement’s effect on his or her rights, and its advantages and disadvantages.^[4] The agreement must also include a certificate signed by a legal practitioner stating that the advice was provided.^[5]

10.7 In a limited child support agreement, a child support assessment must be in force at the time that parties make an application to the CSA to accept the agreement.^[6] The annual rate of child support under the agreement must equal or exceed the annual rate of child support under the assessment.^[7]

Submissions and consultations

10.8 In Family Violence and Commonwealth Laws—Child Support and Family Assistance, ALRC IP 38 (2010), (the Child Support Issues Paper), the ALRC asked whether these safeguards in limited and binding child support agreements sufficiently protect victims of family violence from entering into disadvantageous agreements as a result of pressure or fear of the person who has used family violence—and, if not, what reforms are needed.^[8]

Existing safeguards

10.9 The Law Council of Australia Family Law Section (Law Council) and Bundaberg Family Relationship Centre considered the existing legislative safeguards in binding and limited agreements sufficient to protect family violence victims from entering into disadvantageous agreements.^[9] Similarly, the Commonwealth Ombudsman’s Office (the Ombudsman) stated that it ‘sees the value’ in the existing safeguards.^[10] National Legal Aid considered that the safeguards in binding child support agreements were sufficient.^[11]

Binding child support agreements

10.10 National Legal Aid commented that, to ensure the safeguards are applied effectively, ‘appropriate education/training for all people working in the system, including legal practitioners, must be provided’.^[12] Bundaberg Family Relationship Centre submitted that reassurance is needed that the ‘person providing the independent legal advice is aware of the violence’.^[13] The Sole Parents’ Union stated that the annexure to binding child support agreements provided by solicitors should include ‘a statement as to the advice given, their satisfaction that their client understood the advice, and the reason their client gave for not accepting their advice and signing a disadvantageous agreement’.^[14]

10.11 Regarding binding child support agreements generally, National Legal Aid noted its concern that

applying the principles of contract law to child support is inappropriate, and fails to allow for the exigencies of life as they may occur. For this reason, it is suggested that binding agreements should be limited to no more than 5 years, and that the requirements to set aside such an agreement be reduced from ‘exceptional’ to ‘significant’ circumstances. When responding to the future financial support of children, greater flexibility is required than can be delivered by contract law.^[15]

Limited child support agreements

10.12 In relation to limited child support agreements, National Legal Aid commented that customers contemplating such agreements

should always be referred for legal advice, because limited agreements are sometimes used to have the payee pay the payer’s share of an expense from the child support payments. This should not occur without the payee receiving advice about the terms of the agreement.^[16]

10.13 Such referrals could then ‘facilitate any other necessary family law or personal safety advice’.^[17]

10.14 The Ombudsman identified a different problem with limited child support agreements, which the parties can bring to an end if changed circumstances vary the child support amount by 15% or more. While acknowledging that this is an ‘important measure to ensure that child support assessments are fairly based upon the parent’s current financial situation’, the policy intention is ‘undermined if parents cannot easily avail themselves of their right to end a limited child support agreement’.^[18]

We believe the steps required for a person to take to end a limited agreement are unnecessarily complex. This could discourage a person from exercising their right to end a limited child support agreement which no longer fairly reflects the other parent’s capacity to provide financial support for their child. This is of particular concern for a vulnerable person with a fear of family violence.^[19]

Measures to complement legislative safeguards

10.15 National Legal Aid considered that initiatives such as the new national family violence training package for professionals in the family law system,^[20] supplemented by screening and risk assessment initiatives, ‘will help to support the intended effect of the legislation’.^[21] It recommended that lawyers should

certify that they have advised their clients in relation to family violence, and that a checklist to support the certification be completed. A checklist would act as a prompt for lawyers and a further safeguard to ensure that these issues are canvassed with the client.^[22]

10.16 National Legal Aid further suggested longitudinal research into the ‘operation and effectiveness of child support agreements’ to assist policy development in this area.^[23]

ALRC’s views

10.17 The ALRC does not propose any reforms to the legislative provisions regarding child support agreements given the absence of feedback that the existing safeguards are inadequate in protecting victims of family violence from disadvantageous agreements.

10.18 While victims of family violence may come under pressure to enter into child support agreements, the existing legislative safeguards appear to protect them from financial disadvantage as a result of the agreement. The additional safeguard suggested by the Sole Parents’ Union is similar to the existing legislative requirement in relation to binding child support agreements.

10.19 It is neither possible—nor desirable—to mandate a client’s disclosure of family violence to a legal practitioner in the context of child support agreements, or otherwise. Clients may, however, be more likely to disclose information to practitioners who are aware of, and sensitive to, family violence issues. Clients may also be more likely to disclose where a practitioner specifically raises family violence—perhaps in response to a checklist prompt.

10.20 Relevantly, a number of recommendations in Family Violence—A National Legal Response addressed family violence training for legal practitioners.^[24] The AVERT Family Violence: Collaborative Responses in the Family Law System training package also caters for professionals in the legal system, including legal practitioners. In Chapter 4, the ALRC makes proposals regarding training.^[25]

10.21 Concerns about complicated procedures for ending limited child support agreements, as noted by the Ombudsman, may be problematic for CSA customers, including victims of family violence. However, this issue falls outside the ‘safety lens’, and reforms to address it are beyond the reference of this Inquiry.