A Binding Child Support Agreement can be a great way to document your and your partner’s agreement about how you’ll financially contribute towards the cost of raising your child.
Because a Binding Child Support Agreement is legally binding and enforceable, it’s important to understand some of the consequences in signing one before you commit to making your child support agreement official this way.
Advantages
- Legally binding and enforceable, which means you and the other parent must comply with it, and there can be consequences if someone doesn’t pay what they’re supposed to pay
- Lasts until your child turns 18 (or finishes Year 12 – depends on what your agreement says), which means you and your partner don’t have to revisit child support on a regular basis
- If periodic child support is being paid as assessed, then the assessment will fluctuate, which could be better for you if your child’s care arrangements change or there’s a change in your or your partner’s incomes or circumstances requiring you to pay less or receive more periodic child support
- It can deal with both periodic and non-periodic child support, which means you don’t have to have ongoing back and forth conversations with your partner about payment of ad hoc expenses for your child
- You and your partner must get independent legal advice before you can sign the Binding Child Support Agreement, which means you’re both fully informed and entering into the agreement with your eyes wide open
- The drafting may be very advantageous to you regarding your and your partner’s obligations and commitments, as well as the mechanics of how you’ll carry out the agreement, that is the payment of expenses and the like
Emotionally, you’ve got some clarity and peace of mind about your financial commitments and obligations to your child, and what you can expect from your partner moving forward. Consequently, you may end up having more financial autonomy and an overall better relationship with your partner because you’ve sorted this aspect of your separation on a final basis.
Disadvantages
- You are legally bound to comply with your obligations under the Binding Child Support Agreement, and there can be consequences for not paying what you’re supposed to
- You can’t vary or amend the Binding Child Support Agreement, which means if you and your partner want to do something different, you have to terminate the existing Binding Child Support Agreement and replace it with another, or do something different
- Being that it’ll last until your child turns 18 years (or finishes Year 12, depending on what your agreement says), you’re committing to a longer-term arrangement and the future isn’t certain
- If periodic child support is being paid as assessed, then the assessment will fluctuate, which could be worse for you if your child’s care arrangements change or there’s a change in your or your partner’s incomes or circumstances, requiring you to pay more or receive less periodic child support
- If the agreement does not deal comprehensively and sufficiently with potential what-if scenarios (such as disability, illness, job loss, war, pandemic, etc), then you could find yourself bound to pay child support despite not having the capacity to meet your obligations
- If you’re looking to obtain a bank loan, often lenders will want to know your obligations to supporting any dependent children. A Binding Child Support Agreement could therefore negatively impact the amount that a lender is willing to loan you because of your commitments to your child. Similarly, if you’ve waived your entitlement to child support, this could negatively impact the amount a lender is willing to loan you because of your commitments to your child.
It’s crucial that you truly understand the consequences of a Binding Child Support Agreement before committing yourself or your partner to it.