In Australia, child support can be arranged in two agreed ways under family law: Binding Child Support Agreements (BCSAs) and Limited Child Support Agreements (LCSAs).
These agreements allow you and the other parent to determine how child support will be paid, giving you flexibility and control over financial arrangements for your child’s well-being.
Each type has different requirements and legal considerations, so it’s important to understand which option best suits your situation.
Understanding Child Support Agreements
When parents separate, they remain responsible for financially supporting their children. While the Department of Human Services (DHS) can assess and manage child support payments, parents can also agree on their own terms through legally recognised agreements.
The Two Agreed Types of Child Support Agreements
- Binding Child Support Agreement (BCSA) – A legally enforceable agreement that requires legal advice for both parents before signing.
- Limited Child Support Agreement (LCSA) – A more flexible arrangement that does not require legal advice but must be based on a formal child support assessment.
Key Takeaway: You can choose between a Binding or Limited Agreement based on your circumstances, the level of flexibility needed, and whether you prefer a legally binding arrangement.
Binding Child Support Agreement (BCSA)
A Binding Child Support Agreement (BCSA) allows you and the other parent to agree on a set amount of child support payments. This amount can be higher or lower than the assessment made by Services Australia. Since this agreement is legally binding, both parents must obtain independent legal advice before signing.
Features of a Binding Child Support Agreement
- Fixed Payments: You and the other parent decide on the amount, which does not need to match government assessments.
- Legally Enforceable: Once signed, the agreement remains in place unless both parents agree to end it or a court sets it aside.
- Legal Advice Required: Each parent must get advice from a lawyer to ensure they understand their rights and obligations.
Who Should Consider a Binding Agreement?
A BCSA may suit you if:
- You want a long-term arrangement with little need for changes.
- You prefer certainty over the amount of child support payments.
- You are confident that both parents will uphold the agreement.
How to End a Binding Agreement
A BCSA cannot be easily changed. You can end it only if:
- Both parents sign a termination agreement.
- A new Binding Child Support Agreement replaces the old one.
- A court cancels the agreement due to hardship or other legal reasons.
Key Takeaway: A Binding Child Support Agreement offers certainty but requires legal advice. Once in place, it’s difficult to change, so you should consider whether it suits your long-term financial situation.
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Limited Child Support Agreement (LCSA)
A Limited Child Support Agreement (LCSA) provides more flexibility while still being legally recognised. Unlike a BCSA, this type of agreement must be based on an official child support assessment from Services Australia.
Features of a Limited Child Support Agreement
- Tied to an Assessment: The agreement must be based on at least the minimum amount from a child support assessment.
- More Flexibility: Unlike a BCSA, a Limited Agreement can be changed or ended more easily.
- No Legal Advice Required: Though it’s recommended, parents are not legally required to seek advice before signing.
Who Should Consider a Limited Agreement?
An LCSA may suit you if:
- You want some flexibility to change the agreement if needed.
- You prefer an arrangement that reflects official child support assessments.
- You don’t want to seek legal advice before entering an agreement.
How to End a Limited Agreement
You can cancel a Limited Child Support Agreement if:
- It has been in place for at least three years.
- Either parent’s circumstances change significantly.
- A new child support assessment is at least 15% different from the original.
Key Takeaway: A Limited Child Support Agreement allows flexibility and does not require legal advice. However, it must align with government-assessed child support amounts.
How to Set Up a Child Support Agreement
If you decide to arrange child support through an agreement rather than government assessments, follow these steps:
- Discuss with the Other Parent – Agree on the terms, including payment amounts and frequency.
- Seek Legal Advice (For BCSA) – If choosing a Binding Agreement, both parents must receive legal advice.
- Obtain a Child Support Assessment (For LCSA) – If opting for a Limited Agreement, Services Australia must provide a child support assessment first.
- Draft and Sign the Agreement – Put the agreed terms in writing and sign the document.
- Register the Agreement with Services Australia – Submit the agreement to ensure it is legally recognised.
Choosing between a Binding Child Support Agreement (BCSA) and a Limited Child Support Agreement (LCSA) depends on your circumstances. If you want a legally binding, long-term agreement, a BCSA may be suitable. If you prefer a more flexible arrangement, an LCSA might be a better option. In either case, understanding your rights and obligations helps ensure the best outcome for your child’s financial support.
