One major issue of contention that separated parents often face is payment of school fees, particularly when they are private school fees which as at 2017 in South Australia, could get as high as $25,000 per annum per child and up to $50,000 for boarding school.
When you look at putting 2 or 3 children through private schooling that adds up to a very significant amount of money.
How is child support assessed?
In Australia, the Department of Human Services administers child support assessment and if required, collection. There is a formula set by the Child Support (Assessment) Act 1989 to work that out. In fact, there are several formulas to cater for modern day families which commonly have blended families with multiple child support assessments.
The assessment is for what are known as “periodic payments”; namely fortnightly payments of child support from the Payer to the Payee, who generally has the primary care of the children.
Things such as school fees and other extra-curricular activity costs are known as “non-periodic payments”. They are not covered by the child support formula.
"Private school fees in South Australia could get as high as $25,000 per annum per child and up to $50,000 for boarding school."
Further, the Department of Human Services will not collect payments for school fees and other non-periodic payments.
Given the potential cost of items like private school fees, it is extremely important that an agreement is reached as to who will make payment for them, and that this is formerly documented.
You need to be careful about signing enrolment forms and payment arrangements with private schools as they can hold you to them and chase you for the school fees even if you have separately agreed with the other party that they would pay them. We have encountered clients who have been lumped with significant debts to private schools as a consequence of this.
What is a Child Support Agreement?
In situations as outlined above, it’s important that you consider entering into a Child Support Agreement to set out not only what the periodic payment of child support will be, but also in respect of the non-periodic payments such as private school fees.
These agreements can be tailored to your needs and your particular circumstances. The periodic payments can be left as per the administrative assessment made by the Department of Human Services, or can be set at a higher (or lower) rate if required. The agreement can specify exactly what proportion of the private school fees, other extra-curricular activities and also private health will be covered by each party.
What is a Limited Child Support Agreement?
As the names suggest, a limited Child Support Agreement is easier to get out of, for example (not an exhaustive list):
- The parties (without lawyers) can sign a new agreement to say the original one is terminated
- The notional assessment of child support varies by 15% from when the agreement was originally entered into
- 3 years or more pass since the original agreement.
What is a Binding Child Support Agreement?
A Binding Child Support Agreement is much more difficult to get out of and as a consequence each party to the agreement is required to have independent legal advice about the effect of the agreement on their rights, and the advantages and disadvantages of entering into the agreement at the time of entering into the agreement.
Both types of agreements have their advantages and disadvantages and it’a important to obtain expert Family Law advice as to the type of agreement that’s best for you and all your circumstances.
Such expert advice is particularly important as once a Binding Child Support Agreement is entered into. If it’s not drafted property, a party can end up being liable for large amounts of private child support fees that they weren’t expecting, even if their financial circumstances take a turn for the worse.