A Binding Child Support Agreement (BCSA) sets out the agreement between parents as to child support. It is an alternative to having a regular assessment undertaken by the Child Support Agency. A BCSA provides a greater level of certainty to the parties, but is also the most difficult agreement to change. A BCSA cannot be varied and can only be terminated by consent or a court order (where registered with the Child Support Agency).
It is extremely important that a Binding Child Support Agreement not be entered into lightly, and consideration should be given to a range of possible scenarios of what might go wrong in the future. Because of the difficulties in having a Binding Child Support Agreement set aside, you are required to obtain independent legal advice prior to entering into this type of agreement.
The grounds on which a court can set aside a BCSA include:
- Agreement to the BCSA was obtained by fraud;
- The agreement was obtained through duress or unconscionable conduct; or
- Because of exceptional circumstances relating to a party or child that have arisen since the making of the agreement, and the party would suffer hardship if the agreement is not set aside.
If you are unable to agree to set aside the BCSA and you need to commence proceedings, there is a “duty of disclosure” requirement in financial cases before the family law courts. We’ve discussed disclosure requirements in many of our blogs, but this includes documents such as tax returns, bank statements, super statements, etc. Click here to view the Court’s brochure on disclosure requirements.
If you do not make full and frank disclosure of your financial circumstances, it may not be open to the Court to make a finding that the BCSA should be set aside. This is something that has recently been highlighted in an appeal before the Full Court of the Family Court.
In that case, the mother commenced proceedings seeking payment of child support arrears. The father argued that the BCSA should be set aside because, since the making of the BCSA, his income had substantially decreased and he had fathered additional children. The father argued these were “exceptional circumstances” which would cause him to suffer hardship, but he did not provide any financial disclosure to prove his circumstances had changed.
When the matter came before the Court on appeal, the Court was unable to make a finding of “exceptional circumstances” because the father did not provide full and frank disclosure. Accordingly, the matter was referred back to the Court in relation to the mother’s application for enforcement of the child support arrears.
Had the father made full and frank disclosure, it seems likely that the BCSA would have been set aside.
It is an important reminder of both not entering into a BCSA without having regard for changes which might occur in the future, the difficulty in having a BCSA overturned, and the importance of providing full and frank disclosure.