Child Support After Separation – Pitfalls of Documentation of an Agreement

06/04/2015

Following separation the children of the relationship need financial provision.  Generally the parent with whom the child or children live most of the time receives child support.  The parent who has lesser time usually pays the child support.  Child support is separate from spousal maintenance payable by the husband to the wife or the wife to the husband.

The parents of children can agree between themselves as to the child support arrangements.  The Child Support Agency on its website has a calculator which assists parents to calculate a figure to be used as a guide for payment or receipt of child support –see our earlier article as to the different matters that are considered in assessing the appropriate child support.

Caution is required as to the documentation of any arrangement as there are different consequences and procedures to vary any such arrangements, depending on the documentation or otherwise of those arrangements.

Richard Watson and Dennis Grant advise regularly on the pitfalls of the incorrect documentation as it may affect you on an ongoing basis in particular in the event a significant change of circumstances.  You cannot assume that your or your partner’s or ex-partners financial circumstances will remain the same.  Often it doesn’t.

Agreements reached between the parents of the child can be informal arrangements for payment or can be formal written agreements known as Child Support Agreements.  The Child Support Agreements can bind the parties.  Changing those arrangements are difficult and if there is no agreement as to a change it would require an application to the Court. 

No one can force you to sign a Child Support Agreement.  Often the informal arrangement for payment is the appropriate documentation to be given to any arrangement that is set outside the Child Support Agency Assessment or Court Orders.  Child support is separate from spousal maintenance that may be payable in certain circumstances.

It is important to know that under the Child Support Assessment regime there is an assessment of money payable by one party to another which is payable and there is no control by the paying parent as to how the funds are spent.

On the other hand if there is agreement between the parents whether documented informally or formally, agreement can be reached as to particular payments which are to be made by one parent for particular items and expenses for children, for example, school fees, medical costs, special needs.

It is critical that one considers not only how much and to whom child support is paid but how it is to be documented. 

Recently Dennis Grant received instructions from a father paying large amounts for his children’s support which the parents had agreed to.  This was documented by the parents on the basis of advice from former solicitors by way of a Binding Child Support Agreement.  The father had fallen on hard times losing his employment which had a large six figure salary.  The original solicitor documenting the arrangement had given no consideration to such an event (that the father may not continue to earn the high salary) and the Child Support Agreement remained binding.  There was a possibility due to the exceptional circumstances that the Court would vary the Child Support Agreement.  However through negotiations sensible alternatives were given and child support was re-agreed the appropriate child support payable in light of the facts that applied at that time. 

At Watson & Watson we advise in relation to not only the appropriate amounts to be paid and by whom but the appropriate documentation.  Do not forget that there is no obligation to sign a Child Support Agreement.  There are many benefits in particular for high income earners to agree for child support outside the Child Support Agency regime, however, there are many pitfalls from documenting such by way of a Child Support Agreement.  That said, Watson & Watson have extensive experience in drafting Child Support Agreements to cover particular needs of children and their family and arrangements that vary having regard to changes in circumstances and, in particular, unexpected catastrophic changes that may occur resulting in significant loss of income.  We also recommend that persons who are able to financially manage consider appropriate insurance by way of income protection or associated insurance.  This is one of the many considerations given to the assessment and documentation of the appropriate arrangements to provide child support for families following separation, divorce, property settlement and associated issues. 

Before committing yourself to documentation for either child support or any other arrangements following separation seek advice from Richard Watson or Dennis Grant of Watson & Watson.

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