The Legal Practitioner's Guide

5.2 (c) Lump sums plus a fixed periodic amount

An order or agreement can provide for the payment of a lump sum combined with a periodic amount.

Court order

• That pursuant to section 117 of the Child Support (Assessment) Act 1989, there be a departure from the administrative assessment of child support payable by [Parent A's name] to [Parent B's name] for the child(ren) [child(ren)'s names] as follows:

• For the period from [start date] to [end date] the annual rate of child support be set at $x per child.

• That pursuant to section 123A of the Child Support (Assessment) Act 1989 [Parent A's name] provide child support to [Parent B's name] for the child(ren) [child(ren)'s names] by way of a lump sum payment of $x. This amount is to be credited against the administrative assessment(s) of child support and:

• From [start date], the lump sum child support is to be credited as [x% (100% or some other specified percentage)] of the annual rate of child support payable, until the lump sum is exhausted.

Child support agreement (agreements containing lump sum provisions must be binding)

• [Parent A's name] and [Parent B's name] agree that [Parent A's name] will pay child support to [Parent B's name] of $x per month/annually for [child 1's name] and $y per month/annually for [child 2's name] for the period from [start date] to [end date].

• [Parent A's name] will provide child support to [Parent B's name] for the child(ren) [child(ren)'s names] by way of lump sum payment of $x. This amount is to be credited against the administrative assessment(s) of child support and:

• From [start date], the lump sum child support is to be credited as [x% (100% or some other specified percentage)] of the annual rate of child support payable, until the lump sum is exhausted.
  Note: if the lump sum is to be credited at less than 100% of the assessed liability, the balance will need to be paid on a monthly basis or in a manner agreed by the parties if the case is private collect.

Tips and problems

Credit clauses
Lump sum orders must, and agreements may, specify the percentage of the administrative assessment the lump sum is to be credited against (sections 84(8) and 123A(3)(b)).

Note: If no percentage is specified in an agreement the lump sum will be credited at 100% of the amounts payable.

The amount to be credited against the child support assessment cannot reduce the assessment below nil (section 69A(2)(b) of Registration & Collection Act). On or after 1 January each calendar year, the remaining lump sum amount will be indexed with a CPI factor (section 69A(5)).

Note: at the end of a liability (eg. the child turns 18) any 'unused' lump sum amount is not a credit and CSA cannot refund that amount. The parties may wish to include a clause to address this possible eventuality in their order or agreement.

When the payee receives Family Tax Benefit
Generally, where the payee receives Family Tax Benefit (Part A) (FTB) at more than the base rate, and the parents make an agreement about the child support to be paid, then the payee's FTB will be assessed on the notional amount of child support that would have been paid if the agreement had not been made (see chapter 2.3).

The court must consider social security implications before it makes the order (section 123A). The Family Assistance Office can advise the payee how a child support agreement will affect his or her Family Tax Benefit entitlement. More information is available from or 136 150 or www.familyassist.gov.au.

Print this page Top of page