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Expert guidance on maintenance agreements, trusts, and assessments
"Child maintenance" and "child support" are terms that many Australians use interchangeably — and for good reason. Before the Child Support Scheme began in 1988, Australian courts used "maintenance" to describe financial contributions by a non-custodial parent. The new legislation adopted "child support" as the official term, but "maintenance" persists in everyday language and in several specific legal contexts.
If you've arrived from the UK, New Zealand, or another country, you're probably used to the term "child maintenance." The Australian system works differently from the UK's Child Maintenance Service, but the underlying concept is the same: ensuring both parents contribute financially to raising their children.
One area where "maintenance" retains specific legal significance in Australia is the child maintenance trust — a tax-planning structure that, when properly established, can provide significant benefits. This is one of Simon Bacon's particular areas of expertise, as explored across multiple episodes of the Tax Talks podcast.
Understanding the Australian system, whether you call it maintenance or support
A trust structure that allows child support payments to be made into a trust for the child's benefit. When properly set up, payments are credited against the child support assessment. Significant tax advantages are possible — but the trust must meet strict legal requirements. Simon has covered this in detail on Tax Talks.
Payments made directly to the other parent or to third parties (school fees, medical costs, housing) rather than through Services Australia. These can be credited against your child support assessment — but only if properly documented and within the rules. A common source of disputes.
A one-off payment to settle child support obligations for a period or permanently. Can provide certainty for both parties but must be structured carefully — through a binding agreement or court order — to avoid being treated as a gift rather than child support.
A formal agreement between parents that can set child support above or below the formula amount. Both parties must receive independent legal advice. Once registered with Services Australia, it replaces the formula assessment. Critical to get right — poorly drafted agreements can be challenged.
A simpler alternative to a binding agreement — must provide at least the assessed amount, doesn't require legal advice (though it's recommended). Can include provisions for non-agency payments and specific arrangements for school fees, medical costs, and other expenses.
Most of these matters — trusts, agreements, non-agency payments — involve administrative processes, not court. A specialist advisory service provides the same expertise as a law firm at typically one-third the cost, because you're paying for knowledge, not courtroom access.
Simon's expertise at the intersection of tax and child maintenance
In Australia, "child support" is the official legal term since the 1988 Child Support Scheme. "Child maintenance" was the older term and is still used in the UK. They refer to the same thing. The exception is "child maintenance trust," which has specific legal meaning in Australian tax law.
A maintenance trust holds child support payments in trust for the child's benefit. When properly structured, payments are credited against your assessment and can offer tax advantages. Whether it's appropriate depends on your specific circumstances — the amounts involved, the ages of children, and the other parent's agreement. This is an area where specialist advice is essential.
For a binding agreement, both parties must receive independent legal advice — that's a legal requirement. However, a specialist consultant can draft the agreement, explain the implications, and prepare you before you seek the required legal sign-off. This is more cost-effective than having a lawyer draft the agreement from scratch at $400–$700/hr.
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