Child Maintenance changes – what you need to know

On behalf of Attwaters Jameson Hill posted in Uncategorised on Thursday, August 14th, 2014

The Child Support Agency has been in existence for nearly 20 years now and it has undergone many changes in that time.  There have been lots of well publicised problems.  Some more changes are coming and if you are in the process of separating or are already separated then there are several things that you need to know in order to make a decision about how you and your former partner/spouse deal with child maintenance.

For people already using the CSA there will be a gradual transition the new rules and all existing cases will be transferred by 2017 at the latest.  The oldest existing cases will be closed first.

For people new to the CSA, you may be offered the chance to use the new system.  The new system is not yet compulsory and at the moment it is open to a few people as it is phased in gradually.

When you contact Child Maintenance Options you will be given information about your choice of solutions to deal with child maintenance.  The best option is to resolve matters directly with the other parent. This called a family based arrangement and is an informal arrangement for the payment of child maintenance.  If you set up this sort of arrangement then there are no fees involved.  If you are divorcing then your solicitor may able to help you incorporate this agreement into a court order which is binding on you both for the future.  Without a court order this arrangement is not binding.  Even with a court order in place, it is possible for one party to “opt out” of the court order and go to the CSA.  This can cause problems if you have agreed an amount higher than the CSA assessment and your solicitor can discuss with you what you can do in these circumstances.

If you want to use the CSA then you will be asked to pay a £20 fee initially.  You can then choose from one of two options.

The first option is to ask the Child Support Agency to calculate how much the other parent should pay and then set up a direct arrangement between you.  This is called the direct pay service.  The CSA will contact the other parent and inform them of the amount and the rest is up to you.

The other service is a collection service where the CSA collect and enforce child maintenance for you.  There are fees involved with this service.  A percentage is added to the amount that the paying parent pays in and a different percentage is deducted from the amount received by the receiving parent.

The choice of which CSA service to use lies solely with the paying parent – the parent who will receive the child maintenance has no say in the decision at this stage.

Because of the fees involved with the collection service, it seems likely that most paying parents will choose the direct pay service.  If the paying parent then doesn’t make voluntary payments then the receiving parent can ask for the case to be transferred to the collection service.

There is a reduced rate for paying parents who earn £100 – £200 per week and a flat rate of £7 per week for parents who receive benefits. For parents earning between £200 and £2000 per week, they will have to pay a percentage of their gross income.  There are allowances for child staying overnight and certain other expenses. (If the paying parent earns more than £2000 per week gross then the receiving parent can apply to the court for a top up.)

This is a change from the old formula which was based on net income.  The CSA will now get the information direct from HMRC rather than relying on the parent to provide the information which should speed the process up – it should now take about four weeks for a calculation to be made rather than the old timescale of at least 12 weeks.

For paying parents earning less than £800 per week they will have to pay 12% for one child, 16% for two children and 19% for three or more children.  There is an additional formula for earnings over £800 per week.

If a paying parent does not pay then under the new rules the CSA will impose charges for any enforcement action taken.

If you are unsure what to do, you can discuss your options with one of our specialist family solicitors who will be able to discuss the advantages and disadvantages of each choice and to help you make the right decision for you. We offer a fixed fee interview scheme so that you know exactly how much you will be paying for our advice. Call us on 0208 508 2111 for more details

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