Child maintenance – a sense of déjà vu
A recent headline in the The Times stated: "Absent fathers owe new agency £43m". It reported that the Child Maintenance System (CMS), which only came into being at the end of 2013, has built up arrears of £43.5m. Its predecessor, the Child Support Agency (CSA), was set up following a decision made by Parliament in 1991 to take away the area of child maintenance from the family courts and put it into the hands of a new government body, the CSA. Since 1991 the family courts have therefore retained only a limited jurisdiction when it comes to child maintenance, such as providing for children with special needs and step-children.
By 2006, the CSA had already been described as being in “meltdown”, declared a “fiasco” and described as a “shambles”. The Times reported that the CSA had failed to collect over £3 billion owed. It seems that history may be repeating itself with this latest press release about the CMS.
CSA cases are now planned to be transferred across to the CMS by 2017 and many of my clients have been contacted regarding their cases. The CSA is still in existence therefore in this transition period.
Charges for services
The good thing about the CSA was that it was free to use. Since 30 June 2014, however, charges have been introduced for using the government service. There is now a £20 application fee for the vast majority of applicants. There will also be a 20% collection charge for non-resident parents on top of their calculation and a 4% charge on payments for parents with care of the child. These ongoing charges can be avoided if parents opt for Direct Pay, where parents pay each-other directly at arms-length from the CMS. If payments stop, the CMS will step in and enforce payments.
How maintenance is calculated
The CMS uses a different formulae for calculating child maintenance based on the non-resident parent's .gross income, whereas the CSA used to base its calculations on net income. The formulae are now more complicated but people can still use the online calculator to work out what should be paid.
If you would like to know more about child maintenance arrangements and how Blake Morgan can assist separating families, please contact me or another member of the family team for further advice and information.