Child Support Agency changes
The new Child Maintenance calculations have been gradually being rolled out since December 2012. From 25 November 2013 the new Child Maintenance Service applies for all new child maintenance calculations.
Over the coming months parents with existing Child Maintenance assessments will receive a letter from the Child Support Agency confirming that their case is being closed and advising them to either enter into a private agreement (Family Based Arrangement) or instead to make a fresh application under the new Child Maintenance rules, which will incur charges.
It is suggested that by 2017 all child maintenance assessments will be dealt with by the new regulations.
Unlike previous methods of calculation, the new scheme is based on the non-resident parent’s gross earned income, less pension contributions and information is gathered from the HMRC for the historic tax year.
There are five rates of maintenance and deductions are made for shared care arrangements. The grounds for applying to vary an assessment have been restricted. Child maintenance will now be due to be paid until a child’s 20th birthday if the child remains eligible for child benefit during that period.
In due course it is anticipated that there will be an application fee of around £20 for all new child maintenance service applications and that there will be a 20% collection charge levied against the paying parent, and a 4% charge levied against the parent receiving the maintenance. There will also be charges applied for enforcing maintenance assessments.
They will obviously create a significant incentive on people to negotiate family based arrangements between themselves where possible. Family Based arrangements are not limited to direct financial payments and can include provisions such as school uniform provision.
However, a Family Based Arrangement is an agreement outside of the statutory scheme and is unregulated. There are concerns as to how parents will enforce these agreements and any arrears that may be outstanding.
If you receive a letter from the CSA ensure you act quickly to avoid a break in maintenance payments or a new assessment, and incurring charges if these can be avoided by entering into a Family Based Arrangement.