Child Support Agency - All change again
The Government has for some time been planning to implement changes to the child maintenance system that is paid through the Child Support Agency (CSA).
The primary aim of the amendments for the current system is to encourage parents to reach 'family-based arrangements' outside of the CSA (and the court). If this is not possible, a statutory scheme (a child maintenance service) has been put in place, with new rules, that will replace the historical schemes implemented by the CSA.
The CSA currently deal with 1.1 million existing cases under the two previous schemes. Implementation of the new scheme commenced on 10 December 2012, on a piecemeal basis.
From December 2012, a new formula for calculation of child maintenance through the CSA will apply. This formula is based on a percentage of the non-resident parent's gross income.
Initially the new formula will only be applied to families with four or more children, in the hope of resolving any issues and glitches within the system before a full roll-out takes place over the next 12 months. There are a number of significant changes that include:
- The calculation for maintenance is based on a percentage of gross income rather than net pay
- HMRC data will become the first source of income information and be obtained directly from HMRC/employers
- Charges will be made by the CSA for applications, calculations and collection of child maintenance. These charges will be paid by the payer and recipient reducing the amount of overall maintenance likely to be received by the parent with care (compared to that which will be received under a Family Agreement). There will also be enforcement charges levied for enforcing arrears
- Pressure will be put on parents to try and resolve maintenance disputes by agreement instead of involving the CSA
- An annual review will take place, rather than only when requested
- The grounds for variation and special expenses for moving away from the existing formula are changed
- Students will no longer be exempt from paying child maintenance.
The aim is for all cases to fall under the new formula and rules by 2017. The intention for the majority of cases is for the maintenance that is received to not change substantially. However, this is yet to be seen.
In the initial transition stage, it is intended that existing cases will transfer to the new scheme 'in waves' (possibly oldest cases first). There will be a six month notice period given by the CSA of the intention to close an existing case, and then the parents will be given the option of entering into a family-based agreement with the other parent, or in the alternative, having a new CSA assessment made under the new formula (with charges).
If no decision is made, the case will be automatically closed and there will be a delay before a new application can be opened. Therefore, there may be a period in some cases where no maintenance is paid or received by the parent.
International maintenance issues
On 20 December 2012 new rules came in to force that have a far-reaching impact on the way maintenance disputes with international dimensions are dealt with and enforced.
The new rules (and forms prepared by the Permanent Bureau of the Hague Convention) provide global uniformity for establishing and enforcing maintenance payments.
This is a complex and technical area of law that requires specialist legal advice.