In 2014 the Child Support Agency began closing any claims or cases under their 1993 and 2003 schemes, with the intention that by 2018 all claims would be managed under one single scheme of calculation by the Child Maintenance Service (CMS).
Under the new scheme separated parents are encouraged to reach their own ‘family based arrangement’. This means that they are free to agree an arrangement tailored to their individual family circumstances that can be flexible and free from the intervention of anyone else.
If, however, parents are unable to reach an agreement they are encouraged to try mediation as a way to resolve matters. Mediation is a process whereby both parents will be invited to attend before an independent, legally qualified person who will guide and aid them in reaching a fair and reasonable arrangement.
As a last resort a ‘receiving parent’ can apply to the Child Maintenance Service for it to decide how much the ‘paying parent’ should pay.
The Child Maintenance Service can do the following:
once a calculation has been made, collect child maintenance and pay it forward to the receiving parent;
resolve disputes as to parentage;
find the whereabouts of a paying parent;
take action to ensure payments are made;
review a calculation when circumstances have changed. Any calculation is reviewed every 12 months in any event.
Fees and charges
It is important to know that parents can chose to arrange payment directly between them once a calculation is made by the CMS. The CMS, unlike the CSA, now charges a £20 application fee and then a 20% fee on top of the maintenance to the paying parent to collect the maintenance and a 4% fee to the receiving parent from their maintenance for providing it to them.
When calculating, the CMS takes into account the following:
Paying parents income
Number of children who need maintenance
How often those children stay overnight with the paying parent
If there are any other children that the paying parent or their partner get child benefit for
If the paying parent pays maintenance for other children
Who can claim?
A claim can be made if the receiving parent has the main day-to-day care of the child and lives in the UK with the child (children living in boarding schools and hospitalised long term also qualify); no court order is in place before 2003 for child maintenance; and the child is either under 16 or between 16 and 20 and undertaking full time secondary education or registered with certain types of government training courses and child benefit is still being paid.
Rates and Income
The rate that child maintenance is paid at depends on a paying parent’s gross weekly income. There are 5 different rates, which can be found on direct.gov.uk.
Gross income is the money you earn before Income Tax and National Insurance is deducted. However, the figure used is net of pension contributions (personal and occupational schemes).
Income includes earnings from both employed and self employed income; payments from a pension; and taxable benefits such as contribution based Jobseekers Allowance or contribution based Employment and Support Allowance.
*Tip for the paying parent
The CMS won’t automatically take into account pension contributions paid by you when an employer provides details of your income to the HMRC. Be sure to let the CMS know this information either before the calculation is made or by asking them to review a previous calculation.
*Tip for the receiving parent
Taxable unearned income such as interest from savings and also dividends are classed as income and will not be taken into account by the CMS unless the information is provided and the CMS is asked to vary the calculation.
The CMS won’t be able to help if:
The paying parent’s gross income exceeds £3000 per week (anything above that threshold will be ignored)
The paying parent lives abroad
There is a dispute as to the payment of school fees
A child has special needs
A child is beyond secondary education but still in need of financial help
An application can be made to the Court to make a child maintenance decision and calculation where the CMS cannot help.
We at Farleys specialise in dealing with these types of applications to the Court. If you require further help and advice in relation to child maintenance or assistance with an application to the court, please contact us. Call 0845 287 0939 or email us.