The Child Support Agency (CSA) is now to be abolished so here’s what you need to know.
What will replace the CSA?
The CSA will be replaced by the Child Maintenance Service (CMS).
What will change?
This is not only a name change, there are also new rules being implemented too. Under the new rules, the parent who doesn't live with the child will now have to pay a 20 per cent fee on their payments for using the service and the other parent will lose four per cent of the money they receive.
A non-resident parent using the CMS will therefore pay £20 on top of every £100 of child support, while the parent living with the child will only get £96 of that sum.
There will also be a £20 charge levied by the CMS for set-up costs.
When will these changes happen?
Parents who currently use the CSA will receive letters between now and 2017 explaining the changes and when they will be implemented in relation their case. When parents receive these letters they will be told that their case with the CSA will be closed in six months time. Parents will then have the choice to either move over to the CSM or deal with each other directly.
Parents who want to begin using the service will now have to go to the CSM where they will be dealt with under the new rules.
Can I avoid the fees?
Yes. Parents can avoid the charges by agreeing to pay each other directly, bypassing the state-run system. This means that you could either avoid the CSM altogether by agreeing the amount to pay and then paying directly or simply use the CSM to calculate the amount to be paid and then pay directly.
What about existing arrears?
If arrears have built up whilst a case was with the CSA and the parents choose to use the CSM, the arrears will still stand and can be enforced. This will also be the case where parents decide to come to a family-based arrangement.
Are there any changes to how maintenance is calculated?
Yes the formula for calculating maintenance is also changing. For those that earn less than £800 gross weekly income it will be: 12, 16 and 19 per cent gross income for one, two and three or more children respectively. For those earning more than £800 gross weekly income it will be: 12 per cent gross income for the first £800 and nine per cent of the gross income on the remainder, 16 per cent of gross income on the first £800 and 12 per cent of gross income on the remainder for two children and 19 per cent of gross income for the first £800 of gross income and 15 per cent of the gross income on the remainder for three or more children.
Until the changes are implemented the old CSA basis of calculation will continue: 15 per cent of net income for one child, 20 per cent for two children, 25 per cent for three or more children with a cap for net income of £104,000 per annum.
Are the changes a good idea?
There is no doubt changes needed to be made to the CSA and they needed to be drastic. However, the last thing that was needed was for parents to be penalised for using the service; I find that remarkable. That’s not to say that it is not a good idea to encourage separated parents to be amicable with each other but the reality is that on many occasions this is just not possible. Child support should be all about the needs and best interests of the child, not another back door tax for the government.
For more information about the new Child Maintenance Service visit Dean’s website.