• New Child Support Scheme extended to applicants with 2 + children

    09.09.13

    The most recent Child Maintenance commencement order extends the rules of the new child support scheme to all new applicants with two or more children with the same parents). As you may remember, the last commencement order introduced the new scheme, but only for new ‘applications made on or after 10th December 2012 which relate to at least four qualifying children’ with the same parents. This more recent order introduces the new rules in respect of cases involving new ‘applications made on or after 29 July 2013 which relate to two or three qualifying children’ with the same parent. (When thinking about what is a ‘new application’ it is worth bearing in mind that any case voluntarily closed in the 13 weeks prior to the new application will be dealt with as an existing case, which means that someone who closes an existing case and then makes a new application won’t be dealt with under the new calculation rules.)

    As a reminder, under the new scheme the assessment of the non-resident parent’s income is based on gross income, not net income, with a corresponding shift in the applicable percentages: for one child a non-resident parent with a gross income of £200 pw or more will usually pay 12% of his or her gross income; for two children 16%; and for three or more children, 19%. However, there is an additional complication in that, in order to take higher tax rates into account, these percentages will apply only to the first £800 of weekly gross income. Lower rates of 9%, 12% or 15% will be applied to any excess above £800 gross per week. Gross income of over £3,000 pw will be disregarded.

    Under the new scheme the child maintenance award will be fixed for one year, unless the non-resident parent’s income varies by more than 25% within the year. To improve the reliability of the information on which assessments are based, and also to reduce the amount of time it takes to obtain an assessment, information as to gross income will be obtained from HM Revenue & Customs’ tax records, rather than requested from the non-resident parent. If for any reason HMRC are unable to provide such information, the calculation will be based on current income.

    The new scheme attempts to encourage parents to agree voluntary arrangements for maintenance by imposing a £20 fee on almost all applications to the Child Maintenance Service. In addition, if the Service has to collect the money from the non-resident parent (the alternative is for the non-resident parent to pay the parent with care directly, without involving the Service), under the new scheme the Service will be able to impose a 20% fee on top of each assessed payment, and to deduct 7% from the maintenance actually paid to the parent with care. These ‘fees’ are an attempt to incentivise parents to make direct payments. The Service will also be able to charge an additional fee to the non-resident parent if enforcement action by the Service proves necessary, at a proposed rate of between £50 and £300 for each enforcement action, depending upon the method of enforcement used.

    [Information taken from Family Mediators Association August 2013 newsletter]

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