Rogers & Norton News
Changes to Child Maintenance
Its official…the long awaited changes to the way we pay child maintenance have arrived. All new applicants to the Child Maintenance Service or ‘CMS’ with effect from 30th June 2013 will be charged a one off application fee of £20. Except where the applicant is a victim of domestic violence, resides in Northern Ireland or is aged under 19 years.
More importantly from 11th August 2014 collection charges will apply to both parties where they use the Child Maintenance Service to collect payment. The paying parent will be charged an additional 20% in addition to the amount assessed to pay and the receiving parent will pay 4% from the monies received.
You will not be charged where you opt for Direct Payment.
For existing cases they are being notified from now until 2017 and have 6 months to opt for Direct Payment or put a new arrangement in place. Arrears need to be cleared before Direct Payment can be put into place.
The Current Calculations…
Gross weekly income up to £800 (after pension contributions deducted):
One child: 12%
Two children: 16%
Three or more children: 19%
Gross weekly income of £800-£3,000 (after pension contributions deducted:
One child: 9%
Two children: 12%
Three or more children: 15%
There will be a new income cap of £156,000 per annum and any income above this level will be ignored. Pension contributions may be deducted from the gross income figure before the formula is run.
The reduced, flat and nil rates apply where weekly income falls before £200 a week, with different rules applying.
How do other children affect the calculation?
Second children who live with the non-resident parent and for whom they or their partner receive child benefit, are referred to as “relevant other children.” The allowances made for these children have been reduced overall to achieve greater fairness. The percentage reduction for second family children is as follows:
One relevant child: 11%
Two relevant children: 14%
Three or more relevant children: 16%
For other children who live outside the Non-resident parent’s existing family unit where payment is subject to a CMS imposed calculation, the liability will be apportioned per child. So if there are two children overall the relevant sum will be calculated and the amount will be shared between the two children.
If the Non-resident parent pays child support by agreement or via a court order but is subsequently subject to a child support assessment then the assessment will again apportion the amount payable overall per child notionally and the child subject to assessment will receive their share but the child who receives theirs by agreement will continue to receive the sum agreed.
Deductions will still apply on the 1/7th rule according to nights per annum that a child stays with a non-resident parent. If care is shared equally then neither parent will be entitled to child support.
Previously, a non-resident parent only had to pay maintenance until the age of 19. However since December 2012 this has been revised to 20 in line with current child benefit limits for children continuing in full time education. This part of the enactment is retrospective.
Clearly, these subtle changes are likely to have a significant impact on how people negotiate and conclude their financial arrangements upon the breakdown of their relationship.
Should you have any further questions concerning this topic please contact Kerry Rowell 01603 675666 or firstname.lastname@example.org.