Posted on 22.4.14
The new Child Maintenance Service (CMS) has been created to deal with new applications for child maintenance. Although existing cases will still be maintained under the previous CSA (Child Support Agency) scheme, the CSA is now closed to new applications.
The new scheme puts more pressure on separated parents to reach a voluntary agreement. Whilst this may be achievable in some cases, realistically there will be many cases where it is not possible. The CMS’ focus on parties reaching a private agreement without recourse to the scheme, is no doubt a bid by the Government to cut the cost of running such a scheme. The cost of running the CSA was reputed to be £420 million per year. However where private agreement is not possible it is still possible to ask the CMS to assess child maintenance. In very broad terms this is now based on a percentage of the paying parent’s gross income (less pension contributions). This contrasts with the previous scheme which was based on net income. For earnings up to £800 per week the calculation will be 12% income for 1 child, 16% for 2 children and 19% for 3 children or more. Any excess income over £800 per week will be assessed at 9% for 1 child, 12% for 2 and 15% for 3 or more.
As under the previous scheme there will be a reduction in maintenance to reflect other children in the paying parent’s care, and a reduction for regular overnight stays the paying parent has with the child/ren for whom maintenance is being paid.
An application fee of £20 will be charged by the CMS to use their service and they intend to introduce a charge for collecting child maintenance payable by both parents and assessed as a percentage of the maintenance to be collected.
Where child maintenance is agreed as part of a financial settlement on divorce, it can be included in the order made by the court to give both parties some certainty as to the amount to be paid.
Some changes then in how child maintenance will be calculated in the future under the new CMS. There have been frustrations from both the payers and recipients of child maintenance with how the CSA was administered in the past. It remains to be seen whether the CMS will prove to be a better system.