Initially, the scheme will apply to all new cases where
there are 4 or more children and will be opened up gradually, with all cases
falling under the new formula from early 2014.
The new formula uses gross income instead of net income,
which has been used for some time to form the basis of the calculations by the
CSA.
It is hoped that in using gross income figures this will
avoid delays and make it easier to establish self-employed income, by using tax
returns and information submitted to HM Revenue & Customs instead of relying
on documentation and information from the parent themselves. It should also
help to make it more difficult for parents to minimise the income assessed in order to reduce their child maintenance liability.
The new formula is to be applied in 2 parts, one for the
first £800 of gross weekly income (12% for one child, 16% for 2 children and
19% for three or more) and the second for any gross weekly income over £800 (9%
for one child, 12% for two children and 15% for three or more). There is a cap
of £3,000 per week gross income, beyond which parents shall have to apply to
the Court.
There will continue to be reductions in maintenance if the
paying parent is financially responsible for other children, is a step parent
to other children in his/her household or to take account of overnight stays.
Controversially, there will be a charge for using the CSA to
assess and collect child maintenance, whereas at the moment this is free. The
charge is likely to come in once the new formula is being applied to all cases.
Consultations on the level of that charge shall end shortly
but some critics say that charges may not be affordable for all parents and
will see money effectively taken from the children it was meant to support.
Existing cases will not be affected until late 2013 but when
they are it will mean that all currently paying parents will be given an
opportunity to establish a direct payment to the other parent (even those
parents who are paying through the CSA at the moment because of their history
of non-payment). The CSA has a direct payment scheme, which would mean that the
paying parent can make their payments direct but without the receiving parent
having to disclose bank details etc.
Failing any agreement or direct payment, a fresh application
will have to be made to the CSA by the parent with care of the children.
Critics of this part of the scheme have suggested that this
may allow perpetrators of domestic violence to manipulate or financially
control their ex-partners by making direct payments but changing the dates or
missing payments, the only other option for the victim to be to apply to the
CSA once again and be charged.
The move to use gross income figures is likely to help with
accurate assessment and enforcement of child maintenance but the proposed
charges may, for many, be an obstacle to obtaining a secure financial
future for their children, which ironically is exactly what the child
maintenance scheme is supposed to achieve.
As with many of these things, the devil is in the detail so
I think we’ll have to wait and see how it all works in practice.
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