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The Government plans to introduce a new system for dealing with child maintenance in England and Wales, by gradually winding down the much criticised Child Support Agency and replacing it, from December 2012, with the Child Maintenance Service (CMS).
Under the new regime, parents will be encouraged to agree proposals for maintenance themselves, and guidance will be provided by the CMS in how to achieve this. The proposals can perhaps be viewed with scepticism as, arguably, parents who are able to agree levels of child maintenance will not necessarily need to use the CMS.
Perhaps most controversially, for those parents who do require the assistance of the CMS (ie if maintenance is not agreed), the agency will charge a fee for their services. It is understood that this fee will be deducted from the child maintenance payment itself, which means that less is available for the child and the parent with whom they live.
Changes under the new regime also include the levels of maintenance payable. Calculations are currently made on the basis of 15% of one's net income being payable for one child, 20% for two and 25% for three or more. Going forward, for those parents earning between £200 and £800 a week, 12% of their income before tax will be payable where they have one child, 15% for two children and 19% for three or more. The threshold for a nil assessment (ie where no maintenance is payable by the non resident parent) is increasing, so that non resident parents need to be earning less than £10 a week (rather than £5) before a nil assessment is made. Finally, the flat rate payments of £5 a week, which are payable when a non resident parent earns less than £100 a week, will increase by 50%, to £10, under the new regime.
In reality, many families continue to ask the Court to make orders for child maintenance rather than using the CSA. One of the reasons for this is because the CSA operates a maximum income threshold (currently £104,000 per annum) when calculating child maintenance and so those parents who know that the non resident parent has an income above this will be advised to request child maintenance orders (or top up orders) from the Court.
Should you need advice in relation to maintenance for your child or in relation to financial provision generally, please contact a member of the family team.
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