Child Maintenance

 

 

UPDATE ON THE INTRODUCTION OF CHARGES AND CASE CLOSURE

There has been a lot of media coverage today (21/05/2014) about the child maintenance system changing, and letters that have been sent out to some parents. The letters have been sent out to parents already on the Child Maintenance Service 2012 scheme, to remind them that charges will soon be introduced for the Collect & Pay service.  Parents are encouraged to either make a family-based arrangement or move to Direct Pay to avoid the charges.

Application and collection fees will not affect CSA cases on the 1993 or 2003 scheme, now or in the future and letters will not be sent to you about this.

The introduction of charges on the 2012 maintenance scheme is separate from the process of CSA case closure, which will take place for existing CSA cases over the next few years. You will receive a letter 6 months before your case is due to end, informing you that you will need to make new arrangements (either privately through a family-based arrangement, or with a new application to the Child Maintenance Service). It is important to remember that even though your case with the CSA will be closed, you still have a legal duty to pay child maintenance.

If CSA clients make an application to the Child Maintenance Service there will be a £20 application fee for any new application made to the Child Maintenance Service.  Parents will then have 2 choices, they can use Direct Pay or Collect & Pay.

You can avoid the collection charges by choosing Direct Pay.  Where there is no reason for the Child Maintenance Service to think the paying parent is unlikely to pay, the receiving parent cannot insist on the case being put into the Collect & Pay Service and incur the collection fees (the system that will charge for collecting and delivering money between the parents).

For more information and support, please contact our support services.

 

What is child maintenance?

Child maintenance is regular financial support that goes towards a child’s upbringing. It is usually money that the parent without the main day-to-day care of a child pays to the other parent.

All parents who do live with their children for the majority of the time have a legal obligation to contribute to their child’s upbringing financially. This can be done in a number of ways, depending on your family’s circumstances.

Maintenance arrangements can often be a source of conflict between separating parents, and it is advisable to put effective arrangements for this in place as soon as you can. Making child maintenance arrangements can remove a potential barrier to parents establishing a good co-parenting relationship after they have split, and help to improve cooperation between parents.


Options Available to Parents


Parents are free to choose the best child maintenance arrangement to suit their family’s needs. These can either be set up privately between the parents (known as ‘family-based arrangements’) or organised through the Child Maintenance Service (known as ‘statutory arrangements’). Depending on a families circumstances some options may be more suitable than others; generally though, a family-based arrangement is the quickest to set up, and offers the greatest flexibility to parents to make arrangements that best suit their particular needs.


Family-Based Arrangements


A family-based arrangement is simply an agreement between both parents about who will provide what for the child. They don’t just have to be about exchanging money – the paying parent could, for example, agree to provide school uniforms.

Family-based arrangements can be quick and easy to sort out because there are no official rules to follow, and no-one else needs to get involved in a family’s arrangements. They can provide a family with the flexibility they need to adapt arrangements to their particular needs. Research has also shown that parents are twice as likely to be happy with a family-based arrangement as they are with a statutory arrangement.

For more information about family-based arrangements and how you could set your own one up, please click here.


Consent Orders and Minutes of Agreement


Consent orders

In England and Wales, a consent order is an order made by a court that makes an agreement between two parties legally binding.  For child maintenance, courts can make a consent order which says that the parent without the main day-to-day care of the child must keep to the child maintenance payments they have agreed, either collaboratively between themselves or through solicitors.

It is usually only the best option if the parents are going to court for other reasons (like arranging a divorce or dividing property or other assets), as putting a consent order in place does involve legal costs.

Minutes of Agreement

In Scotland, parents can register a Minute of Agreement in the Books of Council and Session held by Registers of Scotland.  After they’ve made their family-based arrangement - with a solicitor’s help, if needed – parents can make it a contract called a Minute of Agreement.  They can then register this for preservation and execution to make it legally binding and enforceable.

It’s important to note that parents cannot set up a statutory child maintenance arrangement within 12 months of setting up a consent order or Minute of Agreement, but they can do so after this period.  


Statutory Arrangements (The Child Maintenance Service)


Where parents are unable to make a family-based arrangement work, there are two payment services offered through the Child Maintenance Service.

The Child Maintenance Service is the new statutory child maintenance service. It works out how much, and when, child maintenance should be paid on behalf of some parents in England, Wales and Scotland. It also has the capability, where necessary, to collect child maintenance from one parent and pay it out to the other (eg. by deducting child maintenance at source from earnings or bank accounts). The Child Maintenance Service is open to all new applicants and the Child Support Agency has now stopped taking new applications.

The Child Maintenance Service uses the paying parent’s gross annual income, from the latest available tax year, as the starting point to work out child maintenance.  In most cases, this information is provided to HM Revenue & Customs (HMRC) by the paying parent, their employer or accountant.  This means it can process applications more quickly. It also means the Child Maintenance Service can work out an accurate amount without waiting for the paying parent to provide information.

Every year the Child Maintenance Service will review the paying parent’s income, benefit status and other circumstances.  This will help to work out if the amount of child maintenance they pay for the next 12 months should stay the same, or if it should go up or down.  This is called the Annual Review, and will be done automatically.  It will ensure that maintenance calculations remain fair and accurate.

Parents who are on low incomes or on benefits pay a flat rate of child maintenance.  To reflect the increased costs of bringing up a child, this flat rate has been increased from £5 to £7 for parents using the Child Maintenance Service.  

Unlike in the Child Support Agency, parents who share the day-to-day care of their children exactly equally are not required to pay maintenance to each other if they have a Child Maintenance Service case.  Both parents are required to show evidence that the day-to-day care is shared exactly equally.  
It is mandatory for parents wishing to apply to the Child Maintenance Service to have a conversation with Child Maintenance Options to discuss their choices and consider alternatives before they can proceed with their application.

Direct Pay


This is where the Child Maintenance Service works out the amount of child maintenance a paying parent must pay. Both parents agree between themselves how and when the paying parent will pay the receiving parent direct. The statutory service will not get involved in other areas, like collecting the payments and enforcement, unless a parent asks them to. If a parent wants the Child Maintenance Service to get involved in enforcing payments, then the parent needs to move to a Collect & Pay arrangement.

Direct Pay is often a good option for parents who have trouble agreeing or talking about how much child maintenance payments should be.

Collect & Pay


This is where the Child Maintenance Service works out the amount of child maintenance to be paid, collects payments from the paying parent and passes them on to the receiving parent.

If a parent applies to the Child Support Agency or Child Maintenance Service for this, they will gather information from both parents and use it to work out how much child maintenance the parent without the main day-to-day care of the child will need to pay to the other parent. If payments aren’t made on time, a range of enforcement actions can be taken to collect them.

Later in 2014, the Government plains to introduce fees and charges for use of the Child Maintenance Service (see below).

Charges

The government plans to introduce fees and charges in 2014 for parents who use the Child Maintenance Service.

They want to encourage more parents to work together to arrange child maintenance instead of using the Child Maintenance Service or the courts.

These plans are not yet law but under current proposals there will be:
  • A £20 application fee for any new application
  • A 20% collection fee for paying parents using the Collect & Pay service, on top of their usual amount
  • A 4% collection fee for receiving parents using the Collect & Pay service, deducted from their usual amount
  • A range of enforcement charges for paying parents who fail to pay their child maintenance in full and on time.

There will be no collection fees for parents who work together to agree their own family based arrangement, or use Direct Pay.

Existing Cases

The Child Support Agency no longer accepts new applications and will begin to end child maintenance arrangements on its 1993 and 2003 schemes in 2014. If you are affected, you will get a letter up to six months beforehand, giving you a chance to put a new arrangement in place. Parents will be encouraged to think about making their own family-based arrangement, while those who can’t will be able to apply to the Child Maintenance Service.

Parents will be offered help and support throughout this change to help them make the child maintenance arrangement that’s right for them. We expect it to take about three years to contact every parent and end all CSA arrangements.


Further Information

•    Child Maintenance Options – www.cmoptions.org.uk, 0800 988 0988
•    www.sortingoutseparation.org.uk
•    www.nacsa.co.uk

Page updated: 21/05/2014