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Potential change to the Child Maintenance Calculations

Posted on Friday, 17th May 2013 by

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In December 2012 the Child Support Agency introduced a new regime for calculating child maintenance. This has only been used on a small pilot group to date but, if successful, it is expected to become wide spread.

At present child maintenance is calculated based on the non-resident parent’s (parent who does not live with the child) net income. The non-resident parent will either pay 15, 20 or 25% of their net monthly income depending on whether they have 1, 2 or 3 children. (If the non-resident parents earns between £800.00 and £2,000.00 a week they will be subject to an increase per child)

The new scheme proposes to base the child maintenance calculation on the non-resident parent’s gross income. It is proposed the non-resident parent will pay 12, 16 or 19% of their monthly gross income. (If the non-resident parents earns between £800.00 and £3,000.00 a week they will be subject to an increase per child). It is proposed that this income will be sought from HMRC, whether for an employed person it is the PAYE calculation or for a self employed person it is the self-employed tax return. This scheme may be introduced as it will save the government money, HMRC and the CSA can now work together, and the CSA will no longer have to do any long calculations.

In practical terms what will this mean?

  1. There will likely be an increase of payment by the non-resident parent between £7.00 – £10.00 per week (if they earn less than £800.00 a week).
  1.  There will likely be a decrease of payment by the non-resident parent if they earn more than £800.00 a week.
  1. If the non-resident parent earns less than £100.00 a week the flat rate has risen from £5.00 to £7.00.
  1. Students will no longer be eligible for the flat rate but will be assessed on their income.
  1. The discount which you receive for having another relevant child in your household (child with a new partner or step child) is reduced.
  1. There will still be a reduction for the number of nights spent in the care of the non-resident parent.
  1. You will now be able to claim a reduction if you spend more than £10.00 travelling for contact.
  1. Due to the fact that the CSA will be taking the income from HMRC there will no longer be discretion to go behind the figures given to HMRC is a self employed person is living a lifestyle inconsistent with their income. Therefore if the non-resident parent is self employed you may wish to make a claim to the CSA now before the new rules come in.

If you have any questions do not hesitate to contact the family team here at Edward Hands and Lewis.

Faye Remnant is part of our Family Law team based in Loughborough; our Solicitors in Loughborough are experts in their fields and dedicated to quality client care. If you would like to find out more about our solicitors in Loughborough please contact us.

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The information provided in all of our blogs reflects only a narrative of some elements to consider on the topic. The blogs do not contain considered legal advice and should not be relied upon as advice. Please see our website terms and conditions for full details of our disclaimer. If you are interested in obtaining advice, please contact one of our lawyers who will be happy and able to advise you on your own particular circumstances.

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