Vardags — Leading solicitors for high net worth individuals

Don't forget the 2013 child maintenance changes

A number of important changes to the way child maintenance is calculated came into force on 25 November 2013. Below is a summary of the main changes that could affect you.

The Child Support Agency (CSA) has closed:  The CSA has been replaced by the Child Maintenance Service (CMS). From now on, all applications should be made to the CMS.

Options for parents when making child support arrangements: Family Based Arrangements – private agreements reached between the parents. The CMS will not be involved in this.

Statutory arrangements through the CMS – Parents can approach the CMS free of charge for assistance, in a similar way to the CSA. However, the government has announced that it will be introducing fees for this service from Spring 2014.

Changes to the Calculation: The CMS uses information from HMRC to access the income of the child or children’s non-resident parent. This will be checked every year with HMRC to ensure that the calculation is still correct.

Under the CSA, the calculation was based on net income, with payments being awarded at 15 percent, 20 percent or 25 percent depending on whether there were 1, 2, 3 or more children.

Under the new regime, the calculation will be based on the non-resident parent’s gross weekly income. Once this calculation is made, payments at that level will be fixed for 12 months.

For gross income up to and including £800 per week, child support will be payable at the following rates:

i) 12 percent for one child;

ii) 16 percent for two children; and

iii) 19 percent for three or more children

For gross income of £800 to £3,000 per week, child support is payable at the following rates:

i) 9 percent for one child;

ii) 12 percent for two children; and

iii) 15 percent for three children or more

If the paying parent has their child to stay the night with them, or has other children living with them, deductions will be made.

Any income above £3,000 gross per week is ignored for the purposes of calculating child maintenance with the CMS. However, the resident parent can apply for a ‘top up’ of maintenance, by making an application under Schedule 1 of the Children Act 1989.

At Vardags, we often make these applications on behalf of our clients. Whether or not this new regime will be any different to the CSA remains to be seen.

To read more about child arrangements, click here

If you would like to know more about the issues covered in this article, Vardags offers a free consultation to qualifying individuals.

For high net worth and ultra high net worth individuals or their companies, our confidential enquiry line is staffed 24 hours. Call 020 7404 9390 today.