The Department for Work and Pensions (DWP) is now responsible for the child maintenance system in the UK. It funds information and support for separating parents and runs the child maintenance schemes. As of the beginning of 2014, all CSA maintenance cases will be closed or transferred to the new Child Maintenance Service (CMS).
The government is keen for families to make their own private arrangements for child support, however, if they cannot, there are other options.
- The CMS can provide something known as ‘Direct Pay’. The CMS will work out payment amounts due but will not get involved in collection or enforcement. This can be a good option for parents who cannot agree how much payment should be.
- The CMS can get involved in enforcing the payments. This cannot be set up within 12 months of a consent order. There is a fee of £20 to use this service.
- CM Options is another service provided by CMS to give information and support to parents to help them decide what to do about child support.
Child maintenance calculator
This calculator (available on the CM options website) can give you an idea of how much you can expect to receive or pay in child maintenance.
The formula for working out payments
(Gross income is defined as before tax and NI deductions, but after pension contributions have been taken)
Gross weekly income up to £800 – BASIC RATE applies
One child 12%
Two children 16%
Three or more children 19%
Gross weekly income £800-£3,000 – BASIC PLUS applies to the excess over £800
(£3,000 is the highest gross that will be taken into account)
One child 9%
Two children 12%
Three or more children 15%
For example: Andy has three children and has a gross weekly income of £1,200 after pension deductions. To calculate child support he would have to use the basic plus rate.
Andy will pay 19% of £800 = £152. He will also have to pay 15% of £400 = £60. Total £212
Default maintenance position
If parents cannot agree on how much maintenance should be paid, the paying parent might have to pay a default rate based on the number of children, until the CMS has the information required.
One child £39 a week
Two children £51 a week
Three or more children £64 a week
Note that the age limit of the ‘child’ has decreased to 20 from 19, provided the ‘child’ is eligible for child benefit
Second family children
Second family children living with the non-resident parent (NRP) are referred to as 'relevant other children'. The number of 'relevant other children' in the household reduce the gross weekly income of the NRP by a percentage as follows:
For one 'relevant other child' reduce gross weekly income by 11%; for two relevant other children reduce gross weekly income by 14%; and for three or more relevant other children reduce gross weekly income by 16%.
For example: Peter earns gross £500 a week, after deduction of pension. He has two children not living with him by his ex-wife and one child by his new partner. To calculate child support, deduct £55 (11% of his gross income). This leaves a balance of £445. For the two children not living with him, he pays 16% of the balance (£71.20).
Reduced rate for gross income between £100 and £200 a week
The amount of maintenance to be paid is worked out as a flat rate of £10 in the first £100 of gross income, plus a percentage of the gross weekly income over £100. The percentage varies according to the number of qualifying and relevant other children, to ensure that liabilities increase smoothly as gross income increases from £100 to £200.
Parents on benefits will pay a flat rate of £10 a week.
If parents share care of their children, the amount of maintenance to be paid by the non-resident parent can be reduced to reflect this. If there is to be shared care arrangement and the number of nights spent with the non-resident parent is one, a deduction of one-seventh will be made. If two nights each week are spent with the non-resident parent, a deduction of two-sevenths will be made.
For example: Chris has one child with his ex-wife who does not live with him. He earns £450 gross per week, after deduction of pension. His daughter, Amy, spends one night a week with him. He is liable to pay 12% (£54 a week) less one-seventh (£7.70) so Chris will pay £46.30 a week.
Families dutifully doing what the government wants and making their own arrangements for child maintenance might leave mothers, in particular, hard-pushed to take on a mortgage for the former marital home. Some mortgage providers won't take child support into account at all, and others currently demand a court-order as evidence of income. But a family which has followed the government's advice on making their own arrangements won't have a court order, so there are fewer mortgage options to choose from.
We've already seen legal aid withdrawn from matrimonial cases to encourage separating couples to use mediation instead and come to mutual agreements. Until finance and mortgage providers recognise that this is, or will be, the new norm there's still a disincentive to proper co-operation away from the courts.
Blog provided by Frances Place of Bristol-based Progressive Mediation.