Jan 26, 2017

Changes to the Child Support Agency

In December 2012 the Child Support Agency (CSA) began running a new gross income assessment scheme known as CS3.  The aim of CS3 is to simplify the assessment of child support payments for a non-resident parent by using gross income figures rather than net income figures.  Gross income figures can be obtained directly from HMRC making it faster, more accurate and transparent, and helping to reduce administration costs.
 
Initially the new scheme was applied to only a few eligible new applicants but it will soon be used for all new applications.  Existing cases do not have the option of staying on the old scheme and will gradually (between 2014 and 2018) be informed that they can either enter into a private agreement or make an application, as a new applicant, under the CS3 scheme. Those who fail to act on the case closure notice will have their child support application deemed to have been withdrawn and their case will automatically be closed.
 
How CS3 will be calculated
 
The non-resident parent’s previous year’s income will be used to make the calculation as follows:-
 
Income per week         Percentage of gross income for:
1 child             2 children        3 children or more
 
Less than £100            £7 flat rate       £7 flat rate       £7 flat rate
£100 – £200                 Reduced rate   Reduced rate   Reduced Rate
£200 – £800                 12%                 16%                 19%
£800 – £3,000              9%                   12%                 15%
 
There will be a reduction in the amount of the assessment where the non-resident parent has any child in their household, for whom they are responsible, to 11%, 14% and 16% respectively.
 
The maximum age for support is increased from 19 to 20 years.
 
Fees
 
In an attempt to encourage people to enter into private agreements rather than using the CSA the following fees will be applied:-
 
A £20 fee will be charged to the Applicant for making his/her application.
Where the collection service is used a 7% deduction will be made from the maintenance figure and for the non-resident parent a 20% fee will be charged on top of the maintenance figure.
Further fees are charged to the non-resident parent where enforcement steps are taken.  For example £50 where a deduction of earnings order is carried out and £300 where a liability order is pursued.
 
Child Support Agency changes to Child Maintenance Service
 
The Child Support Agency will continue to deal with all cases on the old calculation scheme while the Child Maintenance Service (CMS) will operate the new scheme or CS3.  The aim is to replace the CSA with the CMS.
 
Review
 
Under the new regime, if you are currently either paying child support or in receipt of it no change in the amount payable will be made (on a request for a review) unless the amount that you would be paying or receiving increases or decreases by more than 25%.