Child Maintenance Gross Income Scheme
CSA cases are closing and all cases will shortly be administered by Child Maintenance Service. Child maintenance calculations will now be based on Gross Income of the Paying Parent, which is the salary paid before any deductions for tax and national insurance are allowed.
The Gross Income scheme was introduced on 10.12.12 although phased in slowly so did not affect all cases at once. From 25.11.13 all new applications were subject to the new Gross Income Scheme rules.
From 30.06.14 the CSA Case Closure program commenced, which will oversee the closure of all CS1 (old rules) and CS2 (new rules) cases. Parents will need to consider making a private arrangement (called a family based arrangement) or to reapply to the new Child Maintenance Service and pay the appropriate fee.
The objective for CS3 is for parents to make their own private arrangements for child maintenance. The measure was welcomed by parents, family lawyers and CSA specialists as it allows amicable parents to arrange maintenance specific to their individual needs. But private arrangements are not always feasible and a statutory scheme is necessary to safeguard maintenance for children in such circumstances. Even under the statutory scheme, the Paying Parent (the ‘NRP’ on previous schemes) will be allowed to pay maintenance directly to the ‘Receiving Parent’ (the PWC on previous schemes). The Receiving Parent cannot refuse a Direct Pay arrangement under CS3.
Before any application to CS3 is made, the applicant must first have a “Gateway Conversation” with CMOptions. If an application to CS3 is still required, a fee of £20 is charged and once paid, a reference number is provided. CMS will not process an application unless a reference number is provided. Those under the age of 18 or who have at some stage reported Domestic Violence will be exempt from the application fee, and will be fast tracked onto CS3.
Charges of 4% to the receiving parent and 20% to the paying parent of the maintenance calculation will also apply if the case is managed by CMS. Further charges would apply if enforcement measures are necessary. For more details please visit our webpage Fees and Charges
A major difference between CS1/CS2 cases and those assessed under CS3 is the use of Gross Income rather than Net Income. Details of the Paying Parent’s income will be gained directly from HMRC wherever possible. Pension contributions will be allowed. Tax Credits will no longer be treated as income.
To compensate for use of Gross Income, the calculation rates are slightly lower than those used in CS2 calculations. Reductions for overnight care of the child/ren will continue to apply at the same rates as those used in the CS2 scheme, with the added option for a ‘presumed one night shared care allowance’ where parents disagree over the level of overnight access that takes place. This will only be changed if sufficient evidence is provided to suggest the overnight access is different.
For more information about the calculation of maintenance please visit our webpage Child Maintenance calculation
Two significant elements of the Departure/Variation scheme which will no longer feature in CS3 are “Lifestyle Inconsistent with Declared Income” and “Assets capable of producing an income”. Unearned income, such as Rental Income or that received through investments can still be included under a variation application.
For more assistance on CS3 scheme, please consider joining NACSA. Helping to support our organisation will help to keep services available to you and other families. Join NACSA