As of the 30th June 2014 the Child Support Agency (CSA) was replaced by the Child Maintenance Service (CMS) and parents can no longer apply to the CSA to calculate what maintenance they should pay or receive.
The CSA have already begun closing cases from the 30th June and 6 months notice will be provided. In the event that you are currently receiving payments through the CSA, your payments will not be affected for at least a year or two.
Any cases that are not receiving maintenance payments will be closed from January 2015. After all of these cases have been closed they will begin to work on cases that are already in receipt of payments. It is unlikely that the changes will affect you before 2016 if you are already in receipt of or are paying maintenance through the CSA. The CSA predict it will be 2018 before all cases are closed completely and transferred to the CMS. Any new applications will have to be made through the Child Maintenance Service.
How will the changes affect the payments I make or receive?
To use the Child Maintenance Service, there is a fee payable of £20. The CMS will then check the income of the parent not making the application through Her Majesty’s Revenue and Customs (HMRC). A written breakdown of the calculation and schedule of payments will then be provided to you and, in addition, information and guidance will be provided to you to arrange the payments directly between you and the other party. In addition to this service, every year the CMS will review the other parents’ income through HMRC and advise on any adjustments necessary.
It is possible to instruct the CSM to collect the payments for you but additional charges will be applied. The paying parent will have to pay 20% of the maintenance amount on top of the payments, and the person in receipt of the payments will receive 4% less. This is to encourage parents to discuss and arrange payments directly between them.
Any parent that refuses to make payments resulting in it becoming necessary to go to court, will have additional charges applied on top of the maintenance arrears payable. This is aimed at hopefully deterring people from trying to avoid making payments.
Why is the system changing?
The old CSA was not fit for purpose and they spent £503 million in one year to transfer £1.1 billion in maintenance. The new system will encourage parents to discuss matters between themselves amicably and collect and make the payments between themselves.
For more information, please contact a member of our Family Law team.