Changes to the Child Maintenance System

Article date: 05.08.11

*On 1 November 2008 the Child Maintenance and Enforcement Committee (CMEC) took over the running of the Child Support Agency (CSA) and it is anticipated that the new ‘gross income’ Statutory Maintenance scheme will be introduced in 2012. It is also hoped that by 2015 there will be a single system of child maintenance within England and Wales.

Voluntary Maintenance Agreements

It is no longer compulsory for any party to use CMEC (formerly the CSA). Instead, there is now a great deal of emphasis being placed on encouraging parties to agree voluntary arrangements without the involvement of the CMEC. CMEC are obliged to provide support and give advice to parties who wish to set up voluntary arrangements. CMEC provides such advice through the Child Maintenance Options (CMO) website (http://www.cmoptions.org/). It is claimed that over 100,000 children have already benefitted from voluntarily agreed maintenance arrangements.

Extra Enforcement Powers

CMEC has also been provided with extra enforcement powers in addition to those previously held by the CSA. CMEC, has the ability to deduct maintenance payments and/or arrears from a bank account without the need to apply to the Courts. According to a recent review completed by CMEC, approximately £760,000.00 was collected from Non-Resident Parents through deduction orders between August 2009 and July 2010 alone. It is thought that these sums would not have been collected without the enforcement powers which are now available to CMEC. It is likely that these powers will be used more frequently in the future.

The new enforcement powers will also be used in due course under the future “gross income” scheme.

‘Gross Income’ Statutory System

The new ‘gross income’ scheme is based on the information received from HM Revenue and Customs (HMRC) during the previous tax year. The maintenance award will be fixed for one year unless income varies by 25% or more. It is anticipated that this new scheme will save both time and money. The new formula will provide two different sets of percentages to be applied where the non-resident parent’s (NRP) gross weekly income exceeds £800. For income below that threshold, the percentage to be applied is as follows:

  • 12% one child
  • 16% two children
  • 19% three or more children

For any weekly income above £800, the following set of percentages will also be applied:

  • 9% one child
  • 12% two children
  • 15% three or more children

To clarify, should the gross weekly income of the NRP exceed the threshold of £800.00, both of the above percentages will be applied and then added together to determine the extent of their maintenance obligation. There is a different formula where the NRP’s gross weekly income is less than £200. Deductions can be made in respect of relevant other children living with the NRP. For example, gross weekly income is reduced by 12% for one child, 16% for two children and 19% for three or more children. The current upper limit of the formula, which is currently £2,000 per week (net) has been increased to £3,000 per week (gross). Any income over and above this limit will be ignored. Should you require any further information in relation to child maintenance or the financial implications of divorce or separation, please contact Aldridge Brownlee LLP.

* This is not legal advice; it is intended to provide information of general interest about current legal issues.