In this Guest Blog Michelle Counley of NACSA helps to unravel some of the changes taking place in child maintenance payments.
The Child Support Agency has a troubled history and parents, along with taxpayers throughout the UK, have suffered financially as a result. So I’m sure many people will agree that any news of changes to enhance the system are a good thing. Don’t get too excited though. For now, the only people affected will be estranged couples with four or more children. It is a start though and if the new system goes well, it will cascade down to smaller families.
In 2006, a far-reaching review of the system that calculates and collects payments from non-resident parents was announced, leading to the Child Maintenance and Other Payments Act 2008 (CMOPA). Following on from that, last December the Government introduced the main framework for this new way of calculating payments, known as gross income scheme legislation but referred to as CS3. Initially it is available only to a restricted group of parents called Pathfinder Groups. The first Pathfinder Group involves cases with four or more children with the same parent with care and non-resident parent. After a settling in period, the scheme will be extended to cases involving two or more children with the same parents, though no deadline has not yet been set for that.
One of the key changes within the new scheme is the ability for parents to make their own private arrangements for maintenance for their children, and this should be seen as a positive step as it enables amicable parents to make tailor made arrangements specific to their needs.
Unfortunately, a private arrangement is not always a feasible option and so a statutory scheme is necessary to safeguard maintenance for children in such circumstances. But therein lies the problem, the difficult task of finding a scheme that accommodates all circumstances. There is no "one fit solution" for the complex structures of reconstituted families.
Furthermore, parents who depend on Government to secure maintenance payments are immediately presented with an application fee of £20, and CS3 will no longer rely on the non-resident parent to supply income information to enable a calculation to be completed. Such information will now be gained directly from HMRC.
The use of gross income as a foundation for calculating child maintenance created difficulties in identifying appropriate sources of additional family income, such as tax credits. As a result, tax credits are no longer deemed as income, a measure that is welcomed by many.
Once a calculation is made, parents will be encouraged to make direct pay arrangements, without then any need for involvement from the agency. Allowing this is another step in the right direction. But if Government wants to reduce the dependency on the agency in terms of collecting and paying out maintenance payments, it will need to tackle the culture that has developed among staff which seems to accept the word of the parent with care over any evidence provided by the non-resident parent.
Parents who cannot secure regular payment directly from their ex-partner will have no alternative but to rely on the collect and pay option offered by the Child Maintenance Service, but this will bring further charges along with it. The parent with care will lose seven per cent of any maintenance award made, which of course may be a bitter sweet pill if it actually delivers maintenance payments on a regular basis.
The non-resident parent will face a 20 per cent fee of any maintenance calculation which will be charged in addition to the actual maintenance award. The rate is high and acts as a further incentive for non-resident parents to pay directly
There is much to be said about the positive steps being implemented with the new system. However, whether it will alter long-term effectiveness perceptions of the child support mechanism is yet to be seen.
NACSA is an organisation dedicated to helping parents who experience difficulty with the Child Support Act and its Agency. We represent and assist parents with care and non-resident parents, along with their extended families, to ensure that legislation is applied correctly within case administration.