At the end of last month, the government released new figures that document a sharp decrease in the number of people opting to use the state Child Maintenance Service (CMS). According to those statistics, there was a 38% drop in the number of parents using the service between May and August this year, with around 3,700 fewer applications in the latter month.
According to children’s charity, Gingerbread, this reduction is attributable to the new charges that were introduced to the service during the summer. Since June, parents wishing to use the CMS must pay at £20 fee to do so. While the government predicted that this would lead to a reduction in use of around 12%, the charity has suggested that these new figures confirm the fears that it previously expressed that this prediction underestimates the extent to which the charge acts as a deterrent to parents.
In light of these figures, the information below answers some of the most frequently asked questions in relation to the Child Maintenance System. In doing so, it aims to explain the new system and its related charges, in order to provide clarity to parents.
Child Maintenance: Frequently Asked Questions
1. What is child maintenance?
Child maintenance is a form of financial support under which one parent will pay the other to assist with the day-to-day costs of raising their child. It is primarily used where parents have separated or were never together, to ensure that both contribute to the everyday costs of caring for the child.
2. What is the CMS?
The Child Maintenance Service (CMS) is the organisation charged with dealing with the issue of child support in the UK. Child maintenance used to be managed by the Child Support Agency (CSA). However, that organisation is gradually being phased out and replaced by the CMS. It is no longer possible to apply to the CSA, and cases under the old system as gradually being closed. Parents under the CSA will be given 6 months notice before their case is closed and transferred to the new system. It is unlikely, however, that this will happen in the near future – with an estimate that all the existing CSA cases will not be closed until 2018.
3. What services are available?
The CMS helps parents manage their financial arrangements in relation to the care of their child. It provides a number of useful services in this regard, including:
• Checking the income of the paying parent with HMRC for the purpose of calculating his or her child support liability;
• Formulating a maintenance calculation, which sets out what the paying parent must give the receiving parent, as well as organising a schedule for when those payments must be made;
• Annually reviewing the amount of child maintenance that a parent is entitled to receive or required to pay;
• An online tracking system, which enables a parent to keep on top of his or her child maintenance history; and
• A collect and pay system, which can be used to collect child maintenance from a paying parent, and give it to the corresponding receiving parent, where the parties are unable to make arrangements between themselves in this regard for any reason.
4. How is child maintenance calculated?
The amount of child maintenance owed will depend on what is known as the ‘gross income’ of the paying parent. This amount will be based on the person’s wages, pension, as well as other sources of income, such as any interest they make on savings. Importantly, however, the income of the paying parent’s partner will not be taken into account when calculating child maintenance. Different rates of child maintenance apply, depending on the income and situation of the paying parent. The Nil Rate, where no maintenance is owed, will only apply to very low earners, young people on certain benefits, prisoners and those in residential care. A £7 per week flat rate applies where the paying parents is in receipt of income support or job seekers’ allowance, or where his or her income is lower than £100 per week. After this, reduced rates apply to those earning between £100 and £200 per week, while the basic rate will apply to those above this threshold. The basic rate takes a percentage of the paying parent’s income for child support, depending on the number of children that they have.
5. What charges apply?
Since June 2014, a number of new charges and fees apply under the CMS. Firstly, there is an application fee of £20. This means that any parent wishing to open a new case with the CMS, in order to use it services, will not be able to do so without paying this fee. The only exception to this rule is where a parent has previously been the victim of domestic violence. In addition, where parents wish to use the collect and pay service, there are additional charges. These apply not only to the parent who is obliged to pay the maintenance – who will be charged an additional 20% – but also to the parent receiving the child support payment. The receiving parent will have 4% of their support deducted for using the collection service, even though often he or she may have little choice in the matter.
6. Do I have to use the CMS?
Parents are not obliged to use the CMS. Indeed, they are actively encouraged to try and come to their own arrangements in private, and are required to speak to the Child Maintenance Options Service before opening a file with the CMS. Where they do choose to make their own plans for child support, this is known as a ‘family based arrangement’ or ‘voluntary arrangement’. There are a number of advantages of coming to an agreement on your own, without resorting to use of the CMS.
Firstly, it is often quicker and easier, and can help avoid the paperwork related to using the service.
Secondly, it offers a greater degree of flexibility. The law does not require you to follow any rules when making your own voluntary arrangements, and the result is that it is possible to tailor the agreement to the specific needs and circumstances of your family.
Thirdly, and perhaps most importantly, it may encourage a cooperative approach to the care of your children, while is often in the interests of all parties involved.
However, before finalising a family based arrangement, you may wish to seek legal advice. A family law solicitor can advise you on what things you may want to consider and include in your arrangement, to help you avoid any future disputes.
Legal Advice on your Child Arrangements
Separation is hard on all parties involved – and can be particularly difficult on children if the parents in question cannot come to arrangement as to the financial provision and care of the child. Sensible and practical legal advice can help you avoid future disputes, thus protecting the best interests of your child. The solicitors at Gibson Kerr can provide you with advice on residence, contact and financial arrangements in the event of a separation. For legal advice from our family solicitors, contact us today on 0131 516 5545 (Edinburgh) or 0141 530 2841 (Glasgow).