Each parent is responsible for maintaining their child (under the Child Support Act 1991).
The Matrimonial Causes Act 1857 first gave courts the power not only to grant divorce but also the right to award financial support to provide for the maintenance and education of children. The 1991 Act meant that for the first time maintenance had to be calculated by reference to a formula which took into account the financial circumstances of each parent. Parents with whom the children normally lives (‘parents with care’) who were on welfare benefits were effectively forced to make an application to the CSA for maintenance or have their benefits cut.
The Child Maintenance and Enforcement Commission (C-MEC), which in 2008 took over responsibility for the CSA, has authority to act where:
– you or your ex live separately from your child;
– you are a ‘parent’ (natural, adopted or conceived as a result of IVF);
– your child is under 16 years or in full time secondary education; and
– your child is living in the UK or the absent parent (or non-resident parent), lives in the UK.
The old formula
The original Child Support Act set out the ‘old formula’ which took into account the non-resident parent’s income and housing costs and the parent with care’s income, housing costs and other children. The old formula is still in force for pre-2003 claims.
The CSA also took into account the number of overnight stays the children had with the non-resident parent and their new children, pension contributions and new partner’s earnings. The parent with care’s natural children, pension contribution and new partner earnings were also taken into account.
It was always recognised that the inflexibility of a formula could deliver unfair results and so you could make an application giving the CSA the right to ‘depart’ from it. Such an application could take into consideration, for example, costs of travelling to work, contact costs (for example, the expense of the costs of travel to see a child), costs relating to illness or disability, debts incurred before the parents separated, as well as transfers of capital made on divorce. There were other protections and so if a non-resident parent deliberately paid income to another party to evade the CSA that would be taken into account, or if their lifestyle was inconsistent with declared income.
The process of calculating maintenance has proved complex, and according to CSA critics, cumbersome and time-consuming. It was reckoned over 100 separate pieces of information were needed before an assessment could be calculated.
Uncollected arrears of maintenance began to arise and by 2006 those arrears amounted to over £3.5 billion. In a landmark legal challenge a mother, called Mary Kehoe, claimed that, as a result of the agency’s errors, maintenance was lost. She wanted the government to pay that loss. Her case went all the way to the House of Lords and it was ruled in 2005 that the parent with care had no right to take steps themselves to recover arrears of maintenance – and if the secretary of state did not use the discretionary powers available to recover maintenance arrears then a parent with care could not claim compensation.
Post 2003 formula
For many years Parliament attempted to improve the Child Support scheme. In particular, the Child Support Pensions and Social Security Act 2000 simplified the calculation process and introduced a new formula coming into effect as of March 2003.
The new formula operates along the following lines:
– establish income of the non-resident parent, deducting tax, national insurance and pension contributions;
– deduct a set percentage for any new children living in the same household (15% for one child, 20% for two, and 25% for three or more);
– determine a set percentage of the remaining income that has to be paid to the parent with care – 15% for one child, 20% for two and 25% for three or more; and
– then divide the resulting figure to reflect any overnight stays and so if a child stays with the non-resident parent one night a week then the maintenance would be reduced by one seventh.
In June 2011 there were some 1,143,400 live CSA cases – 781,500 were under the current scheme and the remained under the old rules.
Under new legislation there will be changes to the formula, likely to come in in 2011 at the earliest. Critics of the CSA were not placated though and argued that even this new simplified formula has proved too difficult for the agency to implement and there have been calls for it to be abolished. One of the new roles of the C-MEC is to encourage parents to make their own private arrangements with regard to maintenance to be paid, coupled with tougher enforcement powers if the non-resident parent fails to pay.
Details as to how to apply to C-MEC are included on their website. The CSA has had a poor track record on collecting maintenance. The latest statistics (June 2011) indicate that 694,400 cases were paying maintenance out of 862,1000 cases – a maintenance outcome rate of approximately 78% (and doesn’t necessarily mean those cases are paid in full). It collected £1,159m in the year ending June 2011, – of which £123 comprised payments in arrears. It is reckoned that that non resident parents owe a total for £3.764 billion (and some 47% are unemployed). However under the current government proposals, if there is a private agreement and the non-resident parent doesn’t pay, you can’t use the CSA to enforce that agreement.
In 2010 new enforcement powers were introduced – including the power to take money directly from bank accounts without a court order and the power to recover arrears from the estate of a deceased non-resident parent. In April 2010 child maintenance was fully disregarded when calculating all out of work benefits enabling parents to keep every penny of their maintenance without it affecting their entitlement to benefits.
C-MEC currently says that from 2012 the new ‘gross income’ statutory maintenance scheme will be established – using latest available tax year information from HMRC. The maintenance award will be fixed for a year unless the NRP can show that their income has varied by more than 25%. C-MEC reckons that by ‘around 2015’ a single system for child maintenance will be in place. Ministers are also intending to introduce charges for users of the CSA scheme (both parents with care and non resident parents).
For more information see Child Maintenance Options www.cmoptions.org.