New CSA rules 2011
October 24, 2010
I heard that CMEC is one of the quangoes to be quashed by the government, however, the csa will remain but a new system will be introduced in 2011, I found this on a lawyers website to explain it, People most likely to benefit from changes to the Child Support Agency are the self-employed, says a Kent family law solicitor.
The CSA is to be replaced by the Child Maintenance and Enforcement Commission(CMEC).
Susi Gillespie, 33, a solicitor in the family law team at leading regional law firm Furley Page, comments: “The new regime is assessed on gross rather than net income. If you are self-employed you can ‘pay’ yourself in ways that incur less tax and you can also claim tax relief on all kinds of things that wouldn’t be possible under PAYE. In effect, you can generally keep more of your income.
“This doesn’t mean you’re acting illegally. It’s just the inevitable result of a tax system that allows people to claim reliefs because they have to go to the trouble of completing a tax return – and different types of income are taxed at different rates.”
There are three main changes to the CSA, explains Susi.
First, percentages applied to the paying party’s income under CMES above £800 a week are lower. The paying party will now pay 12% of gross income up to £800 a week in respect of one child; 16% for two, and 19% for three or more children. (The current CSA rates of 15% for one child; 20% for two, and 25% for three children are applied to the whole of the paying party’s net income below £2,000 a week.) Income above £800 a week gross (the ceiling is £3,000 a week) will be subject to the above percentages for the first £800 with lower percentages of nine per cent for one child; 12% for two, and 15% for three or more children applied to the remainder.
“However,” says Susi, “the potentially unhelpful rule allowing the paying party a reduction of one seventh for every 52 nights a year that the child or children stay over with them is unchanged so the other party still has a financial incentive to restrict this facility.”
(For people already being assessed by the CSA for maintenance, the new rates won’t come into force until 2011.) Second, private agreements will be upheld – even where the receiving party gets benefits and payments in kind such as contributions towards school uniforms, clothes or holidays.
But Susi points out that as the existing rule allowing either party to apply for an assessment after an agreement contained in a court order is more than 12 months old continues to apply, it will be impossible to negotiate financial agreements with any certainty that the agreed levels of child support will remain the same.
Third, child maintenance will not affect the receiving party’s benefits claim in any way. This change will be implemented from April 2010.