If you are a new applicant to the child support system, the current scheme known as “CS3” will apply to you. If you are already receiving child maintenance under the previous CS1 or CS2 schemes, then in due course your case will be closed. You will be encouraged to make your own arrangements or make a new application under CS3.
The CMS works on a fairly complex formula, which takes into account factors including the number of children (including other children the payer is responsible for maintaining), the payer’s income, pension contributions and the number of nights that the children spend on average with the payer. Under CS3 the formula is now based on the payer’s gross rather than net income.
Some people will be eligible for a nil or reduced rate (eg people on certain benefits or earning under £200 per week).For others, there is a basic rate for earnings between £200 and £800 per week before tax and national insurance (but after pension contributions). This is 12 per cent for one child, 16 per cent for two and 19 per cent for three or more. If you are a higher earner, an extra 9 per cent for one child, 12 per cent for two and 15 per cent for three or more children will then be applied to the amount above £800 per week, up to a maximum of £3,000 per week (£156,000 gross per year).
In cases involving earnings above £156,000 per year, the court has the power to make a “top up” order. The court rather than the CMS also has responsibility for sorting out private school fees or where a child has special needs resulting from a disability.
The reduction for shared care is 1/7th for between 52 and 103 nights per year, 2/7ths for 104 to 155 and 3/7ths for 155 to 174 nights.
As an incentive to parents to reach agreement, the CMS will also start to make both the payer and receiving parent pay for using the service once it is fully up and running – perhaps during 2014. There will be a flat rate fee for the application to assess (likely to be £20) and then if you want the CMS to collect the maintenance an ongoing 4 per cent will be deducted from the amount received by the parent with care, with the payer having to pay 20 per cent on top of the assessed figure.
By way of an example, let’s say that Mark and Hilary have split up and that their sons David and Robert live with Hilary and do not yet visit Mark overnight. Mark earns £1,000 per week after taking off his pension contributions. He will pay 16% of his income up to £800. This is £128. He will then pay an additional 12% of the extra £200 over the £800, which is £24. The total he will pay would therefore be £152. However, Mark will have to pay an extra £30.40 and Hilary will receive the reduced figure of £145.92 as a result of the CMS charges.
There are many other factors that can be taken into account. Inevitably, problems can be caused where income and shared care arrangements vary. No formula based system is going to be able to cope completely with the way many families actually live their lives. That is why, if you can reach an agreement on a regular figure and be flexible when circumstances change, it is far better for you and your children. You will also avoid the CMS charges and there will be more money available for the children.
More detailed information about the formal child maintenance system can be found here: https://www.gov.uk/how-child-maintenance-is-worked-out