The aim of the revised arrangements is to get child maintenance payments flowing quickly and regularly, with maintenance calculations being made in weeks, rather than months.
The main features of the new scheme are:
- a simple calculation of liability based on a percentage of the non-resident parent's net income;
- a new child maintenance premium which allows parents with care who are on Income Support or income-based Jobseeker's Allowance to keep up to 10 a week of any child maintenance paid for their children;
- clearer rules for presuming parentage;
- changed rules on shared care; and
- tougher sanctions to ensure non-resident parents do not avoid their responsibilities.
Payment is now based on a simple formula, unlike the earlier method which is complex. Maintenance payments are calculated by a formula based on the income of the non-resident parent, discounting tax and pension contributions. The payment method changed from being by cheque to direct credit to a bank or building society account in May 2005.
If the absent parent earns more than 200 a week, the parent with care receives 15 per cent of this amount for one child, 20 per cent for two children, and 25 per cent for three or more children, up to a cap of £2,000 on the separated parent's income.
Non-resident parents with a net weekly income of more than 100 but less than 200 a week pay 5 a week plus a percentage of the net weekly income over 100.
A non-resident parent who earns less than 100 a week after tax, or who receives benefits such as Income Support or Jobseekers' Allowance, pays a set amount of 5 a week.
Under the new system, the calculation ignores the income of the parent with care of the children, or the income of either parent's current partner.
There are also reductions in the amount payable if separated parents have other children or stepchildren under 16 in their care, or if their child stays overnight with them regularly.
There is also another important change. Under both the old and the new system the CSA automatically deals with child maintenance for benefit claimants. However, under the new system, it will be possible for court orders and child maintenance agreements made after 3 March 2003 to be broken after the order has been running for 12 months. Either parent can then apply to the CSA for an assessment and the CSA's decision would supersede the original court order.