child support

by Helen Howard

child support | help and info

One of the (many) criticisms levelled at the Child Support Agency (CSA) was that it used to be impossible to work out the numbers and get the right answer. The old child support formula needed over 100 separate pieces of information to work out accurately how much separated parents should pay and involved a complex five-stage process which baffled and daunted many.

© Getty

All that should now have changed – at least in theory. Working out how much to pay in child support in the UK has become a lot less brain aching since March 2003, when the child support formula switched to a calculation based simply on a percentage of the 'non-resident parent's' income. This new formula applies to all families who split up since March 2003 – either of the ex-couple can ask the CSA to take up the case and apply this new formula.

who pays?

When parents separate, the parent who is the primary caregiver should receive child support from the other parent. Child support rates are worked out by the CSA, which since 1993 has worked out assessments and collected amounts due. The old system was based on income support levels, and took into account the net incomes of both parents, how many children are being looked after, housing costs and some special considerations – like pension payments, debt repayments and the cost of travel to work. Because it was complex, many parents found the system failed them and their children – less than one in three lone parents got any child maintenance from their child's father. Now the new system is much easier to work out – but will it mean that children of separated parents are better off?

working out child support now

The new rates of child support are based on a much simpler formula, one worked out on a percentage of the non-resident parent's income. This parent is called the 'payer' in the legislation and will pay:

• 15% of net income for one child
• 20% for two children, and
• 25% for three (or more).

'Non-resident parent' is the new less judgmental term for the parent who does not have primary care of the children (the original term was 'absent parent'). The parent looking after the children will still be termed the 'parent with care' under the new law.

A non-resident parent could be the mother or the father (although nine out of ten lone parents are women, so the vast majority of non-resident parents are fathers). Whichever parent looks after the children most of the time will be the parent with care. In the unusual case of parents sharing the care of the children exactly equally, whichever parent gets the child benefit becomes the parent with care. If however the children stay over regularly with the non-resident parent (at least one night in every seven nights), the overnight stays will reduce the amount of child support paid.

what's taken into account?

The new formula looks straightforward to apply on the surface, although there are some quirks in the legislation which can produce unexpected results. The percentage will be applied to the non-resident parent's net earned income – that is their gross income less tax, national insurance contributions and pension payments. But if the non-resident parents gets their income from interest on savings – that won't initially be taken into account, and the parent with care will have to ask the CSA for a variation to include it. The parent with care's income also won't get taken into account at all under the current formula. So whether the parent with care stays at home to look after the children or goes out to work and earns a very high salary, child support won't be affected.

what else is included in the calculations?

Very little. Housing costs and travel to work costs, for example, are assumed will be covered out of the 75-85% of the payer's remaining net income.

Repayment of some debts incurred before the parents' separation and some costs in maintaining contact (such as expensive plane flights for example) can be taken into account in reduced maintenance payments, but only if the non-resident parent asks for a variation of child support. But if there are special costs because the child has a long-term illness or disability, these may increase the amount.

new families

If the paying parent is financially responsible for step-children or has children with a new partner, this decreases the amount of child support for the children of the previous family. The percentage allowances for the non-resident parent for the 'new' children are the same as for the children of the first family – in other words if he has one child with a new partner, 15% of his net income is deducted before the child support percentage assessment applies. Say he earns £300 per week net income, he is given an extra allowance of £45 a week for the new baby, so that child support will be worked out on a revised net income figure of £255 (ie £300 less £45).

overnight stays

There are reductions too for overnight stays with the paying parent – as long as the child/children stay over at least one night a week on average, the overall child support is reduced by one-seventh. And payment of ongoing costs for the family home (and boarding school fees) can also reduce the level paid if either parent asks for a variation of child support.

is there a ceiling?

Lawyers' groups had lobbied to have a maximum ceiling set, which was eventually introduced, so that the maximum amount of child support payable will be £26,000 a year (for three children). To have to pay this amount the father would have net income of at least £104,000 a year (ie 25% of £104,000 equals £26,000).

is there a minimum amount?

There is a flat rate minimum payment of £5 per week, payable even by those on incomes of under £100 per week or on benefit – but this is waived where there are more than 52 nights of contact a year – ie at least one overnight stay a week. Reduced rates are payable by those on incomes between £100 and £200 per week.

how long will support last?

Child support under the formula will be paid to children under 16, or above that but still receiving full-time non-advanced education (namely secondary education or training college). Children who need maintenance to support them at university (tertiary education) would usually have to apply themselves, under the Children Act 1989, if they need to force a parent to pay up to meet their costs.

can parents be forced to pay?

Yes. Unpaid maintenance is classed as a debt. The CSA can ask employers to deduct maintenance payments from non-resident parents' wages and self-employed people who refuse to pay can be taken to court. Unemployed people may have a contribution towards maintenance deducted from their benefits.

does the new formula have to be used?

The short answer to this is yes, if you separate and arrange child support payments after March 2003. This new formula will eventually be phased in for all couples whose child support was worked out under the old system, although a date for bringing all child support assessments into line hasn't yet been set. However, not all couples have to go through the CSA. The CSA now encourages parents who do not claim or receive state benefits to make their own arrangements for maintenance rather than coming through the CSA – a self-help pack will shortly be available on the CSA website to help parents do this (see help and info).

example

A father has net income of £2,250 a month (and pays housing costs of £1000 a month) and the mother has income of £2000 a month. They have three children. Under the old system, Dad would have paid £364.58 a month (worked out under the complex five-stage formula, when his housing costs and the mother's income would both have been taken into account) but under the new system, because his housing costs and the mother's income are both ignored, he will pay £562.50 a month (ie 25% of £2250).

If Dad forms a new relationship with a new partner with three children, the new monthly child support figure will be reduced. So his net income under the new system will be notionally reduced by 25% (because of the three children in the new family) to £1687.50 a month. He will then pay 25% of this figure as child support for the three children of his previous family, ie £421.87 a month. And if Dad has his children from his previous marriage to stay with him one night per week, the support assessment will reduce down again by one-seventh, to £361.61 a month.

(January 2002, updated June 2005)

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