Point of Law - The CSA

This article was written by Peter Watson-Lee of Williams Thompson for a national magazine (Vive) when the Child Support Agency rules were changed in 2003. It explains the basis upon which the CSA calculate the level of maintenance due. Sadly, however, despite the Government's hope, this has not improved the way in which the CSA operates. The working of the CSA has continued to be extremely troubled causing immense problems to both parents with care of children and maintenance payers.

The mere mention of the CSA is enough to strike terror into many a parent. Here, Peter Watson-Lee explains the implications of new rules governing how the CSA calculates and enforces child maintenance payments.

So what is the Child Support Agency?

It is a Government agency set up by parliament. Its job is to calculate how much money should be paid each week by an absent parent to the parent with the children for their upkeep. It also enforces that payment.

So how does it decide how much you should pay?

This is the great problem. Before the Child Support Agency, levels of maintenance were decided by the courts, who would look at the individual facts of each case. However, the Child Support Agency works on a formula instead. Until recently, it applied a standard figure for the needs of the children, looked at the husband’s net income, deducted his rent and some outgoings, compared the relative income of both parents and took into account a series of other matters.

That sounds very complicated.

It was, and that was the problem. The formula was so complicated that few people really understood it. It also made it very time consuming to calculate the maintenance – and that gave the absent parent many opportunities to delay the assessment.

But has this all changed?

Yes, parliament changed the law in 2003.

So what is the change?

The main change is to simplify the formula. The new law says that if you are the absent parent and you have one child, you must pay 15 per cent of your net income for their maintenance; if you have two children, you must pay 20 per cent of your net income, and if you have three or more children, 25 per cent.

And what counts as net income?

This is the great problem with using formulas. For someone on a regular wage, it is their income after tax, National Insurance and pension contributions. However, net income is difficult to apply to someone who is self-employed or has a fluctuating income. Even in a ‘steady’ job, people often have commissions or bonuses or share save schemes and it is unclear as to how the formula will apply to those. Sadly, there is little in the changes that is going to tackle the problem of absent parents who want to manipulate their finances to avoid responsibility. However, the theory is that by making the formula simpler, the Child Support Agency will have more time available to concentrate on those sorts of cases.

Nevertheless, the new rules still sound a lot easier.
Is the system going to be fairer?

On the face of it, it sounds as if it should be. In fact, it is what the politicians call ‘rough justice’. By being simple, it is going to ignore individual circumstances. For example, many absent parents have to find and fund other accommodation for themselves. Under the old system that was taken into account and the maintenance obligation was reduced. That will no longer be the case and some absent parents will find their maintenance going up. Also, for example, the income of the parent who has the children will no longer be taken into account. This is going to make life a lot easier for, say, mothers who have part-time jobs as they will not have to worry about the effect it will have on their Child Support. On the other hand, some absent parents will think it unfair if they still have to pay a significant share of their income when the parent with the children may have a far better income than they do.

So will this change result in increased maintenance overall?

No. In return for the ‘rough justice’ of the formula, the overall levels of maintenance are lower. For example, under the old formula the absent parent could have paid as much as 30 per cent of their income, regardless of how many children they have. Accordingly, a lot of parents with care may find their income reducing.

So is this bad news for parents with care?

In some cases, yes. However, the Government’s view is that, overall, it hopes the simplicity of the formula will result in more absent parents paying. Also there is one piece of good news for parents who are on Income Support. Under the old system, any Child Support paid just comes off the amount you receive from Income Support. Under the new rules, parents will be allowed to keep the first £10 of Child Support without it affecting their Income Support.

What if we share the care of the children?

The new rules state that the Child Support you pay will be reduced depending on how often the children stay with you. For example, if the children stay with you for more than 52 nights a year, the amount you pay will be reduced by 1/7th; if they stay for more than 104 nights, it will be reduced by 2/7ths, and so on, up to a maximum reduction of ½, if the children stay for more than 175 nights. The big fear here, however, is that this may encourage more contact disputes as some parents try to increase or reduce contact because of the effect it has on the Child Support.

So do I have to use the Child Support Agency?

No. If you can agree the amount of maintenance between yourselves, there is no need for the matter to be referred to the Child Support Agency, unless the parent with care goes onto Income Support. However, if you just agree it informally, you run the risk that one of you might back out and either stop paying or decide to go to the Child Support Agency if they think they can do better. In effect, therefore, most people are going to rely upon the Child Support Agency formula.

Is this going to affect me if I am already receiving money under a Child Support Assessment?

The intention is that this new system will apply to all new cases. It will then start being applied to existing cases, but it is envisaged that it may take some years to swap all the existing cases onto the new system. There is also the suggestion that there will be some ‘phasing’, so that if the new formula results in a significant change, this will be phased in by steps of £10 per week for up to six years.

What if my Child Maintenance is being paid through a Court Order?

Interestingly, many people avoided the CSA altogether under old regulations as if parents could agree levels of maintenance, then they could get those levels of maintenance agreed in a Court Order and (unless the parent with care goes onto Income Support) the CSA does not get involved at all. Many parents who went through divorce where the courts were involved used this to side-step the CSA altogether.

Under the new system, this is not going to be so easy, as the rules say that even if you agree matters and even if a court confirms that agreement in an Order, after one year and two months, either party may go to the CSA and ask the CSA to apply its formula instead. This means that even if you agree the level of child maintenance between you, you both must be aware that in due course your agreement can be overturned by one of you asking the CSA to impose their formula instead. However, this does not apply if the child support was recorded in a court order made before the new rules came into effect.

Peter Watson-Lee is a past Chairman of the Law Society of England & Wales’ Family Law Committee, and a practising solicitor with Messrs Williams Thompson, a specialist family law practice in Christchurch, Dorset.

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