CSA calculation changes and contact costs

There has already been a thread about this but thgouth it maybe useful to post again. This information was provided by the CSA on the 22/10/2010 and it the current information they have.

The Maintenance assessment process will be simplified to enable a quicker, more accurate and easy to understand process. This process is expected to be introduced from 2011. It is proposed that the Commission will use the latest tax year information from Her Majesty’s Revenue & Customs (HMRC) as the basis for working out how much child maintenance should be paid. Assessments will be fixed for one year unless the non-resident parent’s income changes by more than 25%.



This new process will reduce the time it takes to make a calculation and also the number of changes of circumstance the Commission will need to implement during the year.



Using previous tax year returns provided by HMRC (rather than net income payslips provided by the non-resident parent) as a basis for working out how much child maintenance should be paid will reduce the opportunities for parents to delay or mislead during the maintenance calculation process. This will further simplify and speed up the time it takes to get money flowing to children who need it.

Also proposed is an increase from £5 per week to £7 per week – in the flat rate of maintenance paid by non –resident parents on benefits.



To ensure that the move to gross income generates similar child maintenance liabilities to those under the child support scheme introduced in 2003 the Government has proposed a further change to the basic percentage rates.

• for non resident parents with incomes of between £200 and £800 a week, the rate will be 12% for 1 child, 16% for 2 children and 19% for 3 and more, across the whole income;

• for non-resident parents with incomes above £800 a week, the corresponding rates will be 9%, 12% and 15% (but only for that slice of income; for the slice of income up to £800 a week, the rates above will apply).



Thus, a non-resident parent earning £1,000 a week and with 1 child to support would pay 12% of the first £800 and 9% on the remaining £200 of income, a total liability of £114 a week.



Contact costs:



Sometimes child maintenance can take into account exceptional circumstances that are not covered by the basic rules. This is called Departure under the Old Rules (pre 2003) and variation under the New Rules post 2003). Non-resident parents may be eligible for a Departure/Variation if they incur certain specified costs in maintaining regular contact with the qualifying child. The expenses, which are taken into account, are limited to:

· Certain costs of travel (such as where the non resident parent travels to visit the child or vice versa); and exceptionally

overnight accommodation (for example, if it is accepted that a return journey on the same day is impractical).


If the non-resident parent or qualifying child needs to be accompanied (because of age, illness or disability) this cost can also count as a special expense.

Travel costs are limited to:

The cost of a ticket on public transport;
If travel is by private vehicle, the fuel costs and other incidental expenses of the journey such as toll fees; and
Taxi fares, if the disability or long-term illness of the non-resident parent or child makes it impractical to use other forms of transport.


Car hire costs can be considered but only if the costs are less than those of using a means of transport described above.

If the decision maker decides that the costs applied for by the non-resident parent are unreasonably high or unreasonably incurred, they may allow a lower amount or nothing for the variation.



An application for a Departure/Variation can be made at any time. An application may be accepted over the phone. It will not need to be put in writing unless the decision maker considers it to be necessary.

which is all very well and good and I get the logic of it.

but what happens when you have an ex who is self-employed and accidentally on purpose possibly maybe never actually gets round to doing a tax return? the last time my ex worked for someone else was around 2004...is that the information that they're going to use in the absence of anything else? What happens with those exs who return a basic income but who have 3 cars on their drive and 6 holidays a year? Are we still trying to seek variations? I guess so...

and is the system clever enough to pick up those who have both PAYE status through an employer and who earn extra on the side and do a personal tax return as well?

Whilst I feel this closes a loop hole around anyone being able to put 90% of their income into a pension and say sorry, there's nothing left, it still feels very much like those who are dealing with self-employed ex's who don't want to pay are still going to have to struggle to get what the children deserve.

Did I miss something? Please tell me I don't quite understand it!

I'm in the same boat Mum!!! I guess its back to the variation process and whatever legislation the CSA have in order to carry out investigations etc. I guess they must liase quite closely with HMRC too....well you would think so wouldnt you??
Ho hum back to the drawing board......

I can't seem to get my head around these new rules!

Can someone help/simplify:

My ex is paying £770 for 4 children per month through CSA (last year). Will I be worse or better off with this new scheme next year?

thanks
sorry but I'm finding it really difficult to work out.
PS he also gets a work bonus beginning of each year 17% - should I ask for a re-assessment, CSA told me to wait until after beginning of next year once the year is up to do it.

Welshmum - regarding the bonus - under the current regulations if you ask for a reassesment 1 month after the bonus has been paid he will be required to provide 3 payslips - one of which should have the bonus on it and so will be taken into account (somehow).

It is impossible to say whether an individual will be better or worse off on the new system as all circumstances are different.... You would need to analyse his payslips and do each calculation yourself to know that.

Landofairies - can you provide a link ? Also are the new regulations about using HMRC for info regarding earnings being implemented before the gross salary regulations or at the same time ??

poppy

Welsh mum - you will need to look at his payslips and see whether or not he is shuffling money under the carpet in terms of a pension or other perfectly legal deductible items. If he is, you'll probably be better off on the new scheme, if he's not then probably not. But it's all a bit ifs and buts really.... The point of this is that they are actually taking money from what is actually earnt, not what is left over when everybody else has had a cut, isn't it? which closes some self-employed loop holes but sure as hell not the 'won't pay' ones!

The other issues is - correct me if I'm wrong - but this is CSA3 and all new people will go onto it but the rest of us will stay where we are unless we ask to go over (which I think involves closing a claim, waiting 13 weeks and opening a new claim)? And/or until they get to the point of pushing us over which doesn't seem to have happened for CSA1 people.

Hello there

Can you tell me please, with the new calculations of 16% for 2 children - will that include my monthly pension?
Thank you
Stu