New system

MathisFun wrote:

So sorry Mumtoboys that ''loophole'' wont be closed.

argghh!

Actually I think there are some new minor changes that mean the "loophole" will be narrowed.

motherof2 wrote:

Does anybody know when exactly in 2012 these changes in the CSA''s method of calculation will start to be used? I''ve been searching the web and can find no definite dates...

Its now thought to be more like 2014 or 2015.

But then again they never migrated 1993 cases to 2003 scheme in the end.

100% of pension contributions are allowed as in CS2 so doubt it will lead to loads of people increasing their contributions. As regards them being able to take action if contributions are excessive it sounds good but will it work? If you still have enough to live on and the amounts are within pension law it would be difficult to prove they were excessive

Fiona wrote:

Under the new child maintenance Calculation Regulations amounts paid as contributions to an approved occupational or personal pension scheme are the only thing that will be deducted from income. However, where the contributions are offset against earnings by an employer, the information the CSA receives from HMRC will not include any details of those contributions so they won''t be taken into account.

IF the PWC believes the contributions to a pension are excessive they will be able to apply for a variation and the CSA will look at the particular circumstances to determine whether income is being diverted to avoid CM liability.

Just a thought Fiona as you mention pension schemes that are offset against earnings not being visible if figures from HMRC are used. What about other salary sacrifice schemes such as Cycle To Work, GiftAid, Share Purchase Plan etc? These will no longer be visible either if HMRC details are used.

Has another loophole for the wealthy been created or are there measures to prevent this?

''cycle to work'', pensions and other plans are not for the wealthy, they are for anyone who works for a participating company and anyone who wants to make tax efficient choices and savings as opposed to spend and become indebted. Its about time the government rewarded those who save while meeting their financial obligations.

Instead of laying into those who pay CS for maximising their saving potential- why not go for those who really do avoid their responsibilities, and those goes for both parents

Totally agree with you and personally think that it will be very hard for the CSA to prove "diversion of income" if something is within government legislation. However it is fair to say someone with a high income is more likely to be able to afford to avail themselves of such schemes. In fact you have to be left with at least the minimum wage after all salary sacrifices are taken into account.

On a positive note if there isn''t CSA legislation in place to stop salary sacrifices being accounted for then for the first time child care costs of any new family will be allowed for. The NRP will be able to take child care vouchers as a salary sacrifice. I have argued for many years, to no avail, that child care costs of any new family should be allowed as a departure/variation.

As regards the comment about going for the people who really avoid their responsibilities I can''t see that happening. CSA has never been about that, it is far easier to ignore the real hard cases and go for the softer targets.

somuch2know2 wrote:

''cycle to work'', pensions and other plans are not for the wealthy, they are for anyone who works for a participating company and anyone who wants to make tax efficient choices and savings as opposed to spend and become indebted. Its about time the government rewarded those who save while meeting their financial obligations.

Instead of laying into those who pay CS for maximising their saving potential- why not go for those who really do avoid their responsibilities, and those goes for both parents