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Finance for Children and the Child Support Agency (CSA)
The Child Support Agency (the CSA) is a Government body responsible for determining maintenance payments for children.
Generally, the CSA will assess the level of maintenance that the parent with whom a child is not living (the "non-resident parent") should pay to the other parent (the "parent with care") for the benefit of the child. A child is someone aged under 16, or under 19 and in full-time secondary education or sometimes in youth training. A formula is used to assess the amount payable, and may only be varied in certain circumstances.
A fixed percentage of the parent's net income is payable by the non-resident parent to the parent with care. 15% is payable for 1 child, 20% for 2 children and 25% for 3 or more children.
The whole system is presently being overhauled by the Government although any change is not imminent.
Court Proceedings
Generally only the CSA can determine the level of child maintenance and Judges cannot become involved in proceedings such as Divorce.
However the court may determine the level of maintenance instead of the CSA where:
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the parents agree that the court should do so, and the parent with care is not in receipt of state benefits (although either parent may opt out of the order and go to the CSA after 12 months, having given 2 months' notice)
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the child is aged 16 to 18 and is not in secondary education or sometimes youth training, or is over 18 and in education
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the non-resident parent has a high income of more than £2,000 net per week, and the CSA has assessed the maintenance at the maximum level possible and the parent with care wishes to apply to the court for a "top up" of maintenance
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the parent with care applies to the court for maintenance to meet additional educational expenses, for example, school fees or books and equipment
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the child is a stepchild of the non-resident parent and has been treated by him or her as a child of the family
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the child is disabled and has additional special needs and expenses, and the parent with care applies to the court for maintenance to meet such expenses
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the non-resident parent is not habitually resident in the UK.
Lump Sum and Property Orders for Children
The court has power to award a lump sum for the benefit of a child. The court can also order that a property should be held for the benefit of a child or that property should be transferred to the child or the parent with care of a child for the benefit of the child.
Factors Taken into Account by the Court
There are many factors which the court will take into account when considering whether or not to order financial provision for a child (by way of maintenance or lump sum or property orders).
These Factors Include:
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the income and earning capacity, property and other financial resources of the parents, together with their financial needs, obligations and responsibilities
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the income, earning capacity, other financial resources and the financial needs of the child
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any physical or mental disability of the child
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the manner in which the child was being, or was expected to be, educated or trained
Procedure for the CSA
A parent with care may make an application for maintenance to be assessed by the CSA by requesting and completing a form from the CSA (tel: 08457 133133 or download it from the CSA website http://www.csa.gov.uk/). The CSA will contact the non-resident parent by telephone or letter to ask for the information it needs to calculate the maintenance, and for proof of income. The CSA will assess the maintenance payable and will inform both parents. The parent with care may ask the CSA to deal with collecting the maintenance from the non-resident parent.
Procedure for the Court
Any application for a court order for maintenance, lump sum or property order is usually made to a county court on a standard form. The court will usually then list a short court appointment to make orders about how the application should progress and may order that both parties should exchange statements, setting out details of the case and their financial circumstances. A final hearing will then be listed at which the court will decide whether and what order should be made. Both parents should attend all court hearings.
The Calculation of Maintenance
Non-resident parents (i.e. those without the majority of day to day care) who earn more than £200 net per week are required to pay a percentage of that net income by way of child maintenance. This percentage is 15% if there is one child, 20% where there are two children and 25% if there are three or more children.
Where the non-resident parent is responsible for child maintenance for children from a different relationship, the relevant percentage of his or her income is apportioned between the children equally. Where the non-resident parent has other children living with him or her and the household receives child benefit for those children (for example, the children of a new partner, whether or not they are the non-resident parent's children), a discount is applied to his or her net income before the child maintenance is calculated. This discount is 15% where there is one child, 20% where there are two, and 25% where there are three or more.
The level of child maintenance is reduced where the non-resident parent shares the care of the child or children with the parent with care, by looking after them for 52 nights or more per year. The reduction is 1/7 for 52 to 103 nights per year, 2/7 for 104 to 155 nights, 3/7 for 156 to 174 nights and ½ for 175 or more nights (plus £7 for each child). However these rules are presently under review and may be abolished.
The details of how net income is calculated are complicated and contained in regulations. Net income includes salary and taxable profits or gross receipts, bonuses and overtime less income tax, national insurance and pension contributions. Investment income (including dividends) and benefits in kind are excluded. Any net income over £2,000 per week is ignored. It is a criminal offence to give false information to the CSA or to withhold information.
In the case of a non-resident parent earning between £100 and £200 net per week, the amount of child maintenance payable is reduced on a sliding scale depending upon how much that non-resident parent earns. For most non-resident parents who earn less than £100 net per week, a fixed amount of £5 per week child maintenance is payable.
No account is taken of any income received by the parent with care of the child(ren).
Similarly, any income received by the non-resident parent's new partner is disregarded. Housing costs are also disregarded. It is possible to apply for a 'variation' in certain prescribed situations, for example to take account of unearned income such as dividends or where the non-resident parent's income is inconsistent with his or her declared income. The law has been extended to apply to certain non-resident parents living and working overseas and employed by UK companies or in Government service.
Family Law
Future Referral to the Child Support Agency
Although it is still possible for parents to agree child maintenance where the parent with care is not in receipt of state benefits, and to record such an agreement in a court order, it is not possible to prevent future referral to the Child Support Agency. Either party to a court order for child maintenance made after 3 March 2003 may refer the issue of child maintenance back to the Child Support Agency by giving 2 months' notice after 12 months from the date of the order, even if no state benefits are being received. This does not apply to existing court orders in place prior to 3 March 2003. The court is able to enforce and vary the child maintenance payments contained in a court order made pre or post 3 March 2003.
