Coming soon - the ultimate Child Maintenance Service Survivor's Guide App. Written by CMS/ CSA legal experts, the App is full of advice and guidance on how to deal with the statutory Child Maintenance Service. The guide is full of legal advice and tips on how to manage Mandatory Reconsiderations, Case Management Directions and how to deal with an appeal along with help and tips on all aspects of CSA and CMS arrears.
Trying getting the right advice and you just might get the right result.
I am often told that if you are self employed you can get away with not paying child maintenance and the Child Maintenance Service cannot collect any outstanding debt. Believe it or not, that is a complete load of rubbish. I am convinced that many parents adopt this position so they can use low or no maintenance as an excuse to hamper contact. Now, before you dismiss my thoughts on this issue please let me put a little flesh on the bones.
Firstly, if a Paying Parent (PP) is a Director of their own company, they are not self- employed, they are PAYE and are treated as such by the legislation. When the Receiving Parent (RP) makes an application in this type of case, CMS will only request P60 details. Most PPs use an accountant who will recommend that their client declares only his Lower Earning Level, this being the most tax efficient way to work and something HMRC expect.
The PP might declare a dividend but it’s the company which pays the tax so CMS in the first instance won’t use this income. This is their rule, not the PP’s rule, so it’s no good blaming the PP. To get dividends or other income included requires further action. It’s not hard but as both parents are clients of the CMS and they need to be seen as neutral, they will not initiate this: either the PP or RP needs to request this.
But what about the real self employed, the “trading as” people. The reality of child support legislation is that T/As cases are very hard to calculate. Firstly, gross trading profit is used which can include carrying forward previous losses (again this is an HMRC rule, not a PP rule) and secondly the income can be 18 months old so not necessarily reflective of the current situation. This can be seen as a problem when the PP has had a few good months and seems to be cash rich. Again, up to date income can be considered but for the same neutrality rules the CMS will not initiate a correction, it’s up to you as a parent.
The biggest gripe I hear is about outstanding arrears and their collection but in reality all that is required is a sensible enforcement plan. Again the CMS will not do this for you - it’s not their job because the legislation fixes the amount of arrears along with how they can be enforced. A sensible enforcement plan means thinking outside of the box. For instance, if you have arrears as a result of a tribunal it could be possible with the correct procedure to collect via the County Court. Alternatively, a direct approach with the other parent via a third party who knows what they are doing might work, especially if it’s a better option that what’s on the table at present.
Now you can write to your MP but after years of CSA/CMS complaints in their mail bag they now understand that in most instances CMS/CSA have done as much as they can with a case. You can go to ICE but again their powers are limited. A petition or demo will not work; there is 700K of CMS/CSA cases where there is no problem. Whether you think I’m touting for business or not, the answer remains you should go to a CSA lawyer to resolve you problem just in the say way you would go to a dentist with a tooth ache or an optician for a pair of glasses.
So before you decide to write to your MP or join the latest anti-CMS social media group, get legal advice. And yes, just like a dentist or optician, a lawyer will charge for their services but with the right advice you will see clearly and be pain free in the child maintenance department.
Our biggest facebook post last year was "How much does it cost to keep a child". In total 1666 people read the post with over 45 replies. Sadly what came across was the ignorance of many readers and their lack of understanding when it comes to costings for a child. What we tried to do was highlight the infrastructure that is needed. It's no good simply saying their is money for food, you also need a means to cook it, and a plate to eat it off. Never mind the posts is repeated below for those who want something to think about.
How much does it cost to keep a child ?
I often read the question “How much does it cost to keep a child?” “I don’t know” is the answer but in order to answer the question in a more meaningful way I think we need to establish the child’s lifestyle. So, for the purpose of the average child in the UK, let’s use this simple formula based on average monthly bills.
Rent/Mortgage Utility Bills. £750.00
Food Bill £400.00
Now let’s assume single parent family with two children so we divide this amount by three which gives us a figure of £900.00 per month for two children. To be fair we then need to split this amount between both parents i.e. £450.00 each. That gives us a monthly maintenance figure of £450.00.
1,666 people reached"
We have now received the final details of the CSA 1 and CSA 2 case closure programme. January 2015 will see the start date for segment 1 case. If you require your proposed closure details in order to prepare for a smooth transition from one scheme to another you will need to speak to our team.
From March 2015 (subject to Parliamentary approval), the Child Maintenance Service and Child Support Agency (CSA) will begin sharing certain information about the payment records of their clients with credit reference agencies.
This means that arrears built up in maintenance payments will have the same effect on people’s credit score as other debts. Having a poor credit rating can cause people to be refused loans, mortgages, credit cards, hire purchase finance arrangements, mobile phone contracts and other forms of financial credit.
Principally, information will be shared about an individual when a liability order is made against them – a measure used as a last resort after other efforts to encourage payment have been exhausted. In the year April 2013 to March 2014, 12,410 liability orders were granted.
But it is also expected that the introduction of the new measure will have a deterrent effect on those who may otherwise choose to evade maintenance payments, so getting more money flowing to the children and families who need it. Non-resident parents who have a good maintenance payment record will also be able to request that information about them is shared if they feel it may help improve their credit rating.
Child Maintenance Minister, Steve Webb MP, said: " For too long, a minority of absent parents have got away with failing to pay maintenance, leaving families without that financial support. This government is determined to take action to tackle this kind of irresponsible behaviour and support families. I would hope that we see this power used very little, because the deterrent effect of a possible negative mark on a person’s credit rating will convince those who have previously failed to pay towards their children’s upbringing to do the right thing".
While the majority of non-resident parents do contribute towards the maintenance they owe – with compliance amongst CSA clients reaching a high of 86.2% in June this year – this new measure is aimed at targeting the minority who fail to pay. It is just the latest in a catalogue of radical reforms the coalition government has made to Britain’s child maintenance system aimed at delivering fairness for families, children and taxpayers.
The changes are seeing the old CSA wound down and its replacement, the Child Maintenance Service, taking a new approach. Parents are encouraged and incentivised to co-operate in the best interests of their own children, while a vastly improved, efficient statutory service remains in place for separated families who choose to continue to rely on the state.
New support has been introduced giving families a better chance to take state bureaucracy out of their family arrangements – including the Child Maintenance Options helpline and website, and local projects around the country helping separated parents to continue to work together.
In addition, an online banking-style self-service facility has been launched allowing parents to manage their maintenance arrangements and keep track of payments. And new enforcement charges have been introduced to recoup the costs of pursuing those who continually don’t pay what they owe.
Today’s statistics on CSA3 are a reminder why parents should try and arrange their own private agreement now. The current average new case load is around 7000 cases per month, but what the statistics don’t show yet is the effect case closure will have on any case load.
What we do know is that last month the CSA wrote to 150000 PWC’s informing them that their cases will close in March 2015. Even if we assume only 40% of those parents then go on to open a case with CMS the case load will reach 177500 by the end of March 2015. Now let’s apply this number to the existing statistics.
Compliance = 40825 NRPs will not be fully compliant.
Collection Fees = 74550 Cases will be paying collection fees.
Accuracy = 12425 Cases will be using the wrong information.
If that does not persuade you to try and work it out yourself how about this. £3 million collected between now and March from application and collection fees. Parents should pay each other not the government. You can start by visiting the Footprint App HERE and working out your own arrangements.
The new statistics have been issued about the last 12 months ending Aug 2014.
Case Load. Aug 13 = 4500 - Aug 14 = 75500
Parents paying towards current liability. Aug 13 = 60% - Aug 14 = 77%
Parents using CMS collection service. Aug 14 = 42%
Parents using Direct pay. Aug 14 = 58%
Accuracy of Assessment. Aug 14 = 93%
Complaints. Aug 13 = 5 Aug 14 = 865