If your case has now moved over from the Child Support Agency to the Child MaintenanceService and you have seen a huge decrease in payments, the likelihood is that all of the correct information needed to make the proper assessment has not been picked up by the Child Maintenance Service via HMRC income records. It could also be an old Departure Direction or Variation Order attached to your previous assessment has now been cancelled and you will need to start the process again.
The rules around what is and what is not allowed under the 2012 Variation Scheme are very complex and you should speak to a member of the team about the long term effects on your case in light of the new 25% tolerance rules. In addition, there is also a new system in retrospective assessments based on a failure to disclose information to consider.
The 25% tolerance rule alone is enough to merit a full case assessment check. The introduction of this rule not only stops regular changes of circumstances but also, if you fail to deal with this rule at the beginning of your case, it will affect how your case is assessed for years to come.
The new CMS system has a number of major flaws that effect the amount of child maintenance you will receive. For instance a Director of a company is not self- employed, they are an employee of the company and their salary is reported and recorded via the new HMRC real time system and a P60 raised at the end of every tax year.
Any dividends received along with PAYE income do not appear on the P60. Further, dividends are declared at the end of the company’s accounting period which might not be in April but in any event they are recorded on a self assessment return which is not due until 31st January of the following year and there lies the problem.
Because the two sources of the same year’s earnings are not aligned, the paying parent’s true income is never used. This can give a impression there is “a rat off” somewhere and often leads to problems of mistrust and allegations of hiding income. If we then add the 25% income tolerance rule the reality is you will never get the correct maintenance payment because the wrong income figure has been used every time.
When a receiving parent speaks to the CMS about this type of situation they are often misinformed by their case worker that the Paying Parent is to blame which is not necessarily the case.
The above are just a few of the problems you will encounter when the paying Parent is either self-employed or a Director. For this reason we strongly recommend prior to making an application for child maintenance you speak to Durham Legal Services.
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