The Child Maintenance Service (CMS) and Child Support Agency (CSA) will start sharing information regarding payment records with credit reference agencies as from next year (from March 2015, subject to Parliamentary approval). Maintenance arrears will then be considered in the detrimental way on credit scores as other debts.
Although it is planned, this will only apply to those who breach a liability order (imposed for persistent non payment of child maintenance through the CMS/CSA) it is likely to affect a significant number of parents since no fewer than around 12,400 liability orders were granted from April 2013 to March 2014.
The effect of this may well encourage separated parents to comply with liability orders since if they do not, their credit rating will be adversely affected, resulting in them being refused mortgages and other loans, credit cards, tenancy agreements and so on.
Another “plus” is that non-resident parent with a good payment record may request this information to be shared in order to improve their respective credit ratings.
In relation to CMS/CSA child maintenance assessments these only apply to “natural” children between parents, and not step children (unless they have been adopted by the parties). Assessments by the CMS depart from the previous calculation on net earnings, and are now calculated on gross taxable annual income instead (11% for one child, 14% for two, and 16% for three or more children; with a reduction depending on how many nights a week the child(ren) stay with the non-resident parent). The CSA no longer takes on new cases but will still handle cases opened before November 25, 2013. It is planned that most cases will be moved from the CSA to the CMS in due course.
The maximum the CMS take into account is £3,000 per week for the purpose of calculations. Although the Family Court does not generally have the power to make child maintenance orders the parent with care however in these circumstances has the option to apply to the family court for a “top up” of child maintenance.
An application to the CMS may be avoided however if the parties agree the level of child maintenance. This may be formalised through a child maintenance agreement, or alternatively, in divorce proceedings the Family Court has the power to make an order for child maintenance at an agreed level. Strangely enough, although the court does not have the power to set the level of child maintenance initially, it can once the order has been made go on to vary the amount paid in the future. This however may suit those who wish to avoid the CMS and potentially have more flexibility in respect of the child maintenance calculation.
Neither the CSA nor the CMS have the power to make a child maintenance assessment for step children. I find in practice that not many people realise that the Family Court in divorce proceedings has the power to make child maintenance orders however against non resident spouses, so long as the step child(ren) have been treated as “children of the family” during the marriage. Further, the Family Court also has the power to make child maintenance orders against non resident parents who live and work abroad.
Should you wish to take any advice on any of the issues raised by this article, please contact the author Anita Garside of Ringrose Law, 2 & 2a Bargate, Newark, NG1 2ES, or call 01636 594460, or email [email protected]
Anita is a specialist senior solicitor and accredited member of the Law Society Family Law Accreditation Scheme, and has specialised in family and divorce law since 1995. Anita also specialises in children’s matters, pre and post nuptial agreements, co-habitation agreements, separation agreements, property disputes between unmarried couples, and civil partnership matters.