How the CSA calculate the amount of maintenance you should pay
From 3rd March 2003 the way that child maintenance was calculated changed. For cases commenced prior to 3rd March 2003 the calculation was dealt with under an algebraic formula. Put very simply it works as follows:-
1. The CSA works out the maintenance requirement. This is the amount of maintenance they want to collect. This amounts to the total amount of income support your ex could receive were she to be in receipt of benefits. Even if your ex is not in receipt of benefits this element of the calculation is always carried out. The maintenance requirement is the cornerstone of the CSA calculation.
2. Calculating the assessable income of your ex. This is done by taking their gross, deducting Tax, NI and half pension.
3. Determining your net income. This is carried out by taking your gross income and deducting Tax, NI and half pension.
4. Calculate the exempt income of your ex. This consists of approximately 50.00 per week for her to live on, set income support allowances for the children and rent or mortgage payments on the home they live in.
5. Determine your exempt income. This is calculated by adding together your mortgage or rent on the property you live in, 50.00 per week for you to live on and income support allowance figures for any children that live with you.
6. Determine your ex’s assessable income. This is done by deducting the exempt income from the net income.
7. Determine your net income. This is done by deducting the exempt income from the net income.
8. Comparing the percentage income your ex and you have between you and calculate a reduction of the maintenance requirement. In reality in most cases the parent with care is in receipt of benefits of Child Tax or Working Tax Credit and therefore they have no income for CSA purposes. Hence therefore this part of the calculation is skipped.
9. You are then deducted a 50p in the against your assessable income until you reach a maintenance requirement figure (or the adjusted maintenance requirement figure if your ex has assessable income herself). Once the maintenance requirement figure is reached the deduction then reduces to 15p in the for one child, 20p in the for two, 25p in the for three until the remainder of your income is utilised or the maximum assessment is reached. The maximum assessment varies on a case by case basis dependant upon the number of children for whom child support is payable and their ages.
10. Work out your protected income. This is a combination of income support allowances you would receive were you in receipt of benefits together with your mortgage interest or rent (note – only mortgage interest is used in this part of the calculation – all mortgage payments are used in determining exempt income). A further 30.00 is then added to the figure and a further tolerance adjustment is applied. If this figure is higher than the maintenance determined above then the protected income figure is ignored. If this figure is lower than the figure determined above then this becomes the assessment subject to the final check.
The 30% rule says that no non-resident parent should pay more than 30% of his net pay by way of child support. Therefore if either of the above two calculations represent more than 30% of the non-resident parents income the amount of maintenance payable is reduced to 30% of his net pay.
Phew, and that is the simplified version. There are a variety of other allowances that can be made (but in most cases do not apply) some elements of income are disregarded (not many) and additional elements of protected income can also be applied. Nonetheless this is the simplest way of describing the system.
It would come as no surprise whatsoever to know that this extremely complex calculation takes a long time to carry out with huge delays and of course being so detailed there is huge scope for error. If you think your assessment is wrong call us on 03456 588683.
New Style Calculation (after 3rd March 2003)
1. Determine your income. This is your gross pay less Tax, NI and all pension scheme contributions.
2. Determine how many children live with you, your net income is then reduced by 15% for one child living with you, 20% for two and 25% for three or more.
3. Apply the basic child support calculation – 15% of net pay (after deduction for any children living with you) for one child, 20% for two and 25% for three or more.
4. Calculate and reduce by any amount of shared care. Shared care is calculated by determining the number of nights for any of the children for whom you are paying child support stays with you. If one of your children stays with you below 52 nights per annum (less than 1 night per week) the amount of child support is unchanged. If the amount of contact is between 52 and 103 nights per annum (1 to 2 nights per week) child support is reduced by one-seventh. If the child stays with you between 104 to 155 nights per annum the amount of child support is reduced by two-sevenths, if the contact amounts between 156 and 174 nights per annum the figure is reduced the three-sevenths. Contact in excess of 175 nights per annum reduces the child support figure by 50% since in effect the child spends as much time with you as with the parent with care. Furthermore in that kind of case an additional 7.00 for each child for whom you are paying child support is deducted provided they qualify by staying with you in excess of 175 nights per annum.
What should be noted here is that the new system does not include any enquiry into parent with cares earnings or indeed (if you have one) your current partners earnings. Furthermore, all children that live with you are taken into account, even if you are not the natural non-resident parent, for instance if they are your stepchildren.
Theoretically in most cases these calculations should be very simple, if you are living on your own you will pay 15% for one child, 20% for two and 25% for three or more. Complications arise where there is shared care, another child living with you or where you have more than one child by more than one ex, most particularly if you see the different children by different mothers for different periods of time qualifying therefore for different elements of shared care.
Child Support Solutions specialises in helping resident and non-resident parents who are having problems with the
Child Support Agency or who need general advice and support relating to issues with the CSA.