Old style Calculation Method (Prior to 3rd March 2003)
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 you could receive were you to be in receipt of benefits. Even if you are 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 your assessable income. This is done by taking your gross income, deducting Tax, NI and half pension.
3. Determining the net income of your ex. This is carried out by taking their gross income and deducting Tax, NI and half pension.
4. Calculate your exempt income. This consists of approximately £50.00 per week for you to live on, set income support allowances for the children and rent or mortgage payments on the home you live in.
5. Determine your ex's exempt income. This is calculated by adding together your ex's mortgage or rent on the property he lives in, £50.00 per week for him to live on and income support allowance figures for any children that live with him.
6. Determine your assessable income. This is done by deducting the exempt income from the net income.
7. Determine your ex's assessable income. This is done by deducting the exempt income from the net income.
8. Comparing the percentage income you and your ex 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 or 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. Your ex is then deducted at 50p in the £ against his assessable income until he reaches a maintenance requirement figure (or the adjusted maintenance requirement figure if you have assessable income yourself). 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 the non-resident parents 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 the your ex's protected income. This is a combination of income support allowances he would receive were he in receipt of benefits together with his 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)
All applications commenced after the 3rd March 2003 are dealt with under the new child support scheme. This scheme is much simpler than the old calculation method but is still by no means easy.
Under the new scheme child support payable by the father is calculated as follows:-
Determine the father's net income. This is gross pay, less Tax, NI and all pension scheme contributions.
1. Determine how many children live with the father. Net income is then reduced by 15% for one child living with the father, 20% for two, 25% for three or more.
2. Apply the basic child support calculation. 15% of net pay (after deduction for any children living with the father) for one child, 20% for two, 25% for three or more.
3. Calculate and reduce by any amount of shared care. Shared care is calculated by determining the number of nights your child stays with their father. If a child stays with their father below 52 nights per annum (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 night per week) child support reduced by one-seventh. If the child stays with the father between 104 and 155 nights per annum the amount of child support is reduced by two-sevenths. If the contact amounts to between 156 and 174 nights per annum (three nights per week) the child support is reduced by 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 the father as it does with the parent with care. Furthermore, in those cases an extra sum of £7.00 for each of your children that stays overnight with their father in excess of 175 nights per annum is deducted.
You should note that the new system does not include any enquiry into your earnings or indeed the fathers partners earnings. Furthermore all children that live with the father are taken into account, even if he is not the natural father of those children and even if their natural father is paying child support.
In most cases it would be simple, a father living on his own would pay 15% for one child, 20% for two, 25% if he has three or more. If he has more than one child by more than one mother with whom he does not live then the amount payable is determined by the percentage and divided equally between the mothers concerned. For instance a father earning £300.00 per week with three children, two by mother (A) and one by mother (B) would pay £75.00 per week. Mother (A) having two children would receive £50.00 of that, mother (B) would receive £25.00.