New CS2 System & Phasing

On March 3rd, 2003, "Child Support 2" was introduced. Durham Legal Services can assist both sets of parents with the new legislation and its effects on present Maintenance Assessments and future Maintenance calculations.

Durham Legal Services can offer individuals expert advice on CS2, which includes the following:

Help and assistance for people who are self-employed.
Assistance with New Variation Orders (formerly Departure Directions)
Assistance with Voluntary Maintenance Payments pending formal Maintenance Calculations.
Help and assistance for people with linked cases (old and new system)
Help and assistance on legal matters relating to enforcement procedures.
Assistance with Appeals and Tribunals Hearings.

Child Support Scheme 2

In March 2003, the new Child Support Scheme was introduced to fetch in a simple percentage system. Although anything that makes the system easier to understand is to be welcomed, problems are occurring.

One problem with the new Department of Works and Pensions computer system has resulted in many applications being lost or misplaced. People who have sent in applications and believe that the processing is just slow are finding their papers have actually been lost. Many are becoming frustrated and angry by the delays and financial hardship caused. As there is no requirement to the NRP to pay maintenance until they receive the enquiry form from the CSA, families in need of support are finding themselves without maintenance for months on end.

Other people are finding that their new assessment is not always appropriate and applying for a variation order to increase or decrease a payment. People trying to obtain a Variation Order are being met with a complicated process.

Phasing and Child Support Scheme 2

Once the new System goes live and all existing cases are transferred, it could be a number of years before many individuals see the benefit of CS2. When introducing the new act, the government had concerns about Maintenance Dependency. Maintenance Dependency is where the individual receiving the maintenance has committed the existing maintenance calculation to financial issues without the forethought of realising that payments can go down as well.

How phasing will Work
Phasing will apply if the difference in child maintenance is more than the phasing amount of £2.50, £5 or £10.

£2.50 if the NRP's net weekly income is less than £100.00

£5.00 if the NRP's net weekly income is more than £100.00 but less than £400.00.

£10.00 if the NRP's net weekly income is £400.00 or more.

If phasing is applicable, the weekly amount due will increase or decrease in fixed annual steps. Phasing will last for a maximum of five years or until the new payment is reached, whichever is sooner.

Example:
John pays £75.00 for three children under old case rules. He has a net income of £250.00. Under the new rules he would pay 25%, which is £63.00 per week, for a difference of £12.00. As John's income is more than £100.00 but less than £400.00, phasing at the £5.00 rate will apply.

Year one: John will pay £70.00
Year two: John will pay £65.00
Year three: John will pay £63.00

Bob is paying £35.00 for two children on the old case rules. His income is £220.00, which means his payments will increase to £44.00 (20% of his income). Again the phased amount will be £5.00 as the income is more than £100.00 and less than £400.00.

Year one: Bob will pay £40.00
Year two: Bob will pay £44.00

One of the real problems will be the middle income earners who will see a large reduction in maintenance under the new rules.

John pays £89.00 per week for one child based on an income of £350.00 per week. Under case rules his stepchildren are now included and his new liability will be reduced to £36.00 when shared care is included. Phasing will apply at the £5.00 rate.

Year one: John will pay £84.00
Year two: John will pay £79.00
Year three: John will pay £74.00
Year four: John will pay £69.00
Year five: John will pay £36.00

In total. John will pay an extra £8424.00 over the phasing period than that which he was assessed to pay.

If you feel that you are a middle income earner like John you will see a large reduction in your payments, contact us about ways to save money during phasing.