I mentioned the publication of the Child Maintenance and Other Payments Bill in a post last week. I've now had a chance to look at it. There are a number of provisions that I will no doubt comment upon in due course, but for now I'll concentrate upon the proposed new basis for calculating maintenance liability. Instead of the old basis of the net income of the non-resident parent (NRP), it is proposed that in future gross income should be used - see section 16 and Schedule 4. The aim here seems to be to reduce the opportunities for that parent to 'play with the figures', and also to speed up assessment. This seems to me to be a very sensible proposal (I never thought I'd hear myself saying that), although whether it will result in unfairness to the paying parent remains to be seen, particularly where he or she has high pension contributions (which are currently taken into account when calculating net income).
Of course, using gross figures will mean that the percentages of income to be paid will have to be reduced. The 'basic rate' figures change from 15% to 12% for one qualifying child, from 20% to 16% for two and from 25% to 19% for three. The rates reduce still further (to 9%, 12% and 15%) if the NRP's gross weekly income exceeds £800, presumably to take into account higher rates of income tax. I've made some rough calculations and it seems to me that the new percentages will result in higher maintenance liability than under the present scheme, even assuming no pension contributions are paid by the NRP. If I'm right, then many NRP's are in for an anxious wait to see if the Bill makes it on to the statute book.