Setting Up a Private Arrangement (Any Drawbacks?)

Pr0f_2

Hi.

I recently found out I'm a father. The baby was with a partner I had not seen for around a year and the baby is a few months old. Paternity test results are just round the corner now which I'm confident are going to prove the baby is mine.

Having a child now was something I never intended, but I'm not one to shy away from fact it has happened and I want to support him as much as I can. Arranging maintenance just seems like a bit of a minefield right now but I'm slowly ploughing through it. The mother of the baby has said to me she does not expect anything of me other than to be a Dad. I of course want my child to be as well looked after as possible though, so aside from seeing him whenever I can, I want to be able to provide financially for him now and for his future.

I'm working a notice at my current job at present and will be unemployed soon. It is likely that for the foreseeable I'm going to be freelancing and therefore will never have a fixed monthly income. The mother is claiming benefits at the moment as she is in full time care of the child. On researching this scenario, my immediate concern was that because she was on benefits, the CSA would intervene and look for the father of the child (me) after a specified period and then backdate arrears since the child's birth.. Despite me never originally knowing he existed. However, discussing this with CM Options I have discovered this is not the case.

The mother and I are both on good terms at the moment and I see no reason why a private arrangement wouldn't work. Since I am soon to be unemployed, I have come to the conclusion that if I pay £20 a week to begin with, this amount is on the threshold whereby her benefits won't be affected by these regular payments from me. I have also been told that from April, private arrangement payments will not affect benefit payments whatsoever. This means I could effectively raise my payments if in a position to do so then and ensure that no money is 'lost' so to speak between state payments and my maintenance payments.

Can anyone see any drawbacks to what I've said? I'm trying to plan for any outcome really. I WILL always pay maintenance so it is unlikely the arrangement would ever break down. I could only envisage that it might if my relationship deteriorated over time with the mother and she thought that she could get more money from me through going through the CSA if for whatever reason I wasn't paying 15% privately?

I guess my confusion comes in how this all ties in with benefits. Under our circumstances now, it is my understanding that I can pay £80/month and she will still receive her benefits as she does now but be better off thanks to my maintenance payment with a private arrangement. However, if I went through the CSA now she would receive the same amount she does now up until I hit the the threshold of earning that her benefits are in line with and my money would be going straight to the CSA?

Hope that makes sense. Any advice is appreciated as it all feels so very complicated to get my head round!

shell_542

I would do as you have proposed, personally. Offer to sort out a standing order of £80 a month into a bank account for her and label it clearly as "child maintenance for (child's name)"

This will not affect her benefits. You can also contribute in other ways as you see fit (and can afford) to the child, like supplying nappies/clothes/formula (if necessary). Also once a relationship is built up with the baby, he may start staying with you for longer periods and you will be contributing to his upkeep financially then as well, with food when he's with you and any other things he needs.

After the rules change in April (I think the 12th I read on another forum) you can amend how much you pay directly to the mother without any increase affecting her benefits.

As long as she is happy for you to do this, it sounds like it will work OK.

Good luck.

pd001

shell_542 wrote: »

I would do as you have proposed, personally. Offer to sort out a standing order of £80 a month into a bank account for her and label it clearly as "child maintenance for (child's name)"
Good luck.

Not quite sufficient I m afraid.
Any payment made to a pwc MUST be fully documented.

By that I mean you should make sure that there cannot be any misunderstanding what the payments are actually for in the future.

You should also
send a letter to the PWC, by recorded delivery only, when each payment is taken from your account, to the effect that the payment is specifically made to support your child (ren).
edit...You should also name the child (ren) that the payment is for.
edit...The letter has to state that the money is for child maintenance and it must also stipulate for what period

Keep copies of these letters, DO NOT LOSE THEM!

DO NOT make cash payments!

Thanks to kelloggs36 who posts on here for some of the above information

shell_542

What is the letter going to prove though? Yes, you can keep a copy of the letters you sent and you will have a stub showing a recorded delivery item was sent. But the PWC could turn around and say that the letters being sent were nothing to do with child maintenance.

Seriously, while a CSA case is not open, the CSA don't care how much or little a NRP has paid. Especially now a days as a PWC on benefits doesn't HAVE to have a CSA case open.

We do what I advised. There is a written note in MY bank account showing payments made regularly on one day a month titled CHILD SUPPORT FOR (H's daughters name).

The only way you could possibly end up in trouble would be if the PWC contacted the CSA to open a case without telling the NRP and the CSA sent a letter to the NRP which didn't get to him/her. Arrears would be racking up while the NRP was paying child support direct to the PWC, unaware that the CSA case was running.

If you wanted to keep a record with the PWC every month of the payments being received, I would have thought it would have been a better idea to email and ask them if they had received it (detailing all of the above, "have you received the child support payment for (child's name) to the amount of £?? on (the date)?". Then when they reply saying "YES" you will have a screen shot you can print off for evidence.

The times it can all go bottoms up, is when there is a CSA case open in the background and the NRP is paying direct to the PWC. The PWC could turn around and say they've not received anything and only then would the CSA do something about it. Not if there is no case open though, as in the OP.

pd001

shell_542 wrote: »

What is the letter going to prove though? Yes, you can keep a copy of the letters you sent and you will have a stub showing a recorded delivery item was sent. But the PWC could turn around and say that the letters being sent were nothing to do with child maintenance.

Seriously, while a CSA case is not open, the CSA don't care how much or little a NRP has paid. Especially now a days as a PWC on benefits doesn't HAVE to have a CSA case open.

We do what I advised. There is a written note in MY bank account showing payments made regularly on one day a month titled CHILD SUPPORT FOR (H's daughters name).

The only way you could possibly end up in trouble would be if the PWC contacted the CSA to open a case without telling the NRP and the CSA sent a letter to the NRP which didn't get to him/her. Arrears would be racking up while the NRP was paying child support direct to the PWC, unaware that the CSA case was running.

If you wanted to keep a record with the PWC every month of the payments being received, I would have thought it would have been a better idea to email and ask them if they had received it (detailing all of the above, "have you received the child support payment for (child's name) to the amount of £?? on (the date)?". Then when they reply saying "YES" you will have a screen shot you can print off for evidence.

The times it can all go bottoms up, is when there is a CSA case open in the background and the NRP is paying direct to the PWC. The PWC could turn around and say they've not received anything and only then would the CSA do something about it. Not if there is no case open though, as in the OP.

The information that I posted regarding documented payments has been put together by gleaning information that others have posted on this forum.

Kelloggs36, as you may know, used to work for the csa and she has also posted on this subject in the past which is why I always give her credit when I post information regarding payment documentation.

You also stated,
'The only way you could possibly end up in trouble would be if the PWC contacted the CSA to open a case without telling the NRP and the CSA sent a letter to the NRP which didn't get to him/her. Arrears would be racking up while the NRP was paying child support direct to the PWC, unaware that the CSA case was running.'

Been there! Done that! Got the T shirt!...which is why I am so vociferous about all payments to a pwc being properly documented.
Just so that you are aware, I could not prove that I had paid a single penny to the pwc even though the pwc has had an awful lot of undocumented CASH over the years.

I was not aware that payments had to be fully documented....

The OP asked for possible drawbacks in setting up a private arrangement.
If payments are made but not properly documented, and if there is a CSA case running in the background, the drawback is that the OP may have to pay twice.
Admittedly paying through a bank is a much better way than paying cash..... which was my downfall.

shell_542

I understand that. That's why it is good that the OP has asked before setting up a private agreement.

I was just wondering what a recorded delivery slip proves, tis all.

There is a smaller chance of things going wrong if there is no CSA involvement whatsoever in the background.

Pr0f_2

Thanks for the advice so far guys. Your responses kind of emphasise the problems I've had so far when seeking advice though; the water is very cloudy in parts with how you should go about things properly.

I kind of agree that a Recorded Delivery stub may prove very little if push comes to shove, although I completely understand why this arrangement would be necessary for cash payments. My payments will always be made via standing order and I take on board the advice of labelling as to avoid any dispute. What I also intend to do is download and sign the Private Agreement Form found on https://www.cmoptions.org. It's not legally binding but it does represent intent of an agreement between parents. Alongside a standing order for the amount stated on this form labelled "CHILD MAINTENANCE FOR [CHILD]" I struggle to see how anyone could dispute those payments are not what they appear to me.

It's a bit mad that the CSA come across as extremely harsh and incompetent. Prior to finding out today that they wouldn't come hunting for me automatically and that private agreements as described are possible, I was going to go through them to sort it for me. I never realised that you could in fact set up a private agreement at under 15% without it being scrutinised by them. I guess the problem lies when these agreements break down and arrears come into play?

I also have read that in a couple of years, CSA payments are going to be based on gross income and not net. How is this going to effect people? Will NRP's be forced to pay more because it doesn't account for taxes? I'm a bit baffled why they have gone down that route and how it is going to work? Hopefully I never find myself in a position where I'd need to deal with it, but it'd be good if someone could shed some light on what they've got planned?

speedster

just set up the SO "labelled child support for ******"

that's proof enough. also, it seems as you and the ex are mature and reasonable enough to sort this out without the dribbling gimps at the csa poking their noses in.

shell_542

Prof, yeah they are changing it to gross pay. The percentages they take will be slightly lower but I worked out we would still be expected to pay more on the gross pay calculation than the current net one, even though our income stays the same. Seems like a way to just up everyones child supprt..

Donedoingdebt

Pr0f wrote: »

I also have read that in a couple of years, CSA payments are going to be based on gross income and not net. How is this going to effect people? Will NRP's be forced to pay more because it doesn't account for taxes? I'm a bit baffled why they have gone down that route and how it is going to work? Hopefully I never find myself in a position where I'd need to deal with it, but it'd be good if someone could shed some light on what they've got planned?

The new assessments are due to be based on 12%, 16% & I'm not sure of the other one, so I'll assume 20% of gross pay.

These will be based on the previous year's P60 & not 2 most recent payslips as is currently the case.

You will not be able to ask for a reassessment until the next year's assessment unless your gross pay changes by at least 25%.

According to CMEC's website, this change is due to take place "From 2011".

One of the reasons stated for this change is that currently, some NRP's are moving a large proportion of their pay into pension schemes & therefore, lowering the amount available for the CSA to make an assessment. Basing the assessment on gross pay should supposedly stop this practise.

shell_542

You don't need to take a 25% pay cut for it to affect your finances severely. Its bloody stupid (IMO). As usual, the compliant NRPs are shafted because some NRPs out there are idiots and play the system.

They should base it on your take home every month. Yeah it would be a pain in the backside to regulate but its fairer. So unless the PWC will be racking up overpayments during the year (very inlikely) an NRP could earn £20000 last year and in April take a paycut to £16000. They'll lose money but still have to pay the higher percentage figure to thhe PWC.

It also works the other way around, with the NRP earning more, but unless over 25% more, the PWC will see no increase. Seems like a daft system to me.