2 CSA Cases

fannyanna

gratefulforhelp wrote: »

I don't know the answers mum24boys but I suspect b. she will go after the person with the income.

So the CS amount has been dropped from 15% to 12% for one child? Do we know the rationale for that?

It's 15% of net income changing to 12% gross income so it works out roughly the same.

gratefulforhelp_2

Thanks, fannyanna *smiley face*is that to stop NRPs stashing loads of salary away in pensions and so on?

mrsspendalot

gratefulforhelp wrote: »

Thanks, fannyanna *smiley face*is that to stop NRPs stashing loads of salary away in pensions and so on?

Yes, I think so. There is currently nothing to stop an NRP putting all their income into a pension if they want to, so it is a big loophole. Pension contributions will be allowed under the new system, but only if deemed reasonable. How they will decide what is reasonable is an unknown. I guess occupational pension contributions will be the easiest to have allowed as an NRP, as you can prove what your employer asks of you to contribute as part of the pension scheme. It will probably then be any AVCs that they don't allow, as that is extra paid in by choice.

RedSky

If the gross system is 12%, 16% and 19% of gross earnings for 1, 2 or 3 children and changes of less than 25% will not affect CM liability during the 12 month assessment period then, in some situations, when an NRP has further children and their gross earnings are reduced accordingly, the new system suggests it will not change the CM liability for up to 12 months e.g.

£1000 gross earnings, 1 child = £120 CM
NRP has a child so gross earnings reduced by 12% to £880
£880 gross earnings, 1 child = £105 CM

£120 to £105 is around 12.5% difference and under the 25% threshold