Child Maintenance during Covid-19
Posted on 23rd June 2020
As the nation eagerly awaits the Governments further easing of lockdown measures later this week, a lot of people who have been furloughed will be awaiting to hear from their employers about when they can return to work.
Many people have faced hardship during the current pandemic, whether it be personal, emotional and/or financial.
Being furloughed means an employee is retained on their employer’s payroll even though they are not working. The scheme is designed to temporarily help pay the wages of employees who cannot do their jobs and to help companies retain them during this crisis.
Employers can claim 80% of their employees’ wages from the government up to a maximum of £2500 per person, per month before tax. The employer can choose to “top up” an employees pay if it chooses to, but there is no obligation to do so.
The furloughing scheme was introduced on 1 March 2020 and will end later this October. In reality this means that a lot of people who have been furloughed will be on a reduced income, some may have been made redundant in the interim or redundancy may be a real prospect facing some.
How does this effect people who have been furloughed and use the Child Maintenance Scheme (CMS)?
If you use the CMS to calculate child maintenance using the 2012 scheme and your circumstances have changed, such as a reduction of earnings, the maintenance calculation may need to be reviewed.
However, the CMS will not action a change of circumstances review, unless the change in income breaches a 25% tolerance. If your income reduces by 25% or more, the paying parent is obliged to inform the CMS within 14 days.
If you are self-employed you do not need to inform the CMS of a change in income.
Notably, all paying parents are entitled to an annual review of payments.
Therefore, being furloughed will not mean that as a paying parent you are automatically entitled to have your child maintenance recalculated. Those who receive 80% furlough payments will be expected to pay child maintenance in full. In such circumstances if the paying parent is refusing to do so, the CMS can take steps to take the money directly from their earnings or their bank.
If the CMS is not involved and you have an informal agreement in place and the paying parent, tells you that they can no longer afford to pay the maintenance at the agreed level due to a reduction in income, what should you do?
Bear in mind, informal agreements are not binding therefore, it’s important to keep the channels of communication open with the other parent and try to agree a lower level of maintenance in the interim. You can agree to resume the original level of maintenance once the income position returns to normal.
Above all, try and remember that these are unprecedented times, try and be sensitive to each other’s circumstances with a view to achieving the best outcome for your children.