As the situation around the Covid-19 pandemic develops, a lot of people who have been furloughed will be now waiting to hear from their employers about when they can return to work.
We take a look at how the furlough scheme impacts parents using the child maintenance scheme and those making maintenance payments.
What is the furlough scheme?
Being furloughed means an employee is retained on their employer’s payroll even though they are not working. The scheme helps to temporarily 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 £2,500 per person, per month before tax. The employer can choose to “top up” an employee’s pay if they want 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 in the near future.
How does this affect 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 difference in income breaches a 25% tolerance. If your income reduces by 25% or more as a result of being furloughed, you’ll need to inform the CMS within 14 days.
If you’re self-employed, you do not need to inform the CMS of a change in income. Therefore, being furloughed will not mean that 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.
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 that informal agreements are not binding. Therefore, it’s essential to keep the channels of communication open with the other parent and try to agree on a lower level of maintenance in the interim. You can decide to resume the original level of support 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 to achieve the best outcome for your children.