Child Maintenance – What Is It & What Should I Pay/Receive?
What is child maintenance?
When parents separate, the parent with whom the child does not live for the majority of the time is required to provide financial support towards the child’s everyday living costs. This support is known as child maintenance. Any child in full-time education will be eligible for child maintenance and is paid to the main carer, usually until 18 or finishing fulltime education, whichever is the later.
What should I pay/what can I expect to receive?
Child maintenance can be decided in three different ways:
1. Separated parents can arrange child maintenance between themselves if they are able to agree on a figure. Many people find the Child Maintenance Service (CMS) online calculator, see link below, a useful starting point to decide on the amount that should be paid. Such a family agreement does not need to be recorded in any official way, although it is always advisable that it is formally dealt with if the parties are married and divorcing, amongst the other elements of financial provision, in a Court Order. For unmarried parents who have separated and not going through any Court Proceedings it is always advisable to have an agreement drawn up in writing as to what is to be paid.
2. The Child Maintenance Service (CMS). The CMS is a Government body that can be used when an agreement on child maintenance cannot be reached. The CMS can do the following:
• Work out how much child maintenance should be paid, based on the paying parent’s income, the number of children, and the amount of time the child spends living with the paying parent. Calculations are based on gross income and financial information obtained directly from HMRC.
• Arrange for the paying parent to pay child maintenance.
• Pass payments to the receiving parent.
• Reassess payments where there are changes in circumstances.
• Take action if payments are not made.
The CMS has charges for using its service which is why it is always advisable to see if an agreement can be reached based on the formula applied by the CMS, but outside of the Service.
3. Court Order. The Court does not always have the power to make child maintenance payments, as that is what the CMS is for. The CMS deals with gross incomes up to £156,000 for the paying parent. A recent Court decision stated that where the income of a paying parent is up to £650,000 gross per annum the CMS formula should be used. However the Court has the power to make a “top up” Order where there is an income higher than £156,000 and these are the sort of circumstances in which the Court may well be applied to consider an Order:
• To meet private school fees or expenses in connection with education.
• If the child has expenses attributable to a disability – in such cases there is no age limit.
• If a child is resident abroad and the paying parent is resident in England and Wales.
• If a child is resident in England and Wales and the paying parent is a resident abroad (some exceptions apply).
• Top up maintenance – where the CMS has made a maintenance assessment and the paying parent’s gross income exceeds £156,000 per annum then the receiving parent can apply to the Court for extra maintenance known as top up maintenance although note the recent decision of the Court that is likely that up to £650,000 gross per income the formula will continue to apply to the paying parent as if through the CMS.
The Family Law Team at Hodge Jones & Allen can provide further information and advice if you are separating or if you wish to apply for child maintenance or are concerned about the amount you are paying.