Untangling your finances

The government-run Child Maintenance System is very complex. Our strong recommendation is that parents should take specialist legal advice before embarking on their discussions. FLiP director James Pirrie is a leading expert in this area and will provide support, guidance and expert advice on your rights and obligations. 

Briefly, Parliament established a government agency, the Child Support Agency (“CSA”) now the Child Maintenance Service (“CMS”),  to decide what level of maintenance should be paid from one separated parent to another for the support of their children. 

Parents only have responsibilities and entitlements under the CMS system where a 5-fold test is passed, involving:

• Geographical restrictions: all parties are in the UK (with some limited exceptions)
• Age and stage: very roughly, the child is below A-level stage
• Parentage: the child is the natural or adopted child of them both
• Separation: the parties have separated (without which there cannot be a non-resident parent (“NRP”) and without a NRP, there is no jurisdiction)
• Order: a maintenance order from the Court is likely to exclude the jurisdiction of the CSA/CMS until the court order is 12 months’ old.

Where one or more of these requirements is not met then if there is a maintenance obligation it is likely to be the Court that will decide it. The Court also has responsibility for deciding whether payments should be made for:

• The costs of disability where the child qualifies for Disability Living Allowance
• Educational costs; or
• To top up the award because the NRP earns more than £156,000 gross per annum.

The parent who has care of the child to a greater extent than the other parent becomes the parent with care (“PWC”) and can claim provision from the NRP. The formula defining the level of payment is operated by the CMS. Further information about the statutory child maintenance service can be found here.

The Government has published a calculator to help parents to estimate the cost of child maintenance. At FLiP we have developed our own calculator which we use to calculate our clients’ responsibilities and entitlements with data including:

Income

The gross income of the NRP is taken into account. This is likely to be taken from the last tax return. It looks only at earned income (but an application can be made to include un-earned income too).

An application can be made to increase the income to a figure to reflect the higher income that the NRP could be earning if s/he were not diverting that income away. There are various limited applications that can be made to reduce the income eg. to reflect school fees or the costs of contact:

Pension

The formula deducts payments made into a pension, for example, the monthly net contribution made to a defined contribution scheme.

Other children

Children, broadly pre A level children, in the NRP’s household are taken into account.

Overnight Stays

The number of overnight stays with the NRP will affect the payment calculation too. There is some dispute as to how the CMS formula applies where the NRP earns more than £156,000 pa. In the case of Re TW & TM (Minors) 2015 EWHC 3054 (Fam) Mostyn J said:“In my opinion the formula should apply even where the earnings of the father are in excess of the £3000 per week maximum provided for in the Act and the Regulations (emphasis added). If the earnings of the father were very much in excess of that then there would be a good reason to depart from the formula downwards, but if the income of the father is not un-adjacent to the maximum then to my mind, subject to other factors, that of itself is not a good reason to depart from the formula.”

Court orders for maintenance for children can only be made:

• Where the CMS has no power to undertake an assessment
• Where the parties agree; or
• Where the orders are for educational costs, disability costs or to top up a maximum award.

This will also mean that where children are approaching university, the Court recovers jurisdiction to determine support that may be paid:

• To the child directly (for university fees or by way of support to meet accommodation or living expenses); and
• As a contribution to the additional costs faced by the parent providing the child with their home base.

Where a Court order is made for financial provision for a child, the Court will take into account a number of considerations including the financial resources of each parent, the financial responsibilities and needs of each parent and the needs of the child.

You may find the following links useful:

Child maintenance calculator

Child Maintenance Service

Child Maintenance Options

Questions that clients commonly ask about financial support for their children include:

My ex-husband and I are on fairly good speaking terms when it comes to our children. Do we have to involve the Court to determine how much my ex-husband should pay for child maintenance?

No, you do not have to involve the Court or the CMS. In an ideal world, you and your ex-husband will be able to agree the level of maintenance to be paid yourselves. You may wish to use the CMS calculator as a guide as to the amount and, as the receiving party, you may wish to prepare a budget of monthly expenditure for the children and share this with the paying parent. Entering into, what is known as a Family Based Arrangement such as this ensures that both parents remain in control and allows flexibility within the overall agreement.

When does the CMS have jurisdiction?

In order for the CMS to make an assessment please see the 5 fold test above.

If there is a Court order for child maintenance then jurisdiction is likely to be excluded for 12 months from the date of the order (but no longer). Remember that the CMS calculation will only take into account a gross income of the NRP up to £3,000 per week. If their gross income exceeds this, the PWC should make an application to the Court.

Why might I make an application to the Court instead of going to the CMS?

If for whatever reason, the CMS no longer has the power to undertake an assessment as the criteria above are not met or you wish to make an application for a capital sum, then you can make an application to the Court. For example, you may need to replace a car which you use to take your children to school and you don’t have sufficient resources to pay for this yourself.

What happens if my ex-husband keeps missing payments or has stopped paying altogether?

Whether payment is being made pursuant to a CMS calculation or under a Court order, you will have an option as to how to recover the sums owed to you. If the CMS has arranged the payments then you should contact the CMS and provide the service with details about any missed payments. If payment is made through the collection service, then this should be actioned promptly and you should raise a complaint if the CMS is not taking prompt action. If there is a Court order in place, you can apply to the Court for enforcement of the Court order. Again, you will need to provide details of all the payments which are owed to you together with a calculation of any interest to be paid.

Our talented team of family lawyers will deliver exceptional expertise on your rights and obligations and will work with you to find long-lasting solutions. FLiP director James Pirrie is a leading expert in this field, and has given evidence on the CMS system to the House of Commons Public Accounts Committee. James and his team will work by your side to secure the best financial settlement for you and your children.