Yahoo Finance How child maintenance payments work in the UK
The financial aspect of raising children is the responsibility of both parents, which is why child maintenance payments are key to making sure that they’re provided for when parents aren’t together.
What you’re required to pay may be set out as part of a divorce agreement, or can be agreed privately.
You can do this yourself, or use the government Child Maintenance Service.
Here, Telegraph Money explains how much child maintenance should be, and what your options are if you’re struggling to keep up with the payments.
What is child maintenance?
Child maintenance payments are a legal requirement designed to make sure that both parents contribute to the upbringing of their children, even when living separately.
The payments are usually paid to the parent who looks after the child or children for the majority of the time, and should continue until the child leaves school, secondary education or an equivalent eligible vocational training course up to the age of 20.
Payments can of course continue past this age, should the parents agree.
The money is meant to help cover everyday living costs including housing, food, clothing and school uniforms as well as extracurricular activities.
Child maintenance payments should be made regardless of whether the parents were married, and even if they have never been in a relationship.
The payments are required whether or not the non-resident parent sees the child or children.
How do you decide on paying child maintenance?
Child maintenance can be either a private arrangement between parents as an informal agreement or part of a financial agreement in a divorce.
Alternatively, it can be made through the Child Maintenance Service (CMS) – a government scheme – which will set the level and enforce payments if necessary.
Caroline Keeley, partner and head of family law at TWM, said: “It’s much better if parents can agree on a level of child maintenance between them as part of their divorce agreement.
“The CMS isn’t easy to deal with as things can move slowly and often couples are keen to come to an agreement so they can move forward.
“However, if an amount can’t be agreed upon between both parents then you can turn to the CMS to make a calculation which will become a legal obligation.
“For parents who aren’t married, an agreement can be made for child maintenance payments, but it won’t be enforceable by law. For it to be legally enforceable they would need to go through the CMS.”
Child maintenance can also be built into “spousal maintenance payments” as part of a financial agreement in a divorce.
Spousal maintenance usually arises where one partner has a much lower income than the other, or where one partner has not worked for some or all of the marriage and are financially dependent on their ex-spouse.
Child maintenance is obligatory whereas spousal maintenance is discretionary.
Spousal maintenance and child maintenance can be paid together and collectively known as “global maintenance”.
How much child maintenance should you pay?
The amount of maintenance you pay depends on your gross income (minus pension contributions), the number of children, the number of nights spent with the non-resident parent, and your average weekly wages.
The calculation will also factor in any other children in the household of the parent paying the maintenance, such as new biological children or stepchildren.
Even if you’re not officially using the CMS to agree on how much to pay, you can still use its website to help with setting a fair level of child maintenance.
There’s an online calculator which will generate a figure in accordance with how it would formally assess your circumstances.
For example, say a parent earning £50,000 has two children who stay with them two nights per week. The calculator estimates a child maintenance payment of £545.74 a month, split equally for each child.
Note that the figure the calculator arrives at is just an estimate; should you go through the CMS system there may be further questions that affect how much you’ll be told to pay.
Should you go to the CMS you will need to submit information and, if necessary, it can get information on earnings (where it’s not forthcoming) from HM Revenue & Customs to set a level.
Ms Keeley said: “You can challenge the level set as long as you can provide evidence to back up if you feel it’s been based on incorrect earnings and set too high, for example.”
Can you reduce child maintenance payments?
As time moves on the situation of the parent paying maintenance can change.
As well as salary increases as you climb the career ladder, you might experience a reduction in income – perhaps if you take a job with a pay cut or if you decide to go back to full-time education as part of a career break or sabbatical.
If you do find your income drops, you might feel that it’s fair to adjust the amount you contribute, and pay less towards child maintenance.
You can apply to amend an amount agreed in a financial agreement as part of a divorce, though only once 12 months has passed since the agreement was sealed by a court.
To make any changes to a court order an application will need to be made to the Court for variation.
If your payments have been set by the CMS, then the level of child maintenance is automatically reviewed every 12 months so you can submit changes to your income at this point of review.
You cannot ask for a review in the interim unless your income drops by 25pc or more.
If global maintenance is being paid it’s still possible to challenge the amount of child maintenance but it won’t reduce the overall payments.
Ms Keeley said: “In a case where global maintenance is agreed in a financial agreement in a divorce, if the child maintenance portion is challenged by way of an application to the CMS, the spousal element adjusts accordingly so that the amount paid doesn’t change.
“This encourages both parties to stick with the agreed amount.”
What happens if you fail to pay?
Where there’s a court stamp on child maintenance payments in a financial agreement as part of a divorce, if payments aren’t made, arrears begin to build up.
You can be summoned back to court and an order can be made to repay the amounts outstanding and continue payments again.
This will of course incur legal fees.
If payments ordered by the CMS don’t materialise then the would-be recipient can report this and the CMS can collect the amount directly from the wages of the parent obliged to pay.
The CMS also has the power to access the money straight out of a bank account to obtain the funds.
Where necessary, the CMS can collect and pass on payments monthly, to ensure payment is made.
However, for this service – called Collect and Pay – there are fees of 20pc (which is added to the payment) for paying parents and 4pc (which is taken off the payment) for receiving parents.
Ms Keeley added: “Where parents have simply agreed child maintenance payments between them, with no formal court order, payments are not enforceable.
“In this instance the parent who hasn’t received their maintenance payments can make an application to the CMS for an assessment to be made.
“Any payments ordered by the CMS won’t be backdated to when they stopped, however – only to the date the application was made.”
