Child maintenance explained by family lawyer

Child maintenance rules explained

When it comes to paying child maintenance to your child’s other parent, there are four different ways in which this could be done. In each case, it is important that you and the other parent stick to the agreement made to avoid any legal action.

1. Family Based Agreement: this a private agreement between the two parents, setting out how much should be paid and how frequently. However, it is important to note that this type of agreement is not legally binding, so it cannot be enforced if one party stops making payments or changes the amount.
2. Child Maintenance Service: if you and the other parent are not able to agree an amount or payment schedule, you can make an application to the Child Maintenance Service (CMS) for a formal assessment. CMS will determine the correct level of maintenance payments due and arrange the collection of all payments due.
3. Consent Order: if you and the other parent are currently going through a divorce or civil partnership dissolution, you can include any agreement on child maintenance in the court order setting out terms for finances. This is known as a consent order. Doing so would prohibit either parent from applying to CMS for one year from the date of their consent order.
4. Court Order: in cases where CMS cannot assist (listed below), the court retains the ability to determine appropriate levels of child maintenance due.

Using the Child Maintenance Service (CMS)

The parent who doesn’t have day-to-day care of a child (the ‘paying parent') will pay child maintenance to the parent or person who does (the ‘receiving parent’). Where care is shared exactly there is no child maintenance liability.

There are four rates of child maintenance. They are used with the paying parent’s income to work out a weekly amount of child maintenance. These are:

• Nil Rate: the parent who the child doesn’t live with does not have to pay child maintenance. There are various reasons why this may be the case, including the parent’s age, whether they are in receipt of certain benefits or allowances, or if they are in prison.
• Flat Rate: if the paying parent’s weekly income is between £5 and £100, or if they are in receipt of certain benefits, a flat rate of £5 per week willy apply no matter how many children are involved.
• Reduced Rate: if the paying parent’s weekly income is between £100.01 and £199.99, they will pay the flat rate (£5 per week) plus a percentage of their net weekly income.
• Basic Rate: if the paying parent has a gross weekly income of £200 or more, they will pay a percentage of their income. The exact percentage they pay will depend on how much over £200 per week they earn and is capped at £3,000 per week (any income above this will be ignored). Pension contributions may also be deducted from the gross income before the percentage is applied.

Child Maintenance Service: Calculating the basic rate

As mentioned above, if the paying parent (i.e. the parent who does not live with the child or children) earns £200 a week or more in gross income, the CMS will apply a basic rate. However, while ‘basic’ may sound simple to understand, the exact rate that is used will be determined by several different factors, including:

• the number of children needing child maintenance
• the number of nights the child or children stay with the paying parent (known as shared care)
• the number of other children the paying parent or their partner receive Child Benefit for (know as ‘relevant other children’)

Using these rules, a paying parent who earns a gross weekly income of up to £800 would pay 12% of this income for one child, 16% of two children, and 19% for three or more children.

If the income is between £800 and £3,000, the percentages reduce slightly to 9% for one child, 12% for two children, and 15% for three or more children.

Example: Imagine the paying parent has four children and earns a gross income of £40,000 per year. This would result in a calculation of £40,000 x 19%, resulting in an overall payment of £7,600. This ‘liability’ would then be split between the four children, with each receiving a quarter of the full payment.

How is responsibility for ‘relevant other children’ used to calculate child maintenance?

Where the paying parent has responsibility for ‘relevant other children’, the amount owed would be reduced. This could also include any children for whom the paying parent may owe child maintenance under another arrangement.

For instance, if the paying parent has a child with a previous partner and has agreed to pay £1,000 per year in child maintenance under a Family Based Agreement or Court Order (explained above), then the CMS will take this into account when calculating a payment for another child.

Example: The paying parent has a gross income of £40,000 per year and pays £1,000 to a child from a previous relationship under a Family Based Agreement. The CMS is calculating a payment for another child and determines an overall payment of £6,400 should be due. This is calculated using both children (£40,000 x 16%). The child receiving maintenance payments through the CMS would then be entitled to half of this (£3,200) and the child receiving payments under the Family Based Agreement would continue to receive £1,000.

How does Shared Care affect child maintenance payments?

When the paying parent looks after the child or children for whom maintenance is being paid overnight, the total amount they should pay will be reduced to reflect the shared care.

The exact discount applied is determine by how many nights the paying parent is expected to care for the child or children over a 12-month period. The CMS will first look to any agreement or court order already in place for shared care, though if none exist, they will consider the pattern from the previous 12 months.

If there is not enough evidence to determine a pattern, the CMS is entitled to make an assumption, which is usually that the child or children will spend one night a week with the paying parent. This will continue until one parent applies for an adjustment and can provide the evidence to support this.

The percentage reduction for Shared Care is determined as follows:

• fewer than 52 nights – no reduction;
• between 52 and 103 nights – 14.29%;
• between 104 and 155 nights – 28.57%;
• between 156 and 174 nights – 42.86%, and
• more than 175 nights – 50% plus £7 each week for each child.

5 steps to calculate child maintenance

1. Work out income: The CMS will determine this based on information supplied by HM Revenue & Customs, and will include any bonuses, commissions or overtime payments. Any unearned income (dividends, investments, property income, State Benefits, student grants and loans) are excluded.
2. Apply any relevant deductions: Deduct pension payments and convert yearly gross income to a weekly figure.
3. Apply Child Maintenance Rules (as above)
4. Deduce payments for any relevant other children
5. Make any percentage reductions for shared care arrangements

How can Slater and Gordon help

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We understand life’s journey does not always go as planned. If you need a solicitor on your side, our expert family law team is on hand to ensure any challenges faced become less overwhelming, so you can move forward with confidence.

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