When you separate, you have so many competing things to think about, particularly if children are involved. Child maintenance, or child support, is a payment made by one parent to the other to cover everyday living costs. But at what point is this calculated and what is the formula used? What type of income is included in a calculation and do other types of asset affect the award made? In this article, we answer all these questions and more.
When is the best time to calculate child maintenance?
When parents separate, it can take a little time to adjust to the new normal. If you have decided as a couple who the children will live with and where, the next logical step is to agree a level of child maintenance the non-resident parent will pay. There really is no one “ideal” time to work out child support, but the sooner it is addressed, the better, as it will maintain stability for the children. There are three main ways child maintenance can be calculated, these are:
- Work out the children’s day-to-day expenses and agree a sum between you to be paid each month; or
- Use the Child Maintenance Service’s calculation tool to work out an agreed monthly figure; or
- Apply to the Child Maintenance Service (CMS) for it to calculate the sum payable. The CMS can also be asked to collect the payments and forward them onto the parent with care. However, there is a fee for this service.
The court may be used to turn voluntary arrangements into legally binding agreements, but it tends to deal with more complicated or unusual situations. For example, where the paying parent has an extremely high income and school fees need to be paid or if either parent or the child live overseas.
What is the actual basis for the calculation?
The formula or criteria used by the CMS to calculate child maintenance takes into account several key factors such as how many children you have, the non-resident parent’s income, how much time the children spend with them, and whether they are paying child maintenance or living with other children.
The CMS first assesses the non-resident parent’s gross yearly income, e.g. before deductions for tax, national insurance, or pension contributions. Certain benefits, such as disability benefits or unemployment allowances, are considered, whilst others, like student grants or tax credits, are not. The gross income is then adjusted to account for those deductions and the figure converted into a weekly amount to enable regular maintenance to be calculated.
Based on the calculated gross weekly figure, one of 5 maintenance rates is then applied (correct at the time of writing):
- Default rate
This is applied when the paying parent’s income is not disclosed and amounts to £38 per week for one child, £51 for two children, and £64 for three or more children.
- Nil rate
This relates to those who have an income below £7 per week.
- Flat rate
For income between £7 and £100 per week, a standard £7 per week flat rate is payable. This rate also applies to those paying parents in receipt of certain qualifying benefits.
- Reduced rate
The sum payable is calculated using a special formula for incomes between £100.01 and £199.99.
- Basic rate
This applies to income between £200 and £3,000.
For incomes exceeding £3,000, the parent with care may seek additional child maintenance provision from the court. If the paying parent receives an income from another asset they hold, such as a rental property, interest on savings, or dividends on shares, this will also be considered income. Again, if this brings the amalgamated income to over £3,000, the parent with care can ask the court to decide the amount of child maintenance that should be paid.
What are the likely reasons that a child maintenance calculation might be wrong?
There are several reasons a child maintenance calculation may be incorrect. The most common include:
- The CMS have used the wrong information when making their calculation, such as the number of children being paid for, incorrect income figures, not included all the nights you or the other parent care for the child
- The paying parent has failed to disclose their earnings from all sources
- There is a change of circumstances which has not been taken into account
How do I ask the CMS to reconsider their calculation?
Whether you are a paying parent or a parent with care, if you receive a decision from the CMS which you do not agree with, you can ask them to review it. This is referred to as seeking a “mandatory reconsideration”.
It is important to act quickly because a mandatory reconsideration must be made within one month of the date the original CMS decision letter is received. If you miss the one month deadline, you can still apply for reconsideration, but you must provide a “good reason” for failing to apply within time. A good reason may include suffering from a serious illness or a bereavement. It is up to the CMS to decide whether your reason is sufficient or refuses it.
Assuming your application for reconsideration was on time, you will need to clearly set out why you think the decision was wrong, with a supporting statement and documentary evidence. This could be bank statements, pay slips, and tax returns proving your position.
The CMS will then reconsider their decision and send you a letter called a “mandatory reconsideration notice”. This will set out:
- Whether or not they have changed their original decision
- The reasons for their decision; and
- The evidence they have based their decision on.
If the original decision is changed, the CMS will also alter the amount to be paid and backdate it to the date of their original decision.
You can appeal the outcome of the mandatory reconsideration further to the Social Security and Child Support Tribunal if you still believe it is wrong. Timing is key, as any appeal must be submitted within one month of the date of the mandatory reconsideration notice. You will be given a date to attend a tribunal hearing, where a judge will listen to both sides of the argument before making a decision. If you believe this decision is wrong, you can make an application for permission to appeal to the Upper Tribunal. But this can only be done if they have made an error on a point of law.
The information on this website is to be considered a guide and is therefore not legal advice. You use this information with the understanding that Wiselaw does not accept liability for any direct or indirect losses as a result of anyone relying on or acting upon the information on this website. Whilst we endeavour to provide accurate information, Wiselaw does not accept liability for any errors or omissions on this website.
