Child Maintenance and Changing Financial Circumstance

Insights - 13/07/2020

Maintenance is always variable.

& of course, it should be – our incomes and other financial circumstances are not carved in stone when relationships break down and changes happen, whether we like it or not.  But never more so than now. How do we deal with rapidly changing financial circumstances – whether through furloughing, part-time furloughing, redundancy, job changes or the vagaries of self-employed income levels these days?

We have all been impacted by coronavirus, both in terms of our needs and our incomes. Our children need feeding and caring for – but maybe those school uniforms have seemed less important recently, whereas the new laptop has leapt up lists of priorities as home schooling became the order of the day.

How do we balance the obligation to make payments with the ability to do so, in these rapidly changing times?

In our experience, many parents are taking a very pragmatic view and working together sensibly to match needs and ability to make payments, without the need for family law solicitors or other interventions – but unfortunately that’s not always possible and it may not always be wise.

The basic law on child maintenance is quite straight forward but there are some interesting aspects to it, particularly when it comes to enforcement for non-payment or reduced payments.

Both parents have a legal obligation to financially support their children. Generally, payments are made to the parent who has the children with them for more of the time, to assist with providing a roof over their heads and everyday living costs. This is known as child maintenance and is normally arranged by informal agreement between the parents, a calculation by the Child Maintenance Service (CMS) or a court order. The level of payment is generally calculated (click here for calculator) by reference to the CMS formula, since the CMS has jurisdiction in most circumstances. The calculation is based upon a set percentage of the paying parent’s gross income, depending on how many children there are and how often they stay with each parent.

Child Maintenance Options Available When Your Income Changes

Family-based arrangements are usually not legally binding, so if the payer suffers a reduction in income the payments could be readily reduced with or without agreement. It’s obviously best to try to agree any such changes with the other parent, ensuring basic financial needs are all covered and reaching an understanding for the return to former levels when income levels recover. If you cannot reach agreement, either party can ask the CMS to carry out a calculation and take over collection of payments.

If you are subject to a CMS assessment any missed payments are legally enforceable (see below), so it is important to speak to them directly if you wish to consider your options. They would probably not assist if income has not reduced/increased by 25% or more. You can call the CMS on 0800 1712345 (note that they, too, have been impacted by coronavirus, and service levels have understandably dropped).

Court orders for child maintenance are limited to relatively few circumstances – largely just 4 categories:

  • High income cases, and “top-up” maintenance above and beyond CMS levels. [Note that you must get a CMS assessment first, before the court can make such orders]
  • Agreement reached between parents, where child maintenance is included in a financial consent order covering other financial arrangements too;
  • Paying parent lives abroad;
  • Child is disabled, and the blunt instrument of a CMS assessment is inappropriate.

Note that the court has other, far-reaching powers under the Children Act Schedule 1, giving rise to orders for lump sum payment(s), property/accommodation to be provided, and child maintenance. In the case of High Net Worth individuals such orders often include things like payments for nannies, buying cots, cars and equipment, and much more.

Enforcement of Child Maintenance Payments

CMS assessments and court orders must of course be complied with, failing which enforcement action can be taken.

The court and the CMS have very wide arrays of (slightly differing) powers available to them to ensure their orders and assessments are complied with. These include the confiscation of driving licenses, freezing injunctions, taking money direct from bank accounts or earned income, charges on properties and forcing sale of properties, insolvency or even committal to prison.

Court orders and Child Maintenance Assessments have to be taken seriously, and any attempt to change them should be dealt with formally.

If the payer is genuinely unable to meet payments as a result of a reduction in their income, they can make an application to the court to vary the order and reduce the payments. It would usually be best to consult a family lawyer before doing so.

Note that if the court order is more than 12 months old, you can generally apply to the Child Maintenance Service for an assessment. A CMS calculation will override child maintenance provision in a court order, so you should think carefully before doing so.

If you would like further advice on the topics covered about please contact Andrew Kingston, Solicitor in our Family team by email on 01276 401 699 or email at [email protected] 

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Disclaimer:

Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position.