The courts have not been involved in deciding child maintenance since 1991. Instead, the Child Maintenance Service applies a formula, which involves five main steps to calculate the amount of child maintenance. The hope being to provide certainty for parents about what they are likely to be required to pay, or will receive, for their children.
Where children are spending more or less an equal amount of time over a year with each parent, then it is unlikely that one parent will make a payment to the other, but instead each parent will meet their children’s costs when with them. Where that is not the case most parents seek to agree the amount of child maintenance using the formula, which is available by searching for ‘calculate child maintenance’ on the government’s website. Our team explains the five main steps below.
First is the determination of the taxable gross annual income of the parent who children spend less time with (referred to as “the non-resident parent”). This is the annual income before Income Tax and National Insurance (up to a maximum of £156,000 a year) but after pension contributions. It also includes receipt of certain state benefits.
If a non-resident parent’s annual income exceeds £156,000 then consideration can be given to whether a “top up order” is appropriate, for instance to meet school fees or other expenses directly referable to a child, which would either be a matter for agreement or determination by the court.
Step 2 is to consider things which could affect the non-resident parent’s income. These can include:
- Contributions to a private pension scheme (occupational or employer pension schemes are taken into account at step 1)
- Other children whom the non-resident parent supports, whether or not they live with him/ her. If, for example, a non-resident parent moves in with a new partner who has children living with them and for whom that new partner receives child benefit, those children can reduce the percentage of the non-resident parent’s income which is assessed.
Step 3 is to determine the rate applicable to the amount of gross weekly income to be assessed as per steps 1 and 2.
With Step 4, the number of children that the non-resident parent pays child maintenance to is taken into consideration.
These four steps produce the weekly amount of child maintenance, however in the fifth and final step the calculation reflects the number of nights per annum the children to whom the assessment relates, spends with the non-resident parent. Reductions will be made having regard to the number of nights spent with the non-resident parent. If, for example, a child spends between 52 and 103 nights a year with the non-resident parent the amount of the assessment will be reduced by 1/7, and if between 104 to 155 nights the reduction is 2/7.
Once the amount has been determined, the parent receiving the payments can seek a variation where, for instance, they dispute the amount of the non-resident parent’s income, and a non-resident parent could, if he or she pays certain expenses, apply for “a special expenses variation”, to reduce the amount of the income to be assessed. Such a variation could be sought for instance to reflect the following:
- The cost of travel between the non-resident parent’s home and the child, where that cost amounts to at least £10 a week
- The cost of repaying debts from a former relationship
- Mortgage payments or insurance policy premiums paid for the former home of the non-resident parent and other parent, if the other parent and the child still live in that home and the non-resident parent has no legal or equitable interest in that home.
For further advice on child maintenance payments, please contact enquiries@bpcollins.co.uk or call 01753 279046.
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