If you and your ex are splitting up and you have a child or children, you’re both obliged to pay for them. How do you arrange child maintenance payments and what is the Child Maintenance Service?
How much child maintenance should I pay?
The Child Maintenance Service (CMS) has taken over child maintenance cases from the Child Support Agency (CSA). At the same time, more parents are being encouraged to make their own arrangements for child maintenance through what are called ‘family-based arrangements’. The idea is that it encourages parents to continue a relationship around their children after they have divorced or separated. The amount of child maintenance you have to pay is based on the non-resident parent’s income.
Child maintenance: how to pay
There are three main ways that you can arrange and pay child maintenance with your ex, and a fourth option available to some divorcing parents:
1. Family-based arrangement. Here you and the other parent sort out how much child maintenance will be paid to the parent who cares for the child(ren) most of the time. It’s a flexible arrangement that’s free to set up. The Child Maintenance Options website has information on what to include in a family-based arrangement on its website.
SAVVY TIP: Although family based arrangements are free to set up and are flexible (in that you and your ex decide it all between you), be aware that some mortgage lenders won’t class child maintenance as income if it’s being paid through a family-based arrangement. You can read more in my article Is child support counted as income by mortgage lenders?. If you want to have a family-based arrangement, make sure that child maintenance is paid by standing order or another method that will show up on your bank statements (i.e. not cash) if you are thinking of applying for a mortgage or remortgaging.
2. Using the Child Maintenance Service to calculate how much maintenance is due, but arrange payments directly. You can ask the CMS to work out how much child maintenance should be paid, but arrange payment between you using Direct Pay (it’s called ‘Maintenance Direct’ if you’re still using the Child Support Agency).
SAVVY TIP: If you use Direct Pay, you and the other parent don’t have to pay any collection fees or charges, although you will have to pay a £20 fee to get the CMS to work out how much child support is due. But if your ex doesn’t keep up payments through Direct Pay and you have to ask the Child Maintenance Service to collect money owed, then you will have to pay charges.
3. Using the Child Maintenance Service to work out how much child maintenance should be paid and collect and pass on child support. If you use the CMS to collect child support, you will have to pay and so will the parent who’s supposed to pay child maintenance. See the fees below.
4. Going to court. This option is only available to couples where the parent being asked to pay child maintenance earns over £156,000 a year or if he/she lives abroad. Divorcing couples can also ask a court to decide child maintenance levels if a child is disabled.
Child Maintenance Service charges
The Child Maintenance Service will charge parents who use it to calculate or calculate and collect child maintenance payments. It introduced a registration charge in June 2014 and a collection charge in August 2014.
SAVVY TIP: These charges don’t apply if you’re in Northern Ireland or if you’re the victim of domestic violence.
The charges are:
- £20 registration charge: this is paid by the couple or by one parent and covers the cost of the Child Maintenance Service calculating how much child maintenance is due. Either the parent who will pay child maintenance or the parent who will receive it can ask for this calculation.
- Collection service charge: Parents are encouraged to pay each other directly. However, if the parent who’s paying child maintenance doesn’t make the payments on time, you can ask the Child Maintenance Service to collect the money (including any arrears). If you’re the parent receiving child maintenance, you will have to pay the CMS a 4% ‘collection charge’, while the parent paying child maintenance will have to pay an additional 20%.
How levels of income are checked
The Child Maintenance Service checks the level of income of the parent who’s going to pay maintenance using information provided to HM Revenue and Customs (either income from employment or from tax returns filed).
SAVVY TIP: If you are the paying parent and you don’t agree with the income amount used by CMS, you can send proof of your annual income direct to them. They will only use the new figure if it is at least 25% more or less than the figure they are using.
How much child maintenance will you pay?
There are different levels of support that a paying parent has to pay, based on their income and the number of children.
- Nil rate: If the paying parent earns less than £7 a week or receives less than £7 a week in income, they don’t pay any child maintenance. The nil rate also applies if the paying parent is a student or gets an allowance for work-based training. The same applies if they are in prison or are 16-17 years old and on certain benefits.
- Flat rate: If the paying parent’s weekly income is between £7 and £100 a week and they don’t qualify to pay the ‘nil rate’, they pay a flat rate of £5 a week. It’s also used if they get certain benefits, including income support or employment and support allowance.
- Reduced rate: If the paying parent’s weekly income is between £100.001 and £199.99 a week. They pay £5 a week on the first £100 plus a percentage of their income on the rest.
- Basic rate: If the paying parent’s weekly income is between £200 and £800 a week. The amount depends on how many children need maintenance and other factors.
- Basic plus: If the paying parent’s gross weekly income is between £800.01 and £3,000, they will pay the basic rate on the first £800 of income and a lower rate on the remainder.
SAVVY TIP: In this case, gross income means pay/income before tax and National Insurance, but after pension contributions have been deducted.
Child maintenance levels – how the number of children affects payments
The amount the paying parent will pay at the basic and basic plus rates depends on how many children they are being asked to pay maintenance for. If you are paying the basic rate of child maintenance, the following percentages apply:
- Maintenance for one child: 12% of gross weekly income.
- Maintenance for two children: 16% of gross weekly income.
- Maintenance for three or more children: 19% of gross weekly income.
For basic plus, the paying parent will be asked to pay the above rates on the first £800 of gross weekly income, and lower rates on the remainder, as I’ve set out below:
- Maintenance for one child: 12% of gross weekly income on the first £800 and 9% of gross weekly income above £800.
- Maintenance for two children: 16% of gross weekly income on the first £800 and 12% of gross weekly income above £800.
- Maintenance for three or more children:19% of gross weekly income on the first £800 and15% of gross weekly income above £800.
SAVVY TIP: The amount the paying parent pays will also depend on how often the children receiving maintenance stay with him or her and if the paying parent has other children living with him or her.
- If the child(ren) spend(s) between 52 and 103 nights with the paying parent: child maintenance is reduced by 1/7th for each child
- If the child(ren) spend(s) between104 and 155 nights with the paying parent: child maintenance is reduced by 2/7th for each child
- If the child(ren) spend(s) between 156 and 174 nights with the paying parent: child maintenance is reduced by 3/7th for each child
- If the child(ren) spend(s) 175 nights or more nights with the paying parent: child maintenance is reduced by 50%, plus an extra £7 a week reduction for each child
There’s a useful booklet you can download from the GOV.UK site called how we work out child maintenance.
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