Child maintenance ensures that both parents contribute financially to their children’s upbringing, even if they are no longer together. In England, the Child Maintenance Service (CMS) provides a structured way to calculate and collect child maintenance. Here, we’ll explore how child maintenance is calculated and what factors affect the amount.
What is Child Maintenance?
Child maintenance is regular financial support paid by the parent who doesn’t have day-to-day care of the child (the paying parent) to the parent or guardian who does. It helps cover the child’s needs, such as housing, clothing, and other essential expenses.
How is Child Maintenance Calculated?
The CMS bases calculations on the paying parent’s income. It uses a straightforward formula to calculate the amount, considering different factors such as the number of children and how much time they spend with each parent.
Here’s a breakdown of how the CMS calculates maintenance:
- Income of the Paying Parent
The CMS bases its calculation on the gross weekly income (before tax) of the paying parent, including salary, bonuses, and self-employment income. Income from pensions, rental properties, and other sources can also be included. If the paying parent earns over £200 per week, their rate is based on a percentage of this income. - Rates and Percentages Based on Income
The CMS uses different rates depending on the paying parent’s weekly income:- Basic Rate: For those earning over £200 per week. Payments depend on the number of children:
- 12% of income for one child
- 16% for two children
- 19% for three or more children
- Reduced Rate: For those earning between £100 and £200 per week. This involves a flat rate plus a percentage of the weekly income.
- Flat Rate: A flat £7 per week applies for those with a weekly income between £7 and £100, or who receive certain benefits.
- Nil Rate: If the paying parent’s weekly income is under £7, no maintenance payment is required.
- Basic Rate: For those earning over £200 per week. Payments depend on the number of children:
- Number of Children
The amount of child maintenance increases with the number of children. Each additional child adjusts the percentage taken from the paying parent’s income. - Shared Care Adjustments
If the paying parent has the children for a certain number of nights per week, the CMS makes an adjustment:- 1 night per week reduces the payment by 1/7
- 2 nights per week reduces it by 2/7, and so forth, up to a maximum adjustment for 6 or 7 nights.
- Other Dependents
If the paying parent has other dependent children in their household, the CMS may reduce the amount they’re required to pay. This reduction is applied before calculating maintenance for children living with the receiving parent.
Example Calculation
A paying parent earns £400 per week and has one child with the receiving parent. Here’s how the CMS would calculate child maintenance:
- 12% of £400 = £48 per week if they have no other dependents or shared care adjustments.
- If they spend 2 nights per week with the child, the adjustment would reduce the payment by 2/7, resulting in approximately £34 per week.
How to Arrange Child Maintenance
While the CMS offers a way to calculate and collect payments, parents can also agree to a family-based arrangement, where they decide on a suitable amount together. This method is flexible and does not involve CMS fees.
Fees for Using the CMS
If you choose to use the CMS for collection rather than arranging payments directly, there are fees:
- Application Fee: A one-time fee of £20.
- Collection Fees: The CMS takes an additional 4% from the receiving parent and charges the paying parent an extra 20% on top of their payment.
When the CMS Gets Involved
In cases where parents cannot agree, or if there is a history of non-payment, the CMS can enforce payments. They have the power to take payments directly from wages, seize assets, and impose penalties.