Child maintenance can be a tricky issue and is something that can cause a lot of confusion for separating parents, particularly the interaction between the court and the Child Maintenance Service (CMS). One of my colleagues previously outlined 10 myth-busting facts about child maintenance which may be a good starting point to help you to navigate the system.
The child maintenance reforms of 2012 aimed to encourage parents to cooperate and work together to agree a family arrangement to meet their financial responsibilities for their children.
The CMS is a service for parents who are not able to reach a private arrangement between themselves about how their child’s or children’s living costs will be met. The CMS will calculate the amount of maintenance required, based on the payer’s gross income, and will set a schedule for payments to be made by the paying parent. The CMS can also be used to collect payments (although a fee is payable) and take action if payments are not made.
In June 2021, the Department for Work and Pensions (DWP) launched a consultation on proposed changes to modernise and improve the Child Maintenance Service (CMS). In particular, the DWP is seeking feedback on their proposal to allow information held by HMRC about the payer’s unearned income (as well as their earned income) to be included in the maintenance calculation made by the CMS. This would therefore bring income such as property rental income and investment income (for example, interest and dividends) directly into account. Importantly, it should ensure that the CMS calculation would accurately reflect all the paying parent’s sources of income and reduce the ability of the paying parent to structure their financial affairs in such a way as to thwart a CMS liability higher than they want to pay.
The consultation closed on 6 August 2021 and it will be interesting to see whether the proposed changes are adopted as this could have a significant impact on settlements all over the country in the future.
Published on 2 September 2021