Both parents are financially responsible for looking after their child. Child Poverty Action Group’s annual report revealed that the minimum cost to raise a child (from birth to age 18), is rising year on year and in 2021 the cost hit £160,692 for a couple and £193,801 for a lone parent.
The cost is significantly higher for parents with resident care of their child than for parents who have contact arrangements, showing a clear need for child maintenance payments.
The cost of raising a child can be shared between the parents in numerous ways, for example, through:
- The statutory Child Maintenance Scheme (CMS)
- Private agreements
- In-kind contributions
- Shared care arrangements (e.g. 50/50)
- Court-enforced maintenance orders (REMOs)
Where you are not able to come to a private or voluntary arrangement for the payment of child maintenance, then you will usually need to consider an arrangement through the CMS as an alternative.
How does the CMS work?
Child maintenance can be paid for children up to 16 years old or 20 years old if in full-time education. The resident-parent can apply to the CMS and the CMS will contact the non-resident parent to calculate and arrange payments. Payments can either be made directly from one parent to the other, or the CMS can collect payment from the paying parent and pay it to the receiving parent. The CMS charges fees for the “collect and pay” service and will deduct 4% from the amount received by the receiving parent and charge 20% more to the paying parent. This is in addition to the £20 application fee.
How is child maintenance calculated through the CMS?
The amount the non-resident parent will pay depends on:
- Their gross weekly income (less any pension contributions but not less tax or NI);
- The number of children they have;
- The number of nights they look after the child (if any); and
- If they have any other children that live with them.
You can check to see how much child maintenance you could pay/receive here – https://www.gov.uk/calculate-child-maintenance
The resident parent’s income or any new partner’s income is not factored into the CMS calculation.
It should be noted however that the CMS calculation is based on a gross weekly income which is capped at £3,000. Therefore, if the non-resident parent earns £156,000 or more per annum, it may be appropriate to apply for a top-up order from the court.
High earners – top-up awards by the court (s8(6) of the Child Support Act 1991)
The general approach of the courts has been to apply the CMS calculation on salaries between £169,000 and £650,000 without the cap. This is seen as a starting point and then the judge can use their discretion to increase or decrease the payment depending on the circumstances.
If the non-resident parent earns in excess of £650,000 per annum, the CMS calculation should still be applied without the cap but the court will have full discretionary freedom to depart from the calculation given the possible maintenance amount.
Reasons why the court may depart from the calculation include where:
- The parent with care of the child has a high income (note that this now becomes relevant);
- The payment is not in line with the child’s budget; or
- The welfare of the child requires it (for example, where having two very different standards of living with each parent is harmful to their wellbeing or relationship with either parent).
It is particularly important to seek legal advice if the non-resident parent is a high earner.
How we can help
If you are having any difficulty in agreeing and arranging child maintenance payments, our Family Team is on hand to assist from minimal advice to advancing applications at court.