Child Maintenance: When is capital, income?10 Aug 2021 | Lisa Pepper
Reading a recent case from the Child Maintenance Tribunal, I considered it worth flagging up that the Child Maintenance Rules changed in 2018, regarding paying parents’ capital.
For the purposes of this article I shall refer to the Parent With Care/Non-Resident Parent (CMS terms) as Mother and Father respectively, acknowledging of course it depends on the individual situation.
On an application to the Child Maintenance Service (CMS) for an assessment, it will initially assess on the basis of gross income using tax returns, etc. The Mother can apply for a variation to take into account capital. Where the Father’s capital exceeds £31,250 then a notional income of 8% of the value can be ascribed to him. This can include a number of types of assets including assets held in a trust of which he is a beneficiary (note that his primary residence is excluded). This is a very important change and should not be overlooked when advising clients on CM issues.
The case I mention was BB v Secretary of State for Work and Pensions and another (CSM)  UKUT 314 (AAC) which considered a Child Maintenance Service assessment in 2016 regarding redundancy payments. The question for the Tribunal was whether redundancy payments count as current income (and therefore should be taken into account as part of the calculation of Child Maintenance Payable).
The Tribunal held that the redundancy payments were not income, they were considered more like payments of capital, in that they were compensated for the loss of a job, and taxed differently. The Upper Tribunal concluded that current income for the purposes of a CMS assessment did not include redundancy payments, but the taxable part of the payment counted as historic income. As I say, this concerned a CMS assessment made in 2016, the rules have now changed, and there is a new ground of variation for notional income to be ascribed to assets exceeding £31,250.
Child Maintenance FAQs
What income is taken into account for child maintenance?
Any income you have from employment, self-employment, property and investments is taken into account when working out how much child maintenance you should pay. This includes any income you receive from bonuses, overtime or commission. If you are claiming benefits, the amount of most benefits you receive will be included as part of your income.
Income is capped at £156,000 per year (£3,000 per week) before tax, which is the maximum income of the paying parent that will be taken into account for child maintenance. If the paying parent’s income is higher than £156,000, it may be possible to apply to the court for top-up maintenance.
Is child maintenance calculated on gross income?
Yes, child maintenance is calculated on gross income in England and Wales. The Child Maintenance Service (CMS) has a formula for maintenance based on various factors, including how much gross income you earn, how many children you have, how much time the children spend with you and whether you are paying for children from another relationship. You can use the government’s online calculator to work out how much you should be paying in maintenance.
What can be deducted from child maintenance?
You can ask the CMS to take into account certain expenses you pay, which reduces the gross income figure that is used to work out child maintenance payments. These include:
- Boarding school fees
- The cost of travel to and from contact visits
- Extra costs for children with special needs
- Making mortgage payments on the home that the receiving parent and children still live in
Does inheritance affect child maintenance in the UK?
Inheritance is not income and does not form part of the paying parent’s gross income used for calculating child maintenance. However, inheritances can be considered a source of capital for parents. This means the receiving parent can apply for a variation to take the inheritance into account if it exceeds £31,250.
Do I still pay child maintenance if my ex remarries?
Yes, you would still be required to pay child maintenance if your ex-partner remarries. The amount of child maintenance you are required to pay is based on your income and the number of children you have, not your marital status.
How many nights a year is shared care?
There is no set number of nights required for shared care in England and Wales. However, if the child stays with a paying parent for an average of one night a week or more (at least 52 nights a year), this can reduce child maintenance payments.
For example, where there are 52 to 103 nights of shared care each year, child maintenance is reduced by 1/7th for each child. For 104-155 nights, the reduction is 2/7ths. For 165-174 nights, it is 3/7ths, and for 175 nights or more, there is a 50% reduction in child maintenance.
Do you pay child support if you have 50/50 custody?
If you have 50/50 custody and an absolute equal share for the care of the children, then you would not typically have to pay child support. Child maintenance rules assume that the paying parent provides day to daycare to a lesser extent than the receiving applicant.
Contact us today
For a free initial conversation call 020 7485 8811
Email us Send us an email and we’ll get back to you
Related InsightsVIEW ALL
The courts approach to costs in financial proceedings...
WC V HC – a recent costs case in financial proceedings on divorce The recent case of WC v HC  EWFC 40...Read more
Judge ignores pre-nuptial agreement but factors in non-matrimonial...
Case Law One of the reasons I am still passionate about family law, after 20 years in the field, is that...Read more
What if my partner predeceases me before we...
A review of a recent case concerning consent during fertility treatment. When going through fertility treatment as a couple, it...Read more
Declaration of parentage after mistake at register office
Recently in the news has been the outcome of the case of Osborne & Anor v Cambridgeshire County Council  EWHC 1982 (...Read more
Proposed Capital Gains Tax Rule Changes Could Reduce...
The government has proposed a number of changes to the capital gains tax (CGT) rules which, if enacted, will come...Read more
New strategy to make fertility treatment more accessible
In July 2022, the Department of Health for England released its strategy aimed at improving Women’s Health. While women represent 51%...Read more
Proposed Changes to Gamete Donor Anonymity Laws in...
The Human Fertilisation and Embryology Authority (HFEA) has proposed changes to the law surrounding gamete donor anonymity in the UK....Read more
Mediation or Arbitration: What’s best for me?
Few divorcing couples want to end up in court, which is why mediation and arbitration are faster and more effective...Read more
Family Mediation: a cost-effective alternative to court action
Mediation is increasingly important for our clients in their efforts to resolve children and financial issues divorce. This week (17 to 21...Read more
6 cases that shape a private children dispute
Family disputes involving children can be particularly emotive, which is why our expert children lawyers work tirelessly to understand how...Read more
Naomi Angell, founder, celebrates Coram Children’s Legal...
Naomi Angell, Head of Osbornes’ Adoption, Surrogacy and Fertility Law Unit spoke, at the 40th birthday of the Coram Children’...Read more
Has my child been abducted?
My ex-partner has taken our child abroad without my consent – what should I do? In order for a parent to...Read more
Legal considerations in the surrogacy process
What Are My Surrogacy Options at Home and Abroad? When you’re considering surrogacy as an intended parent, you may...Read more
Birth parent fails to overturn adoption order
Most adoption applications go through smoothly and it is only in the minority of cases that birth parents seek to...Read more
Changes in Fertility Law Benefit Families
Following campaigning by those working in the fertility sector and public consultation in 2020, the Government announced on 6th September 2021 that...Read more
Beneficial Interest in Property
Andrew Watson, a London-based divorce lawyer in our family department and Resolution accredited cohabitation lawyer, summarises the law in relation...Read more
Child Maintenance: When is capital, income?
Reading a recent case from the Child Maintenance Tribunal, I considered it worth flagging up that the Child Maintenance Rules...Read more
Pre-nups becoming the new norm for soon to...
Lawyers are seeing record numbers of couples signing pre-nuptial agreements this year as the country moves closer to a society...Read more
Pet-Nups: Who Keeps The Dog On Divorce Or...
‘Do you need a pet-nup’. We examine why many couples are including arrangements for their pets in a pre-nuptial agreement....Read more
Contesting a prenuptial agreement
Kanye West and Kim Kardashian are getting a divorce after nearly seven years of marriage. According to reports, Kim filed...Read more
Unsafe cladding: Issues for separating couples
The government has recently announced it is providing additional financial support towards rectifying the cladding issues in countless buildings across...Read more
Lockdown rush to cohabitation leaves couples lacking financial...
When the lockdown was announced many couples had to make a rushed decision to move in together or face months...Read more
Family lawyer at Osbornes discusses how she juggles...
Sarah Scott, associate solicitor in the firm’s family department contributed to The Law Society Gazette’s piece on “Lawyers...Read more
Mediation by Zoom
At Osbornes, our Family Law mediations are in the main, conducted by Zoom during lockdown as our main office in...Read more