How to Reduce Child Maintenance Payments
Lots of parents are exploring how to reduce child maintenance payments because of the squeeze Covid-19 and the rising cost of living has put on their finances.
In this guide, we’ll explore child maintenance payments in detail, including:
- How the Child Maintenance Service (CMS) calculates payments
- What to do if your financial situation has changed
- How changes in payments can be negotiated; and,
- What happens if you don’t pay child maintenance payments
We’ll also look at who isn’t expected to make child maintenance payments and some options you can consider if you simply cannot keep up with your outgoings.
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What is the Child Maintenance Service?
The Child Maintenance Service (CMS) is a government-run service that is there for parents who have not been able to make a private arrangement for covering their child’s living costs.
The CMS doesn’t automatically get involved when parents separate or when parents who are not together have a child. Instead, the service is there if the two parents or guardians cannot agree between them payments that will cover the costs of raising that child.
The main roles of the CMS include:
- Working out how much should be paid
- Arranging to collect payments if a parent does not pay
- Sorting out disagreements about who looks after the child
- Finding missing parents if you do not know where they are
How does the CMS calculate your payments?
If you’re looking at how to reduce child maintenance payments, it’s useful to first know exactly how these payments are calculated – to make sure you’re paying what the CMS considers to be a fair amount.
“Paying parent” and “receiving parent”
Throughout CMS guidance and this guide, you’ll see the terms “paying parent” and “receiving parent”. It’s important to understand what these mean to avoid any confusion.
The paying parent does not have day-to-day care of the child. Therefore, this is the person who pays child maintenance.
The receiving parent is the person who is responsible for the day-to-day care of the child. Although this is usually the other parent, it can sometimes be a guardian instead. This person receives the maintenance payments.
The CMS has a 6-step process for working out what the paying parent should pay.
Step 1. Working out your income
The CMS will contact HM Revenue and Customs to find out what the paying parent’s yearly gross income is. ‘Gross’ means the figure before tax, national insurance and other deductions are made.
They’ll also check with the Department of Work & Pensions (DWP) to find out if the paying parent is getting any benefits.
Tax credits, student grants, and loans do not count towards your gross income.
Step 2. Looking at what affects your income
The CMS will check for things that affect your gross income amount.
These things might include pension payments or costs of other children you support.
At this stage, you can ask for additional things to be taken into account – usually extra income, things you own, or extra expenses you might have.
When the CMS has all the figures they need, they will work out what your gross weekly income is.
Step 3. Applying a rate
Depending on your gross weekly income, one of 5 rates will be applied.
Gross weekly income Rate Weekly amount
Unknown or not provider Default £38 for 1 child, £51 for 2 children, £61 for 3 or more children
Below £7 Nil £0
£7 to £100, or if the paying Flat £7
parent gets benefits
£100.01 to £199.99 Reduced Calculated using a formula
£200 to £3,000 Basic Calculated using a formula
If the paying parent’s income is more than £3,000, the receiving parent is entitled to apply for a court order for extra child maintenance.
Step 4. Considering other children
The CMS will take into account the number of other children that the paying parent has to pay maintenance for or support. This might include children that live with them and financial arrangements made for other children.
These costs can include anything from food costs and travel expenses right through to boarding school fees.
Step 5. Coming to a decision
With all this information, the CMS will make a decision about the final figure the paying parent is expected to make.
Step 6. Factoring-in ‘shared care’
When the CMS calculation has been made, they will make deductions from this amount based on an average number of ‘shared care’ nights each week.
A ‘shared care’ night is when the child stays overnight with the paying parent.
How to use this information
Since many parents are paying maintenance with no formal CMS agreement in place, this information can be useful in helping you decide if what you’re currently paying is fair and inline with the amount of child maintenance you are expected to pay.
You can use the .GOV website to work out what your child maintenance payments are likely to be. The calculator will not send any personal or financial information to the DWP.
Some people do not have to pay child maintenance
You will not be expected to pay anything through the Child Maintenance Service if you:
- Share care equally with the other parent
- Are in full-time education with no income
- Are in prison
What can you do if your financial situation has changed?
Millions of people, both employed and self-employed, have seen their finances impacted by Covid-19. More recently, significant increases in costs of living have also meant even priority costs have been hard for some people to meet.
It’s important to remember that child maintenance payments are considered to be a priority payment and you should make sure they’re made ahead of any unsecured loans or credit cards.
If you can’t pay maintenance as expected, there are a couple of important steps to take.
Step 1. Speak to the other parent
If it’s possible and safe to do so, your first step should be talking to the other parent and see if you can reach a compromise.
It’s important to try to see things from their point of view as well as your own.
You could perhaps ask if they would be willing to accept a temporary reduction, until your circumstances change and you can afford to pay the normal amount again. You might want to put a timescale on this so they don’t feel like it will be forgotten about.
If you do manage to come to an agreement, you should let the CMS know. They may be able to offer additional support if you’ve seen a significant reduction in the amount you earn.
Step 2. If you can’t agree, ask the CMS for help
It won’t always be possible to talk to the other parent involved or come to an agreement. However, if your income has dropped by 25% or more (if you’ve been made redundant for instance), you can ask the CMS to recalculate what you have to pay based on these new figures.
If your income hasn’t dropped by 25% or more, you’ll be expected to continue paying your current amount.
The CMS charge a fee for this service, so it’s better to make an agreement between parents if possible – but it’s not essential.
At the moment, you will be able to talk to the CMS and let them know over the phone about any issues impacting your ability to pay. They may agree a lower amount for now – but they will need to see proof of your reduced income in the future.
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What happens if you don’t pay maintenance?
Whether your agreement has been made directly between parents or recommended by the CMS, stopping your payments can lead to serious consequences.
The CMS will add up the amounts of missed payments and this will be considered a debt. Like other creditors (people or companies you owe money to), they have a debt collection process that they will start promptly – especially if you haven’t spoken to them about financial issues you’re having.
If you continue to withhold payment, they can apply for a court order to collect arrears directly from your wages or benefits – before these payments get to your bank account.
In rare cases, failure to pay can even result in prison.
How to challenge what the CMS says you should pay
There’s a formal appeals process that you can pursue if you think the CMS calculation is incorrect.
Before you start an appeals process though, you should ask the CMS for the decision to be looked at again. This is called ‘mandatory reconsideration’.
Why you might pursue a mandatory reconsideration
You can ask the Child Maintenance Service to take a second look at their decision for a number of reasons, including:
- You think they have made a mistake or their decision is wrong
- Your circumstances have changed. For instance, you may have a new child with a new partner or your income has changed
- You have additional ‘special expenses’ – like travel costs, school fees, or debt from your previous relationship
Sometimes, this mandatory reconsideration will lead to a change in the amount of child maintenance you’ve been asked to pay. However, if you still don’t agree, you can appeal to the Social Security and Child Support Tribunal. You’ll have to make this appeal within a month of the decision being made – if you don’t, you will have to explain the delay.
How to make an appeal
You’ll need to download and complete an SSC2C form to make an appeal. When it’s filled out, you should send it to the address on the form.
You can provide evidence to support your case.
It usually takes around 6 months for the appeal to be heard by the Social Security and Child Support Tribunal. You’ll be invited to the hearing – but even if you don’t attend, a decision will be made.
Reducing any other payments or debts you have
If you’ve looked into how to reduce child maintenance payments and find there’s no way to lower your payments, you might want to look into giving yourself some breathing space with other, less important payments.
Different payments, bills, and debts are given different levels of priority. The following are considered to be priority bills or debts:
- Mortgage or secured loan costs
- Council tax
- Gas or electricity bills
- Phone or internet bills
- TV licence payments
- Court fines
- Overpaid tax credits
- Hire purchase payments
- Unpaid income tax, national insurance, or VAT
- Unpaid child maintenance payments
These should be the first things that are paid – as the consequences for not paying are severe.
Some payments and debts are considered a lower priority:
- Credit cards
- Store cards
- Catalogue debts
- Unsecured loans (including payday loans)
- Unpaid water bills
- Overpayments of benefits (excluding tax credits)
- Unpaid parking tickets
- Money owed to family or friends
It’s essential that you do not simply stop making payments to lower priority creditors – but it can often be a good idea to call them, explain your situation, and look into payment holidays or temporarily reduced payments. This will sometimes give you the financial space you need to pay your child maintenance in full.
If you can’t see a time when your income will allow you to cover everything you owe each week or month, you may decide to look at debt solutions that will make things more manageable going forward.