The COVID-19 pandemic has adversely affected many people’s income and this, in turn, can impact the level of child maintenance a parent is due to pay or receive. Child maintenance is normally paid by either private arrangement (normally by a written or verbal agreement) or by way of a Child Maintenance Service (CMS) assessment.
This is a statutory arrangement. The assessment is based on the paying parent’s income, and details of that are obtained directly from HMRC, PAYE if they are employed or the most recent tax return for the self-employed. Whilst the CMS carries out an automatic review each year this is not agile enough to deal with a substantial decrease in salary as a result of COVID-19. The review may not be due for a number of months. As a result, the paying party may be stuck with an assessment that is based on a salary that is very different from the sum that they are now receiving. Thankfully there is a mechanism to seek an earlier review, but only if their income has changed by 25% or more since the last assessment. This would mean that being on furlough and receiving only 80% of your salary would not automatically qualify for a reduction in the child maintenance assessment.
To request a review if you are employed, you will need to produce pay slips evidencing a reduction in your wages. If you are self-employed this is more difficult. You will require to lodge up to date accounts to evidence the position. When an application for a review is made, the receiving parent will be notified if the decision results in a change to the amount due. They then have 30 days to object to the decision. If they object, CMS will firstly review the decision and if the receiving parent is still unhappy with the decision, they can appeal to the First-tier Tribunal.
If your income has reduced to a level where you require to apply for benefits this simplifies matters. Anyone who is in receipt of Universal Credit should have their child maintenance assessment reduced to £7 per week. It is important to inform the CMS as soon as possible of any change as the CMS cannot backdate a change.
If you are the recipient of maintenance through the CMS but have agreed a direct pay arrangement, then you should contact CMS as soon as possible if the paying parent has stopped paying. You can request a change to the collect and pay option. As the CMS can be reluctant to enforce arrears before the switch to collect and pay (there is often a dispute as to whether payments have been made or not) it is important to act quickly.
A Private Arrangement
If there is a minute of agreement (contract), the terms of that agreement will prevail. There is a statutory mechanism whereby either parent can seek a variation of the contract due to a material change in circumstances but that will require a court action to secure a variation in the absence of an agreement being reached.
Either parent can make an application to the CMS providing that one year has passed after the date the agreement was signed. That may not assist however as CMS will access the information held by HMRC which may not reflect the up-to-date information about current income. It makes sense to have a conversation at an early stage, to let the other parent know of their difficulties and explore if a temporary arrangement can be reached.
If there is no formal agreement in place, then there is no contractual obligation and as such the amount paid could be unilaterally changed by the paying parent. If this happens and you are the recipient then the best option is for you to contact the CMS immediately. The CMS cannot back date a claim so the liability for the paying parent only starts once the application is intimated to the CMS.
There are a number of issues to be considered here and so if you would like advice on this or any other area of Family Law, please contact the Blackadders Family Law team who would be happy to assist.
Emma Sadler, Senior Solicitor
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