The Real Man's Guide To Divorce by Brien James

Author:Brien, James [Brien, James]
Language: eng
Format: epub
Publisher: James Brien
Published: 2019-06-18T16:00:00+00:00

Chapter 6:

Managing your Finances

Child Maintenance

The purpose of child maintenance is to provide support for a child’s everyday living costs. The non-resident parent must make payments to the resident parent, who is responsible for the child’s day-to-day care.

There are three ways to determine how much maintenance you will pay for your children:

1. Decide informally with your ex-partner.

2. Hire solicitors to help you reach an agreement.

3. Have the Child Maintenance Service (CMS) calculate the amount.

Working out the amount with your ex-partner is a practical method; consider using a mediation service if you are having difficulty communicating. However, this informal approach carries a level of uncertainty, as either party can revisit the amount at any time in the future.

Agreeing on an arrangement using the help of solicitors will be costly but may be necessary if your finances are complex. You can also ask the court to make the child maintenance payments legally binding. This approach might be useful if you anticipate becoming increasingly wealthy. The downside is that if your circumstances take a turn for the worst, you would still be legally required to pay the agreed amount.

The CMS has come under fire in some circles, but in my experience, they are quite straightforward, and their calculations are transparent and fair.

Along with limited access to children, maintenance payments create the most frustration amongst fathers. Some argue that they are happy to pay for their children, but they want all of the money spent directly on their children .

In these circumstances, it is helpful to consider that your separation should not result in suffering for your children and their mother. When you were all together, you enjoyed a certain kind of lifestyle, which should continue where possible.

If you still earn the same amount of money as you did when your family was together, the CMS will calculate an amount that should maintain the lifestyle enjoyed by your children. This includes the type of home your children live in and the type of activities that they can enjoy.

How the CMS Calculates Child Maintenance

The Child Maintenance Service follows six steps to calculate the amount of child maintenance you will pay. The amount is reviewed every year and can change based on changes in income or family circumstances.

Step 1. Working out Your Annual Gross Income

The CMS works out child maintenance using your taxable annual gross income as the starting point. Income includes earnings from employment, self-employment (profits from a business), occupational or personal pensions and certain benefits. Annual gross income is your yearly income before income tax and National Insurance have been withdrawn, but after your employer or personal pension scheme deductions.

The figures are usually taken from HM Revenue & Customs (HMRC). HMRC uses the information from your last complete tax year, which runs from 6th April in one year to 5th April in the next.

It is possible that your circumstances have changed in your current tax year. Perhaps, for example, you received a bonus in the taxable year that you do not expect to receive this year.

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