Understanding Child Maintenance in the UK: How the CMS Calculates Payments

The Child Maintenance Service (CMS) is a UK government department that manages child support payments to keep most child support claims out of the court system. While it is not compulsory to use the CMS, parents can opt for their own arrangements. However, if a case is opened with the CMS, private arrangements are canceled, and the CMS takes over, issuing a legally enforceable payment schedule.

Key Points about the Child Maintenance Service (CMS):

• CMS Takeover: Once a case is opened with the CMS, private payments should cease as they won't count towards CMS payments.
• First Payment: The first payment due date can be up to 2 months after the case is opened, though it usually happens sooner. Any arrears accumulated in this period are spread over future payments, not due as a lump sum.

How CMS Calculates Child Maintenance: The CMS uses a straightforward formula to determine payments. Here's a breakdown:

1. Gross Weekly Income: The paying parent's gross weekly income is divided into bands.

   • Income Bands:
     • Up to £100 or if on benefits: Flat rate of £7 per week.
     • £100.01 to £199.99: Reduced rate.
     • £200 to £800: Basic rate.
     • £800.01 to £3,000: Basic plus rate.

2. Percentage Based on Number of Children:

   • One child: 12% of gross weekly income.
   • Two children: 16% of gross weekly income.
   • Three or more children: 19% of gross weekly income.

3. Shared Care Reduction: The amount is reduced if children spend a certain number of nights per year with the paying parent:

   • 52 to 103 nights: 1/7th reduction.
   • 104 to 155 nights: 2/7th reduction.
   • 156 to 174 nights: 3/7th reduction.
   • 175 or more nights: 50% reduction plus an additional £7 reduction.

Example Calculation:

• Gross Weekly Income: £600
• Number of Children: 2
• Shared Care: 104 nights per year

Calculation:

• Basic rate for two children: 16% of £600 = £96
• Reduction for shared care: £96 - (£96 * 2/7) = £68.57
• Final weekly payment: Approximately £68.57

Additional Factors Considered by CMS:

• Additional Income: Bonuses or overtime pay can affect payment calculations.
• Other Children: If the paying parent has other children, their taxable income used for calculations is adjusted.
  • One other child: Income reduced by 11%.
  • Two other children: Income reduced by 14%.
  • Three or more other children: Income reduced by 16%.

Unemployment and Benefits:

• If the paying parent is out of work and claiming Universal Credit, they typically pay £1 per day, amounting to £7 weekly.

Pension Contributions:

• Pension contributions can also reduce the income considered for child maintenance calculations.

Using the CMS ensures that child maintenance payments are calculated fairly and enforced legally. Understanding how these calculations work can help both paying and receiving parents manage expectations and plan accordingly.

For more detailed information and specific advice, it's recommended to visit the official CMS website or consult a family law professional.

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Problems WIth Child Maintenance The Nil Rate

Child Maintenance Loophole Closed!

Child Maintenance Loophole Update: What You Need to Know In this video, we discuss the recent changes to the child maintenance payment rules that took effect in October 2023. Previously, paying 90% of the due amount was considered acceptable, but this is no longer the case. Now, any payment less than 100% is treated as a missed payment, potentially putting you on the Collect and Pay system. Key Points: Old Rule: Partial payments over 90% were acceptable. New Rule: 100% payment required; anything less is a missed payment. Consequences: Missed payments can lead to being placed on Collect and Pay, incurring extra fees and potential delays. For receiving parents, think carefully before reporting a missed payment. Moving to Collect and Pay could result in a 4% collection fee and possible delays of up to three months for setting up a DEO (Deduction from Earnings Order). Advice: If the payment is slightly late or slightly under, consider waiting to avoid the complications of Collect and Pay. For regular missed payments, there are appropriate reporting mechanisms. 💡 Subscribe for more updates and leave your questions in the comments! #cms #csa #childsupport #childmaintenance #childmaintenanceuk #childmaintenanceservice #childsupport #dwp #hmrc #childbenefit #ChildMaintenance #ChildSupport #CMS #FamilyFinance