Stop CMS When Child Quits Education?

 Introduction

Good morning! I produced the video below in June 2022, but its still relevent today. During the summer months, many parents are grappling with the decision of whether to continue making child maintenance payments, especially now that some children have completed college and are either starting jobs or heading off to university. The answer to this question isn't entirely straightforward; it depends on a few factors that I'll explain, in the article and the video.

The Importance of Child Benefit Cut-Off Dates

To shed light on this matter, it's essential to grasp the significance of the child benefit cut-off dates. Suppose a child has been in education and has recently finished exams, perhaps around mid-June. In that case, the child benefit agency will continue to provide child benefit payments until September. Consequently, child maintenance payments will typically follow this timeline and be cut off around the same time. This practice is rooted in the observation that many students often return to college for further studies or take time to figure out their future path.

The Four HMRC Child Benefit Cut-Off Dates

Here's a piece of information that often escapes notice: child benefit has four cut-off dates throughout the year.

    28/29th February

    31st May

    31st August

    20th November. If these dates are a Sunday Child Benfit Stops. If not, it continues to the following Sunday which will be at the beginning of the next month.

So, let's get to the crux of the matter: if your child concludes their education before June and starts a job, child benefit should have ceased by 31st May, or a few days after. Conversely, if they finish their education after June 1st and subsequently become unemployed, child benefit will continue until the end of August with potentially covering the period up to around September 6th of the same year depending on when the first Sunday is from 31st August.

A Real-Life Example

Allow me to illustrate with a recent case I handled. In this scenario, a child completed their education in April, and the Child Maintenance Service was informed of this in May. However, the service still insisted on receiving child maintenance payments, citing the ongoing child benefit payments. A swift contact with the child benefit agency clarified matters. As it turned out, since the child had left education in April, child benefit should have completely stopped by June 1st. This clarification swiftly resolved the case.

Takeaway: Know the Cut-Off Dates

To sum it up, if your child wraps up their education before June and enters the workforce, the Child Maintenance Service should cease payments from June 1st. This is because child benefit payments should also have ceased. If, on the other hand, they leave education after June, the next crucial cut-off date is around September 4th or 5th.

Conclusion

I hope this explanation has shed light on the often-confusing issue of child maintenance payments. It's important to understand the interplay between child benefit cut-off dates and child maintenance payments to ensure that both parents and children are on the same page. Remember, if your child concludes their education before June, their path into the workforce should also mark the end of child maintenance payments. For those finishing education after June, expect child maintenance to continue until around September. If you have any more questions, feel free to reach out. Have a wonderful day, and I'll catch you later. Cheers!

Child Benefit and Child Maintenance

Navigating Child Benefit and Its Impact on the Child Maintenance Service

Child Benefit and Child Maintenance Whether you're a parent, grandparent, or caregiver, understanding the ins and outs of child benefit and its connection to the Child Maintenance Service (CMS) can prove to be invaluable. In this post, we'll delve into the qualifying criteria for child benefit, debunk some common misconceptions, explore the nuances of the former 50k rule, now 60K as of 2024. Shed light on terminal dates, and address the intriguing interplay between child benefit and CMS, where the CMS use the payment of child benefit to presume the primary carer. So, without further ado, let's dive into this essential topic.

Qualifying for Child Benefit: Child benefit is a financial support system designed to assist parents and caregivers in raising children. It's not solely limited to biological parents; even grandparents, foster parents, and adoptive caregivers can claim child benefits. One key aspect to remember is that only one individual can claim child benefit at any given time, for one child. Traditionally, it has often been claimed by mothers, but recent developments challenge this norm.

Dispelling the 50k Rule Misconception: The so-called "60k rule" concerning the clawback by tax of child benefit, has caused confusion for many. Contrary to popular belief, earning over 60k does not automatically disqualify you from claiming child benefit. The rule, introduced a few years ago, stipulates that if your income exceeds 60k but remains under 80k, a portion of the child benefit may need to be repaid. However, this doesn't mean you can't claim it. There's a third option: you can claim child benefit but opt not to receive it. By choosing this route, you avoid having to repay the benefit.

Terminal Dates and the School Calendar: Child benefit payments follow specific terminal dates throughout the year – end of May, August, November, and February. These dates may seem tied to the school year, but the connection isn't as straightforward as it seems. For instance, even if your child finishes school in May, child benefit continues until the end of August if they're still involved in educational activities. College attendance and changes in education status can impact when child benefit payments cease. Its slightly complicated further as Child Benefit is paid in weekly blocks, so although the 31st August is a Terminal Date, the Child Benefit will finish on the first immediate Sunday. So if the 31st August was a Friday, the Child Benefit would be payable for a further two days to cover the Child Benefit week which is Monday to Sunday.

Child Benefit and CMS: A Complex Interaction: While child benefit and CMS are interconnected, they operate on distinct criteria. CMS, based on shared care, calculates payments considering the child's overnights with each parent. Child benefit, however, focuses on day-to-day care. This creates a potential conflict, as one party might be receiving child benefit while CMS deems the other parent as the primary caregiver due to overnight arrangements.

The Intriguing Grandparent's Loophole: An interesting loophole emerges when a child who is already receiving child benefit has a child of their own. If the original recipient's circumstances change, their CMS payments may stop. However, if another relative, such as a grandparent, claims child benefit for the grandchild, CMS payments might continue despite the original recipient's change in circumstances.

Ethical and Legal Responsibility: It's essential to approach child benefit and CMS with honesty and responsibility. If your circumstances change and you're no longer eligible for child benefit, it's both morally and legally imperative to report this change to HMRC. Failing to do so can lead to serious repercussions down the line. Remember that any child maintenance paid based on inaccurate information might need to be repaid.

Change of Carer: It is common for there to be a change of carer reorted to CMS. Equally it is also common for the change of carer to be rejected due to a challenge or a lack of evidence. CMS used the payment of Child Benefit to evidence the pruimary carer. So if that changes, the records with the Child Benefit Agency need to reflect the change. Therefore where parents change from being carers, the new primary carer must make an application to the Child Benefit Agency to claim the Child Benefit. If they dont its highly likely that the CMS will reject the change. In my own experience, when both parents stated the child was not in education, CMS still ran a child benefit check, and would not initially stop the CMS payments due to Child Benefit being paid, even though both parents said the child had ceased to be in education.

Conclusion:

Understanding the intricacies of child benefit and its relationship with the Child Maintenance Service is crucial for any parent or caregiver. Whether you're clarifying the 60k rule, navigating terminal dates, or pondering the ethical implications of claiming child benefit, being well-informed empowers you to make the best choices for your family's financial well-being. As regulations and laws continue to evolve, staying up-to-date with the latest information ensures you're equipped to make informed decisions.

We hope this blog post has shed light on the complex yet vital topic of child benefit and its impact on the Child Maintenance Service. If you have any questions or insights to share, feel free to leave a comment below. And if you found this post helpful, remember to like, subscribe, and share it with others who might benefit from this information. Thank you for joining us on this journey of understanding child benefit and CMS. Wishing you all the best in your parenting and caregiving endeavors! For clarity, this post relates to the Child Maintenance Service and the payment of Child Benefit in the United Kingdom. Further Information: Child maintenance can be a complex topic to navigate, especially when it comes to understanding what it covers and what it doesn't. If you're new to this blog, don't forget to join us on Youtube. Out Youtube Channel can be subscribed to at: https://www.youtube.com/channel/UCmKdH63SQdlSqqFwkc4hAKQ?sub_confirmation=1 Please like and subscribe to receive future videos on similar topics right in your YouTube inbox. This article was updated in 2024 due to the government changing the 50K threshold to 60K.

How To Pay Child Maintenance.

                                                

This article assumes that an application has been made to the Child Maintenance Service (CMS) and that a schedule of payments has been issued by the CMS.

So you have received the payment schedule and you are wondering what to do next.  First thing to do, is to read the schedule.  It might say you have to pay £50 per week, but there might be arrears meaning that you have to pay £55 per week.  So skip past the headline figure and go to the table where it says on what day you have to pay and how much.  


Its common to have arrears at the beginning of a case.  This is because payments are calculated from the date the case is opened, but there could be a two week delay as the CMS collect details and produce a schedule.

All arrears are normally paid off over the course of the year.  So make sure you are following the schedule so that the arrears disappear over the year.  Never pay the arrears figure.  Ignore it.  Only pay the payment figure.

Here are the tips for paying.

1.  Rule number one is never pay cash, unless the other person is going to sign for it. 

2.  Rule number two is never pay by cash, even if the other person signs for it!

3.  Pay by standing order so you never miss a payment.

4.  If you cant pay by standing order, pay by bank transfer.  Set a weekly alarm on your phone so you dont forget.

5.  Dont use the childs name as the reference.  It could be argued, its a gift.  For the reference, make sure you put CMS or Child Maintenance

6.  Use the parents Name for the Name to pay to followed by Maintenance if there is room.
  

        ie.   Amy Short maintenance

If you follow steps 5 and 6 it should show on the bank statement of the receiving parent as 

               Amy Short Maintenance CMS 

7    Use one bank account to make payments from.  Dont use it for anything else.  At some point you may have to use the statement to prove payments.  You don't want others to see your salary and expenditure.

8   Pay the exact amount due, on the day it is due.  Never pay late or early.

9.  When you first speak to the CMS they will arrange a payment schedule and will ask you what frequency you want to pay.  Avoid paying on Mondays due to the large number of bank holidays, as that means you will be late at least 5 times per year.  Also consider avoiding a Friday schedule unless you get paid on a Friday.  At least one Friday per year is a bank holiday, ie Good Friday.  Sometimes Christmas Day, Boxing and New Years Day are also on Fridays.

10  If you dont know the account to pay it to, ask the CMS to log the fact you don't have the account details.  They will get them for you.  Chase daily until you have the bank details.  If you do not have the bank details within two weeks, ask the CMS to close the case as the other partner is being non compliant.  Save the money until you have the details and then pay it.

11  Don't pay online via the portal.  It wont get to the other parent on time, so you will be late, and you may be charged up to 20% for doing so.

12  Tick the payments off of your payment schedule as you make them.

13  If you receive a salary increase, pay some of the salary to the account so that you have the money ready when the payments are revised upwards.  

14.  Do not arrange to pay the day before pay day if you struggle to budget.  If you are paid weekly on a Friday, don't agree to pay every Thursday as you will be late at some point if you have spent too much money.  If you arrange to pay monthly, don't ask to pay on the 28th of the month if you get paid on the last day of the month.

15.  If you pay monthly, choose a day between the 1st and the 28th.

16.  Child Maintenance is a priority bill.  Do not forget to pay or you could be put onto a DEO.  That will cost you 20% more money.

17.  Only pay what the schedule says.  Build up a reserve in case your payments are increased.  You will get no future credit for underpaying or being late in the future even if you paid extra previously.

18.   If in arrears and a schedule is arranged.  Demand to pay arrears off at £5 a week, dont over commit yourself.