How Child Maintenance is Calculated?

In the following article, we will talk in detail about how child maintenance is calculated and how to apply for child maintenance. 

So let’s first know about the term child maintenance.

What is Child Maintenance?

The term child maintenance can be defined as the authentic and trusted financial support that helps the separated parents to come into mutual agreement towards a child’s day to day basics costs. 

As mentioned in the laws, the parent who receives child maintenance is called the ‘parent with care’ or as the ‘receiving parent’ – and the parent who does not live with the child has to pay for maintenance of the child is known as the ‘non-resident parent’ or as a ‘paying parent’. In some cases, the receiving person can also be a grandparent or guardian.

How to calculate Child Maintenance?

Now, we will discuss the calculation of child maintenance. There are six major steps for calculating child maintenance at present. By following these six steps the paying parent has to pay for the child’s maintenance.

Step 1 – Income 

The very first step to calculate child maintenance is knowing the income or earning of a paying parent.

• Paying parent must have some gross annual income, as it is important to determine how much they have to pay for the maintenance of the child.
• Income means they must have a source of earning from any field of employment, self-employment, some occupational or personal pension.
• CMS will consider the gross annual income before paying for the income tax and any other national insurance. 
• In many cases, the total annual earning amount CMS use to work out child maintenance comes from data given government’s revenue, HM Revenue & Customs (HMRC), by the paying parent.

STEP 2 – Things that affect income

Second step involves finding out factors which are affecting the annual income of paying parents. 

The quantity of weekly earnings at Step 1 is decreased if a paying parent pays offers into a private pension scheme. In this very case, we will have already noted things into account in Step 1 and the paying parent does not require to inform CMS about these all. But in the case if paying parents are making their contribution in another way then they can inform them in another way.

If paying parents receive income from other sources then we have to also take that into account. A paying parent can ask us to take certain expenses into account. These are known as ‘special expenses’ and can decrease the gross earning amount of the paying parents that we use to work out child maintenance. 

By the end of step 2 we know about the weekly earnings of the paying parents.

STEP 3 – Child Maintenance Rates

Coming through both the steps which include income and other things that can affect the income of paying parents, now we reached at step 3. In this step ,we will know about child maintenance rates.

How much a paying parents should have to pay is totally depend on these rates, which are mentioned below:

• If your gross weekly income is unrevealed, then the default rate will be applied like 38 pounds sterling a week for one child, £51 for two children, and £64 for three or more than three children.

• If your gross weekly income is below £7, the nil rate will be applied that is £0 a week. But If your gross weekly income is between £7 and £100 or the paying parent gets benefits, the flat rate will be applied that is £7 a week.

• In case your gross weekly income is between £100.01 and £199.99, the reduced rate will be applied. If your gross weekly income is between £200 to £3,000, the basic rate will be applied which we can calculate by using the formula, or you can use our CSA Calculator.

• However, if the paying parent’s gross weekly income is £3,000 or more than £3,000 then the receiving parent can apply to the court, if they want additional child maintenance.

UK government has a child maintenance calculator, by using this calculator we can easily get to know how much money parents should pay.

STEP 4 – Children we Take into Account

Children who are getting paid by the parent must pay child maintenance for basic day to day needs. After step 3 ,we already know about the rate of child maintenance to apply, now we have to see the quantity of children living with a receiving parent, for whom a letter  for child maintenance has been made.

These are the children we have chosen that a paying parent must pay child maintenance for. The number of these children affects how much a paying parent must pay in weekly child maintenance.

Step 5 – Weekly amount of child maintenance 

Now we say that in the previous four steps, we found out the following: 

• Gross Weekly Earnings
• Any other factor that would change this figure
• Child maintenance rates that apply
• The children we take into account.

Using all the above mentioned information, now in this step we will calculate the weekly amount of child maintenance.

For more information, check our previously published article on Can Foreign Divorce Enforce Child Maintenance Order?

If the paying parent is paying for the maintenance of one child, he or she must pay 12% of his or her gross weekly income. In case the paying parent is paying for the maintenance of two children, he or she must pay 16% of his or her gross weekly income. If the paying parent is paying for the maintenance of three or more children, he or she must pay 19% of his or her gross weekly income.

Step 6 – Shared care

Now the Final step is ‘shared care’. 

This happens when a child who qualifies for child maintenance stays overnight with the paying parent on average at least one night a week for more than 52 weeks. We ask both parents to give us formal, informal proof of any agreement they have reached about shared care. If we agree that there is shared care, the weekly amount of child maintenance calculated in Step five may be reduced. 

Some Frequently asked questions

Conclusion

In conclusion, we can say that this article serves us very small details about how child maintenance is calculated. Many majors topics related to child maintenance are mentioned above. There are fixed rates for paying parents according to their gross weekly income. Depending on that rates, parents have to pay the child maintenance.