Using the Child Maintenance Service and the courts

family law

Let’s set the scene:

You’re a family lawyer with a new client. There she is, a new mother, sitting before you exhausted from lack of sleep and looking nervous.  Her neck is a blotchy red and she tells you that she is single with a three month old baby.

She and her partner have never lived together. They had been together for three years before she became pregnant, but they always lived in their own homes and her home has become messier and smaller with the arrival of the baby. She is not currently working. She has a reasonably well paid job to which she will return in six months’ time.

The father has signed the birth certificate which gives him parental responsibility but he isn’t particularly interested in the baby or her, and their relationship was always blighted by his refusal to settle down. But she thought one day he might. It’s the same old story.

She asks you: What is his legal responsibility to maintain the baby? And does she have any claim for herself given she’s unable to work?

So you ask about the father. What is his financial position?

Your client tells you he is a high earner, but is able to manipulate income, and can more or less dictate what it will be from one year to the next. He enjoys the high life, owns various homes, holidays frequently, drives an expensive car, and has no debt. However, on paper the information sent to HMRC about his income appears to bear no resemblance to reality. He told them and has told her he has a gross income of £35K per annum.

That means he has a child support liability to pay her £81.00 per week for the child.

In reality, this doesn’t go anywhere near helping her to manage financially. How is she supposed to manage even buying nappies for a week while he thinks nothing of paying £100 for a bottle of wine? A buggy for the baby has already cost her several hundred pounds, let alone all the nursery items she has had to pay for.

So what do you, the lawyer, advise?

First you ask what steps she has taken with the Child Maintenance Service (CMS) who now operate the child support scheme, under the Child Support (Maintenance Calculation) Regulations 2012/2677.

The basic formula is that a non-resident parent, depending on whether he has one, two, or three children living with the parent with care, pays 12, 16, or 19 per cent of his gross income up to £800 per week, and then nine, 12, or 15 per cent of his income from £800 up to the new maximum of £3,000 per week.

Solicitors do not usually deal with the CMS on behalf of their clients, (although of course there are some) but on the whole it is not cost effective. Child Maintenance Options  is a service set up to help people broker agreements between themselves, and the emphasis is very much on reaching agreement without using the CMS. They must be approached before the CMS can get involved. I’ve been to visit them, and found them extremely good. I was able to listen to them advising people, completely free of charge, and they are very well trained. From what I saw, they kept very calm and helpful while dealing with some very distressed people. Do remember that if an agreement is made, it is always sensible to have a consent order in court setting out the terms of the agreement so it can be enforced if the payer stops payment.

If no agreement can be reached through CMO, then an application can be made to the CMS. This link is very useful for non-lawyers, and explains the procedure.

Be warned, however, that payments to the CMS and collection and enforcement charges now apply and must be paid by both paying and receiving party. The application fee is currently £20 and the collection fee is four per cent of the payment to the receiving party and 20 per cent to the paying party.

Now back to the client.

The CMS have decided that, in her case, the payment should be £81 per week. They have made that decision after liaising direct with HMRC and learning from the tax man exactly what he says his gross income is. That is what must happen and they’ve done it. What does she do next? She has to act quickly. She must ask for a mandatory reconsideration of her case within one month from the date of the letter informing her about the decision and she must put her request in writing. She should explain why she believes the assessment is wrong. She probably won’t get anywhere unless she can show he is in receipt of additional income, such as unearned income which might come from a trust or a relation, and/or that he has been diverting it by paying it to someone else, or not drawing it from his company which might be possible to discover via the HMRC by CMS accessing and reading his full accounts. I once saw a small footnote in some company accounts that a shareholder had elected not to draw a dividend and it had been carried over to the following year. It was the husband on the other side of my case trying to reduce his income.

The next step after a mandatory reconsideration is an appeal to the Tribunal again within 28 days. I used to chair these appeals under the old system and they are about fact finding, but Tribunal Judges can only remit the case for a recalculation. So it won’t be over then but don’t worry, because the hearing is more informal than a court and the Tribunal Judge will want to get to the bottom of what is going on. However, the old argument under the old rules about lifestyle inconsistency with standard of living has gone. Instead the CMS will rely on documentation supplied to them by HMRC.

The client tells you she has had a mandatory reconsideration and has got nowhere. She has no evidence to help her. She is going to an appeal and you advise her to ensure the CMS has also demanded all the relevant information from his accountant, which they have power to do A variation of a CMS assessment usually can’t be made within 12 months and it’s intended that every 12 months a reassessment is made anyhow.

So much for the CMS and self-help. What can be done in the courts to help her? As she was never married and she never contributed to any property, her claims are limited to those she can make on behalf of her child.

You advise her about Schedule 1 Children Act 1989 and the claims for child maintenance, school fees, lump sum, property adjustment, and costs orders that can be made against him. In some cases, a “Carer’s Allowance” can be made too, which is an income payment for her, to enable her to care for the baby and allow them to live to a comfortable standard.

All sounds good. And indeed in theory it is, but… and this is where you sigh…

He really does have to be demonstrably rather rich. If he isn’t, the route to any increased child support is circuitous and it takes longer and involves her going back to the CMS.

So let’s compare and contrast what happens with the very rich and everyone else.

First, we have an eye watering case (well into “Gasp Territory” as one astonished barrister described the claims of an ex wife in a recent finances on divorce case) but a phrase that equally applies here. The billionaire father of a child was ordered to pay £204,000 per annum to the mother for the upkeep of a child. Housing provision had been made on terms that the property reverts back to the father when the child is no longer a minor or in full time education. The mother wanted £750,000 per annum income and with £204,000 upheld by the Court of Appeal, was demonstrably unhappy.

But in our case, the only maintenance our client can claim is limited to the CMS assessment alone, because unlike the billionaire above, this father has not been assessed to be earning the maximum by the CMS, which is £3,000 per week income. As such, under the CMS regulations, “top up” payments to increase the basic award can’t be made by the Court. But (tongue in cheek) don’t despair. School fees can still be paid. Not much use for a mother of a three month old baby, though.

So what redress can she get from the court?  In addition to providing her with a more suitable home for her and the baby, until the child finishes full time education or is a no longer a minor (whichever is the sooner), she can also apply for a lump sum or lump sums, instead.

But…

In Dickson v Rennie, Mr Justice Holman made it clear that the minimum income figure to trigger top ups is £3,000 per week without which no more would be paid and, for good measure, made it clear that lump sums were not to be used as disguised maintenance.

So no comfort there. However what our client can do is ensure that in the court case, when disclosure of documents is made, an application can be made by the CMS for the court to release those documents. The client can’t send them, because there is a duty of confidentiality.

So, in terms of income provision, it’s not great is it? I wasn’t happy when I wrote about Dickson v Rennie in 2014, and I’m not overjoyed now. Given that the CMS so obviously want to offload child support as far away from themselves as they can, I’m wondering if it isn’t now time to give more power back to the courts? I don’t see the sense of needing at least £3,000 a week income before a top up may be claimed, which leaves others struggling. Why have an arbitrary figure at all? Why not require a CMS assessment first and then top ups as advised?

Having said that, there is an intentional difference between provision on divorce and provision for an unmarried mother and her family and here we are seeing it. And in the same way we still are seeing the difference for the very wealthy too. £204,000 per annum is a fortune for most – for the mother of the billionaire’s child, it is a drop in the ocean.

So what’s the best advice to give this client?

Keep going with the CMS, apply also to the court and go for capital orders of a lump sum  (say to cover furnishing a new home and a nursery) and lump sums (to cover future capital expenditure) and a new home which will be placed in a trust. Ensure there is full financial disclosure and keep the CMS aware of what they should be applying to court to obtain, or from his accountant. Finally, make it clear that the court costs of this exercise will be paid by him unless he sees sense. And then, who knows? Head to a good lawyer and mediator who knows this very complex area of the law.

NB. As I was coming to the end of my research for this post, I came across this excellent summary of the current law by Samantha Hillas of St Johns Chambers in Manchester. I do recommend a read, particularly for lawyers.

Photo by mrhayata via Flickr under a Creative Commons licence.

Marilyn Stowe

The founder of Stowe Family Law, Marilyn Stowe is one of Britain’s best known divorce lawyers with clients throughout the country, in Europe, the Far East and the USA.

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14 comments

Jo - July 1, 2016 at 6:47pm

Good stuff! But from experience I know that the CSA won’t go to his accountant, even if you furnish them with their name and address. In fact, when I threatened to apply for a Judicial Review, then they began to investigate the NRP who had already been found to be diverting their income, by a previous Tribunal, and should have been paying the maximum.

However, they still didn’t change the assessment until the next Tribunal decided exactly the same as the last! (By which time he had run up an ‘arrears’ of £35,000)

Here’s my question…the NRP should have been paying the maximum since at least 2012. Therefore the courts have had jurisdiction (in retrospect) throughout the past four years. Would you say that the ‘arrears’ were not, therefore, CSA arrears but actually a lump sum in lieu of child maintenance? And Kehoe should be irelevant as there was no maximum assessment in that case!

Sam Hillas - July 1, 2016 at 9:13pm

Thank you, Marilyn. Great article.

I have an updated version of that handout if it is of use to anyone.

Re the previous post. There are some specific rules relating to the backdating of Schedule 1 top up orders which might assist you. Very brief note on it in the handout.

Sally - July 1, 2016 at 10:31pm

Unfortunately there are too many fathers out there who cook their books on purpose so they don’t have to pay the correct amount to the mother. They don’t consider the kids needs only hurting the mother. My ex husband pays the bare minimum for his two children that barely covers their school lunches. He lives with the matrimonial solicitor who took my pension from me and half of my home and advocates him earning cash and not declaring it all. Having no children of her own she clearly has no understanding of the cost of raising children. My ex has said if I go through the CMS ill get less which I doubt as he’s bought a new Mercedes van and having a new extension built plus bought s house two years ago , how he ever managed to get a mortgage on £13k a year I’ll never know. Anyway having heard other mothers in the same position I think a lot more needs to be done to weedle these cash earners out of dodging paying for their kids.

The Devil's Advocate - July 2, 2016 at 2:23am

This is all well and good and enshrined in stone by Judge Jeffrey in 1989. But it is part of an anachronism which is so far up the duff, it us a laughing stock.
Money for parental responsibility but not full comprehensive engagement rights l think not.
You Advocates need to heed the warning.There is a tsunami of underground movement in the political SIAL..which you need to be in the know. .But of course you don’t need to be as long as you can grab your £350 an hour fee! from gullible clients…what matters morals not in your books.
Well 17 million folk in this country who are like the peasants, beginning to revolt over all family issues including the pound. ..(sorry still kilograms) of flesh….but not for long.
H’m 17 mill an interesting figure this…reminds me of another one…mind you these were duped by the lies of the Brexiters…but surely not all Advocates were amongst them
Look to Brazil and Mexico and them take a deep bathe and swallow and do so hard…for the barges of morality are arriving on the beaches and you’re on for a surprise which you should have known about but you did nothing!!!!!

Andy - July 3, 2016 at 7:06am

Very very volatile subject.
As normal NRP’s and through PAYE is calculated as income earned.Any additional income will only be calculated through what is submitted to HMRC.
The clever NRP will divert all income and only support what he or she thinks as income to CMS…
In relation to this. But it seems that the Father is stereo typical in all this what if the Mother did the same hing but left the child with the father…you would only see he same result..so,who is the honest one..neither in this case…

CMS are so poor at what they do and so incompetent that as a father who is n the situation of dealing with the CMS that what ever you do they just carry on and you will pay…

There are plenty of ways to reduce your payments as the CMS say your ex partner can have uncapped earnings but the NRP cannot…so no wonder the NRP is so angry that the system enforced payments and hides behind it is for the children. What a load of crap…
The stereo typical mother in instances wants life style payments and lump sum payments and hold a full time well paid job…

As this is a government review of the new CSA to CMS same name,same incompetence and same calculations….

spinner - July 3, 2016 at 2:43pm

If you had some form of accountability for the money paid as in if requested the NRP could ask the CMS to audit the payments to make sure they were being spent on the children I believe that would encourage a lot of NRP’s to cooperate with the system. Some just won’t and court and so on for them but I think a lot of NRP’s just get annoyed at handing over cash for their children and then have to continue to spend cash on their children when the mother spends it on themselves.

Lee - April 19, 2017 at 10:01am

Obviously you think all women do this ! Well it might just be nice if a rich man would pay part of utility bills, Petrol , heat etc and not just part of his own kids food bills . This attitude you have is just your personal experience , same as me. However having hundreds of thousands of assets and classic cars , spending money for fun , whilst kids put no 30 on the list of priorities is real too . My kids get everything . Fish and chips or the shard ! Always a good comparison in my eyes .

JamesB - March 27, 2017 at 3:17pm

Stitching ex partner of single parent up not a solution to the welfare state encouraging bad behaviour argument. It just encourages single parenthood and less marriage and breakup of society. If both parents did worse, rather than the parent with care rewarded by lawyers and government for chucking her or his ex out, then there would not be as much break up and agree that should be the goal rather than the unedifying spectacle of fighting for chairs on the titanic which is what the west has passing for family law much of the time, perhaps they could learn from the east in that regard.

JamesB - March 27, 2017 at 3:18pm

p.s. yes my wife is from the east and a less entitled upbringing and more family orientated with less divorce and state interference.

JamesB - March 27, 2017 at 3:19pm

They still don’t have divorce in her country of origin, it is against the law. I could write you an article on it if you like.

JamesB - March 27, 2017 at 3:22pm

People sort their own problems out there rather than running to a lawyer or the government or the school girlfriends expecting others to which makes it worse.

Lee - April 19, 2017 at 9:54am

Hi Marilyn
Your article is spot on . I wanted to say I’ve written many times to my Mp who has written to the welfare secretary, basically about the court needing jurisdiction . The cms have been less than capable in my case , sending 6 letters to enable me to go to hmrc for a tribunal . 6 incorrect and after 4 months it’s been refused as they dated it 2016 not 2017 . Over year and half fighting , and no nearer, I believe court needs the jurisdiction with schedule 1 as the mandatory reconsideration system is enough to make you lose the will to live.
If there is evidence of many income diversions and non disclosure then the courts need more power . Try address this to welfare officer at Parliament and they go off on other tangents . Cms, top up etc needs addressing in high court . Meanwhile my children are 3 half years older and I’m no closer than when I first split after 13 years with two children . This lacuna needs shutting down . Mostyn or whoever made these rulings these to sit in on some case studies , as I feel I have been given a gauntlet challenge because nobody really cares! How many simply give up ? Especially without legal aid . Somebody needs challenging in high court and parliament

Lee - April 19, 2017 at 10:11am

Can anybody help please . Digested every schedule 1 financial remedy article position and been representing myself . Difficult due to non disclosure and compulsive lies. I am wanting to ask if you can evident many many income diversions and about to throw in the towel with the cms gauntlet, can you apply for interim pending hmrc appeal ? Based on fact your cms payment should be at least double ? Can you try to claim cms
Under payments as capital until you nearly die running the cms hmrc gauntlet of death by incompetence ?

Tom - September 2, 2017 at 4:10am

i,m a none resident parent who has always paid reguler maintenance for my children. In May 2016 i immigrated and started a new life for myself . Prior to moving I checked my legal responsibilities regarding one of my twin sons who is still at home as the other had been thrown out as soon as he was sixteen and now lives in my flat which is now his and has a reasonable job.
His twin who is sverly disabled who is now 19 attends college one day a week for 6hrs. For some reason my ex gets child benefit for him the legislation regarding child benefit clearly states a child at further education must attend for min average of 13hrs a week. So she has lied to the dwp and due to data protection they are not allowed to ask the college for his attendance hrs only if he attends the colllege. They can how ever apply for a court order which obviously they wont. My point being as she is in reciept of child benefit the CMS have now started to arrest my pension to the tune of 365 pounds per month i only get 900 pounds per month so im now in a desperate situation as the country i live in my visa does not allow me to work or i could be sent to prison deported or both plus a substantial fine. the fine would have to be paid before i would be released from prison.
i have supplied all relevent information witness statements etc to CMS but choose to ignore it.
They actually owe me approx 6,000 pounds but again refuse to investigate or aknowledge it.
they are just like a bully with a big stick and thier driven by perfomance targets and KPI’s key performance indicaters.

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