Essential things you need to know as a separated parent during COVID lockdown 2.0: - Part 2: child and spousal maintenance
Here are some further Q&As based on the lockdown 2.0 queries we have received regarding the impact of coronavirus on separated families.
I am concerned about receiving child maintenance due to my ex-partner’s job situation – do I need to go to court over that?
For the vast majority of people, the court does not have jurisdiction to deal with child maintenance, unless it is agreed between both parents as part of any financial settlement on divorce.
For anyone earning less than £156,000 per year gross (£3,000 per week), child maintenance is more commonly dealt with by the Child Maintenance Service (CMS) and the first port of call should be the government guidance.
If either you or your ex-spouse earns more than £156,000 or you have a figure for child maintenance recorded in a court order that was made within the past 12 months, the court is able to deal with any issues that arise. In that event, the factors that the court will consider will be similar to those in proceedings concerning spousal maintenance (see below), although it is not possible to capitalise child maintenance to avoid any future payments.
The first step should be to attempt to agree a compromise position which should be recorded in writing prior to making a referral to the Child Maintenance Service (“CMS”) or an application to the court if agreement cannot be reached.
I lost my job. Do I still have to pay child maintenance?
How arrangements are regulated is relevant. Child maintenance is payable under three mechanisms:
1) You reach an informal arrangement with the other parent, known as a family based arrangements;
2) The maintenance has been court-ordered; or
3) The case is being dealt with by the CMS
Family based arrangement
If you have a family based arrangement, then you should discuss matters with the other parent in the first instance and pay as much as you can afford based on any benefits you are receiving. You should keep a record of payments made.
You will be expected to apply for benefits if you are out of work including Universal Credit, or new style Jobseekers Allowance or Employment and Support Allowance if you have a disability or health condition that affects how much you can work.
You can calculate how much child maintenance you should be paying using the online government calculator.
Our advice is to be transparent with the other parent as to your working situation and sympathetic to the fact that they may also be struggling financially because they have become accustomed to receiving that money each month, so you should try to work together for the best interests of the child.
If the case is not already being dealt with by the CMS, the resident parent could make an application to the child maintenance service, but there is a risk, if the paying parent has lost their job, that the assessment will be nil or very little based on any benefit income received.
Any future arrears can only be obtained after an application to the CMS is paid. You cannot recover arrears with a family based arrangement and you cannot recover arrears that pre-date your application to the CMS.
If the maintenance was agreed as part of an order, you should seek legal advice in respect of the terms of the order. But in most cases, the maintenance included within an order will bind the parties from applying to the CMS for a period of 12 months, but thereafter you are free to apply to the CMS for an assessment.
There is an obligation on parties whose income increases or drops by 25% or more to report this to the CMS if they have previously carried out an assessment. The CMS have said that the following circumstances should be reported to them:
- If child maintenance should no longer be paid due to a change in circumstances
- If you are temporarily receiving statutory sick pay during the coronavirus outbreak
- If you are temporarily receiving no income whilst you are self-isolating during the coronavirus outbreak
- If you have lost your job
The CMS have said that it will take action if child maintenance isn’t paid and may begin collection action to recover unpaid sums. It was previously confirmed by the Department for Work and Pensions in April 2020 to single-parent charity, Gingerbread, that when it comes to non-resident parents, they will accept “verbal evidence of reduction of income but will revert to the previous standards when the crisis is over” because they have redirected resources to deal with an increased demand for Universal Credit. Previously, non-resident parents whose income had dropped would need to provide evidence in the form of pay slips, benefits information or tax returns before their payments would be reduced or stopped. The DWP have said that “anyone found to be abusing the system at this difficult time will find themselves subject to the full extent of our enforcement powers – including prosecution through the courts”.
The DWP reported on 7 September 2020 that it was beginning to reinstate a full enforcement service and where payments have been missed they are taking action to re-establish compliance and collect any unpaid amounts that may have accrued.
My ex and I are now sharing care to a greater extent since COVID but I’m still paying the same amount of child maintenance. Why is this?
The CMS have said that if shared care arrangements have changed temporarily due to the coronavirus, they will not be able to make any changes to the amount of child maintenance you pay or receive because the change in care is temporary.
If the change continues into a longer-term arrangement they suggest you notify them as soon as possible by registering or logging into a self-service account via their website. They have not clarified what they consider to be a ‘longer-term arrangement’.
What is a spousal maintenance order?
Spousal maintenance orders made on divorce require a party to pay ongoing regular sums (usually on a monthly basis) to their ex-spouse. They are made when a party does not have enough income to meet their ongoing expenditure needs and the paying party has sufficient surplus income to make this affordable for them. They are generally made to last for a specific period time (fixed term) but can extend for the remainder of the parties’ lives (known as a joint lives order).
Can spousal maintenance orders be changed?
Unlike capital orders for lump sums, transfers of properties or pension sharing orders which are one-off orders that cannot later be changed, spousal maintenance orders are variable. That means that the amount to be paid can be reduced or increased, the term for payment can be increased or decreased, or the order can be terminated. The only caveat to this is if there is a section 28(1)(a) Matrimonial Causes Act 1973 bar, which prevents the receiving spouse applying to extend the fixed term that maintenance is payable for, but it does not prevent either party from applying to the court during the term to vary the amount paid.
What factors are taken into account when varying an order?
On a variation application, the court will consider all of the circumstances of a case. One of the key factors will be the ability of the paying party to continue to make payments. If a payee loses their job or is on a reduced income, clearly their ability to pay will be reduced.
I am receiving spousal maintenance and my ex-spouse has lost their job. What should I do?
In the current circumstances where so much is changing so quickly, the important thing is not to act rashly and agree to something that you may later regret. If your ex-partner has lost their job, you should be sensitive to that, but if you are relying on those monthly payments clearly your priority will need to be to ensure that your financial position remains secure.
You may want to consider adopting a temporary ‘holding’ position whereby you agree to a reduced level of income for a short-term period, with the understanding that the order remains in force and should be complied with when normality resumes and that the receiving party will not pursue any maintenance arrears in circumstances where the paying party has lost their job. It is extremely important that you do not agree to any permanent change to the maintenance order without taking legal advice.
I am paying spousal maintenance. How do I protect myself during a temporary reduction?
You should bear in mind that arrears of maintenance will accrue during any period in which there is an agreed temporary reduction or cessation of maintenance. Entering into a consent order providing for a binding and enforceable change of arrangements with a remittance of any arrears is the only way to completely protect yourself, but if your ex-spouse is not willing to do this you should as an absolute minimum ensure that any temporary change is recorded in writing and acknowledged by both of you. An email or text message will provide a measure of protection in the event of a later application to enforce arrears.
I am concerned about my income reducing. Can I pay a lump sum rather than pay maintenance?
If you have savings or investments that you can pay to your ex-spouse, you may wish to look at capitalising the order. That means that instead of continuing to receive a monthly sum, you take a one-off lump sum to replace that income and then you and your ex-spouse have a clean break order.
There are pros and cons to this, and the calculations behind a capitalised figure can be complicated, so you should take legal advice before agreeing to capitalise any order.
Should I make a court application?
Given the impact on the court system, resulting in considerable delays, avoiding an application to the court unless absolutely essential should be the default position at present. Instead, try to open a dialogue and consider mediation or arbitration to provide for a non-court dispute resolution process which will be quicker and cheaper than contested proceedings. If you are unable to reach an agreement however or your ex-spouse is being unreasonable, a court application for a variation may be your only option.