A recent Upper Tribunal decision on child support dealt with the issue of a non-resident parent diverting part of his income in order to reduce his liability for child support, which is one of the grounds for varying a child support maintenance calculation. After reading the report of the case I thought it might be useful to have a look at the rules on child support variations, at least as they are under the latest (2012) Child Maintenance Scheme.
Just to explain for those who don’t know, child support is calculated by reference to a formula. The formula has changed numerous times since child support was introduced by the Child Support Act 1991, and under the 2012 scheme it is, for the first time, based upon the non-resident parent’s gross income, rather than their net income. I will not go into the details of the formula here, but obviously as it is a formula it will always produce an exact amount of maintenance payable by the non-resident parent – this certainty has always been a feature of the child support system, replacing as it did the uncertainty of the previous court-based system.
The child support system has, however, always had some flexibility built in, acknowledging the fact that no formula can cover every eventuality. This flexibility has been in the form of variations to the maintenance assessment – basically, where there is some particular circumstance that makes that assessment unfair. Either party can request a variation, although the grounds upon which a variation can be made have always been strictly limited.
Variations can obviously be either upwards, on the basis that the non-resident parent can afford to pay more than the maintenance assessment, or downwards, on the basis that they can’t afford to pay the full amount of the assessment. I shall deal with each in turn.
There are essentially two grounds upon which the parent with care of the children may apply for an upward variation of the maintenance assessment:
- That the non-resident parent has unearned income of at least £2,500 from property, savings, investments or certain other sources; or
- That the non-resident parent has diverted their income elsewhere, in order to reduce their income, and therefore reduce the amount of maintenance they have to pay. The diversion can take various forms, for example giving income to someone else or retaining profits within a company, rather than taking a wage.
The non-resident parent may apply for a downward variation of the maintenance assessment on the basis that they have one or more of the following special expenses:
- Certain costs incurred in connection with their contact with their children, for example travel expenses; or
- Extra expenses incurred by them to look after a sick or disabled child; or
- The repayment of certain debts incurred before they separated from the parent with care; or
- Boarding school fees; or
- Payments in respect of certain mortgages, loans or insurance policies.
The amount of these costs must be at least £10 per week for there to be a variation, save in the case of expenses incurred to look after a sick or disabled child.
If you require further details of the above you will find them in Part 5 of The Child Support Maintenance calculation Regulations 2012.
Photo by Philip Brewer via Flickr