Child maintenance: the statutory scheme explained part 1

The topic of child maintenance is notorious as one that causes confusion – including around when the statutory scheme applies, the scheme rules themselves and the different approaches taken by the court when it does have jurisdiction. Matters are made worse by the many acronyms used in the terminology. 

Fortunately, there have been a number of recent cases which provide helpful guidance. This column will first consider the statutory scheme, identifying some potential pitfalls, before moving next month to consider the court’s approach where the statutory scheme does not apply, including recent developments such as the advent of the "HESCA" and the adjusted formula suggested by Mr Justice Mostyn in James v Seymour [2023] EWHC 844 (Fam).

The statutory scheme

The basics

There have been various child support schemes over the years, but the latest scheme, known as the "2012 scheme" has been in place since 25 November 2013. It is administered by the Department of Work and Pensions ("DWP"), via the Child Maintenance Service ("CMS"). The scheme is governed by the Child Support Act 1991 ("CSA 1991") (as amended by the Child Maintenance and Other Payments Act 2008, and various subsequent regulations).

Unlike previous iterations of the scheme, under the 2012 scheme the child maintenance calculation is calculated according to the gross income of the non-resident parent ("NRP"). This information is taken directly by the CMS from HMRC, in an effort to save administrative time.

The CMS has jurisdiction to make an assessment of child maintenance when the child concerned (referred to in the legislation as a "qualifying child"), the parent with care ("PWC") and the NRP are all habitually resident in the UK (s 44(1), CSA 1991). For these purposes the UK means Great Britain and Northern Ireland and does not include the Isle of Man or the Channel Islands (Interpretation Act 1978, Sch 1).

The PWC and the NRP must not be living in the same household in order for there to be a qualifying child (s 3, CSA 1991), which creates difficulties where the parents have separated but are still living in the same property.

If the NRP is not habitually resident in the UK, the CMS will still have jurisdiction in certain circumstances, for example where they are an employee of the civil service (including the Diplomatic Service and the overseas civil service), a member of the armed forces or employed by a company that employs employees to work outside the UK but makes payment arrangements in the UK (see s 44(2A), CSA 1991).

Where an application is made to the CMS, child maintenance will be calculated by reference to the CMS formula. The CMS formula is applied to the NRP’s gross income up to a maximum of £3,000 a week, making allowances for pension contributions. It then takes account of how many other children are in the NRP’s household before making a reduction for the number of nights that the children spend with the NRP. A calculator is available at: www.gov.uk/calculate-child-maintenance.

The impact of charges

There is a charge of £20 for applications for a CMS assessment, unless the applicant is under 18 of a victim of domestic abuse. Once the calculation has been done, the CMS will assume that payments are being made and there will be no further charges.

If payments are not made, the case can be referred to the Collect and Pay service. The CMS will then collect maintenance payments, but there are charges for this service. The recipient will have 4 per cent deducted from the maintenance calculation and the payer will pay 20 per cent on top of their assessment. So if child support is calculated to be £100 a week, the recipient will receive £96 and the payer will pay £120.

Establishing paternity

If a NRP denies paternity, no calculation may be made unless the CMS are able to assume parentage (s 26(2), CSA 1991). A number of scenarios where parentage can be assumed are set out in the legislation. These include marriage and registration as a child’s father. In addition, both parents can be asked whether they consent to DNA testing. If a PWC refuses to consent to testing for themselves or for the child, the case can be closed. If a NRP refuses, they can be presumed to be the parent.

When does child maintenance end?

A child is defined in the CSA 1991 as a person under 16, or a person between the ages of 16 and 19 who is (i) in full-time non-advanced education or (ii) a person for whom child benefit is payable. Non-advanced education means secondary education and so includes studying for A levels or equivalent post-16 courses of study, but not university education.

It is therefore important to know when the child maintenance obligation will end. Children under the age of 16 will fall within the scheme, but if they leave school after GCSE’s they will no longer qualify after 31 August of that year. If they continue to study full time for either A levels or an equivalent post-16 course, they will qualify until the end of their education / exams (for the specific date see s7(2)(1.2) Child Benefit (General) Regulations 2006) as long as they are not in paid work and remain under 20. This remains the case even if they go on to study at university.

Equal shared care

Where the person named as the non-resident parent of the qualifying child also provides a home for that child (in a different household from the applicant) and shares the day-to-day care of that child with the applicant, the case is to be treated as a special case for the purposes of the 1991 Act (reg 50 of the Child Support Maintenance Calculation Regulation 2012).

The effect of reg 50 is that, where there is a division of care in two different households, the non-applicant parent is to be treated as the NRP if they provide day to day care to a lesser extent than the day-to-day care provided by the applicant. Where the facts show equal responsibility for day-to-day care then there is no NRP from whom maintenance may be claimed, and there will be no assessment.

Where the applicant is receiving child benefit in respect of the qualifying child they are assumed, in the absence of evidence to the contrary, to be providing day to day care to a greater extent than any other person.

Day to day care has not been defined, but was recently considered in DW v Secretary of State for Work and Pensions and another [2023] UKUT 19 (AAC). The case emphasises that what matters is the practical and personal day to day care that is provided by each parent. It involves more than the mere counting of days and nights; it involves the exercise of judgement in respect of parenting tasks and responsibilities. In that case it was determined that the parents had equal overnight care of their child, but the mother provided the child with more day-to-day care and therefore an assessment was made against the father, who was considered to be the NRP.

Boarding school or hospital care

Where a qualifying child is a boarder at school or an in-patient in hospital, the person to be treated as providing day-to-day care for that child is the person who would be providing day-to-day care but for that child being a boarder, or an in-patient (Child Support Maintenance Calculation Regulations 2012, reg 55). This is a question of fact to be determined on the evidence of the parties.

Variation applications

When the 2012 scheme was first introduced, it did include unearned income, but this was based solely on the taxable income of the NRP. If a NRP was asset rich but with a low taxable income, the maintenance assessment was also correspondingly low. However, that was resolved by the introduction of the Child Support (Miscellaneous Amendments) Regulations 2018. Where a PWC can demonstrate that the NRP has a legal or beneficial interest in certain assets which exceed the value of £31,250 then the NRP is to be treated as having additional income. This additional income is calculated by applying the statutory rate of interest for a judgment debt (8 per cent) to the value of the assets.

Some assets are excluded from this provision, such as business assets and the NRP’s home, but it does apply to a wide Frange of other assets including land and rights in / over land, money, sums owed to the NRP, shares, stocks, unit trusts, securities and virtual currency which is capable of being exchanged for money. It also applies to any asset which is subject to a trust where the NRP is a beneficiary.

Another ground for variation is that the NRP is diverting income, for example, making excessive pension contributions, or directing earnings through a third party such as a new partner.

As can be seen, navigating the statutory scheme for child maintenance is not straightforward, and requires careful consideration of the rules. Next month, we will move on to consider the court’s approach where the statutory scheme does not apply.

To read part two of this article, click here.

Please note this content was originally published in the Family Law Journal June 2023 edition, best practice section.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, July 2023