People are asking me whether maintenance payments can be reduced during coronavirus lockdown?
As we move into the fourth week of lockdown and social isolation for the coronavirus / Covid 19 crisis the situation is starting to
have a serious impact on many people’s financial circumstances. Despite the government’s attempts to reduce the economic effect, people have lost their jobs or been furloughed, and self-employed people and businesses have seen revenue plummet.
As with most questions about maintenance, the answer is in two parts – maintenance for children (child support) and maintenance for husbands and wives (so-called “spousal maintenance”). There is more information about each of these topics on the main website.
For most parents maintenance for children is determined by the CMS (Child Maintenance Service) scheme. Many parents don’t actually ask the CMS to calculate or collect maintenance for them, but the CMS formula lurks in the background because it is the default position and many parents use formula to work out how much child maintenance should be paid, which is relatively simple . There is an online calculator on the government website which you can use to work out the amount of maintenance payable in a few comparatively straightforward steps.
The starting point for a CMS calculation is the figures in the payer’s most recent tax return, so losing your job, or experiencing a sharp reduction in your income would not automatically change the amount payable. But under the CMS scheme the payer can apply for a recalculation, if his or her gross income drops by 25% “for the foreseeable future”. The CMS then recalculate based on the new figures. As long as the change of circumstances is notified promptly (usually within 14 days) the figure payable will be backdated to the date of the change. Generally they require documentation or information from your employer or your accountant to suppport the application.
As ever, when it comes to maintenance paid for your former husband or wife (spousal maintenance) the answer is more complex and vague. It is possible to apply for a variation of the figure payable in a spousal maintenance order, but the outcome is less certain. The court would review the level of maintenance applying similar principles to those which applied when the order was originally made. There is a fuller discussion of this subject on the main website, but broadly it involves a review what the recipient of the maintenance needs, cross checked to the ability of the payer to pay. The courts are probably bracing themselves for a flood of such applications but so far it has not happened, so there is no general pattern to report. If the payer’s income has collapsed, a reduction seems almost inevitable unless he or she has significant reserves to draw on.
Applications to vary maintenance orders are expensive if they go to court. They also need to be handled carefully because the general principle that each party pays their own legal expenses in financial remedy proceedings does not apply to a variation of maintenance case. So getting it wrong could be very expensive indeed.
In practice, and perhaps in the spirit of the times, a pragmatic approach is needed. You both need to recognise that in the majority of instances both parties will be experiencing changes in their income. If the person receiving the maintenance has another source of income, perhaps a job, that may also be under threat. So it may be sensible to agree some sort of change, perhaps for a limited period with an agreement to revisit the question at that point.
If the payer is subject to an actual CMS assessment, then the change would have a to go through them, otherwise the liability continues at the same level. If you are dealing with child maintenance or spousal maintnenace by an agreement then the same level of formality is not needed. If spousal maintenance is set out in a court order it would be possible to apply to the court for a formal variation, but in practice that is not necessary or expected. A clear record in correspondence of an agreement to vary would be sufficient in most cases to prevent the receiving party from trying to enforce the arrears arising from the shortfall at some future date.
John Pratley is an expert divorce lawyer, who has more than 25 years experience advising clients purely about divorce and related family law issues, such as the financial consequences of separating and divorcing. After establishing the first niche family law practice in Bristol, and going on to senior management roles in a national firm, John set up Apple Tree Family Law in 2018. Apple tree family Law solicitors specialise in advice about divorce and financial issues.
We are based in Bristol and Exeter, but we have clients all over the UK and further afield. We offer, simply, clear and accurate advice about divorce and family law issues, and the very best client service, for a clear and reasonable price.