"Many of those affected will have a financial obligation to pay maintenance – either for their children or their former spouse. What can they do to reduce those obligations, either temporarily or permanently?"
As we head into winter, with more restrictions being introduced across the country, and the replacement of the furlough scheme with the Government’s job support scheme, it is likely that more households will suffer a reduction in income.
Many of those affected will have a financial obligation to pay maintenance – either for their children or their former spouse. What can they do to reduce those obligations, either temporarily or permanently?
Child maintenance via agreement
If the arrangement to pay child maintenance is pursuant to an informal agreement, then the first step is for the person affected to explain the situation to the other parent and try to agree a reduction in the amount paid. This can be either on a permanent or temporary basis, depending on the circumstances and whether the change in income is likely to be long term or not. If they are successful in doing so, then they can simply begin paying the new sum, keeping a record of what has been agreed. It may also be sensible to agree to review the new arrangements regularly going forwards until matters have stabilised.
If it is not possible to agree a reduction in maintenance, then the next step is to apply to the Child Maintenance Service (CMS). The CMS will carry out an assessment and will calculate how much child maintenance should be paid.
Child maintenance via CMS assessment
If there has already been a CMS assessment, it will adjust its calculation if the payer’s income has changed by 25%. As a first step, it’s worth them contacting the CMS and discussing the changes to their income directly.
The CMS has stated that if the paying parent has lost their job or is temporarily receiving no income as a result of self-isolation, these changes must be reported by telephone, and not online.
Child maintenance via court order
If the child maintenance is paid following an order made by the court before the Covid-19 pandemic, and it has become unaffordable, then it is worth the payer approaching the other parent to try to agree a temporary alternative sum. If they are able to reach an agreement, the new sum will need to be set out in a formal court order to vary the original amount.
If agreement cannot be reached, and the original order is at least 12 months old, then the next step is to apply to the CMS for an assessment that will then override the court order.
Former spouse maintenance
It is most likely that maintenance paid for the benefit of a former spouse is paid pursuant to a court order. This is because, even where a separating couple have reached an agreement between themselves regarding maintenance, it ought to be recorded in a court order.
It may be that as a result of a reduction in income, the payer can no longer afford the maintenance he or she has been ordered to pay. It is important to note that an order applies unless it is varied, and therefore unilateral changes to the amount cannot be made.
Again, the first step is for the payer to speak to their former spouse. It may be that they are able to agree a reduction. If this is the case, that agreement can be drawn up into a formal court order that varies the original sum.
Where it is not possible to agree, the paying spouse will need to apply to the court for a variation. It is, however, worth noting that this is neither a quick or cheap process. Financial disclosure will need to be given, and the court process followed. The costs can quickly outweigh the benefits of any reduction. Careful advice will therefore need to be taken, and it will be in both parties’ interests to try to reach an agreement as quickly and efficiently as possible.
Clearly, this is a multifaceted process for any separated couple, and one that their financial advisers should be clued-up on in order to best support them through this financially and emotionally turbulent time.
