Child maintenance is calculated using a specific formula defined by legislation. However, the amount can be adjusted through the Variation Scheme, which allows for additional factors to be considered for either an increase or decrease in the maintenance amount.
Applications
Applying for a Variation may be necessary to achieve a more accurate maintenance calculation. This process allows for special expenses to be considered, which can reduce the maintenance amount, or for additional income to be considered, which can increase the maintenance amount.
Applications can be made in writing or verbally, though in some cases a variation form is required. If you receive a form, it is crucial to return it within 14 days.
Failure to do so may result in the application being rejected.
Special Expenses Variation:
Contact Costs
If you incur expenses to maintain contact with the child(ren), you are entitled to make a claim for those costs to be considered. However, the list of allowable expenses is limited and pertains solely to the costs of maintaining contact with the child(ren). It does not cover costs incurred during any contact period.
School fees
School fees in general are not considered, but if the costs include any boarding element these can be considered under the variation scheme.Cost of supporting long term illness/disability
Subject to restrictions, if a child in the paying parent’s household has a long term illness or disability which incurs extraordinary costs, those costs may be considered under the variation scheme.
Prior debts
Certain debts incurred before the separation may be considered under the variation scheme, but the receiving parent or qualifying child must still benefit from the item associated to the debt in order to qualify. Seek further advice if you think this applies to you.
There are thresholds that apply for some of these categories, so making an application will not automatically guarantee a change in maintenance payments.
For each category that does succeed, an allowance is calculated, and the aggregate sum is deducted from the gross income before the calculation is completed.
Additional Income Variation
Unearned Income
The most common variation is unearned income relating to dividends paid to a director of a company. It is common practise for a director to take a low salary, supplemented by dividends. Under the variations scheme, the dividends are added to the low salary and maintenance is calculated on the entire combined income.
Other unearned income includes rental income, or miscellaneous income. The unearned income must be more than £2500pa to be considered.
Additional Income
This is a less commonly used option. It applies where child maintenance has automatically achieved a nil or flat rate because the paying parent receives a particular benefit.
If the paying parent also has earnings it is possible to have that income taken into account and over ride the automatic nil/flat rate.
National Income
This aspect of the variation scheme is more complex, as it does not pertain to income declared on tax returns or payslips. National income refers to an amount deemed to be available rather than declared, and can be identified through either.
Assets
Since December 2018, CMS reintroduced the option for national income to be determined against assets that exceed £31250
Diversion of Income
Available where the paying parent has the ability to control his income, and has taken steps to reduce that income by diverting it elsewhere.
For each category of variation that succeeds, an allowance is added to, or deducted from the gross weekly income before the calculation is completed. If a decision is made that you disagree with, you must follow the Mandatory Reconsideration process, and if necessary follow the required steps to put the matter into appeal.
To discuss your case and how to challenge any decision, take advantage of the various support services we offer
