When a figure for child maintenance can’t be agreed privately between the parents, the Child Maintenance Service (CMS) becomes involved and makes an assessment – based on the paying parent’s income – of how much maintenance should be paid for each child per month.
We have seen how parents paying maintenance can apply to reduce it. What happens if the parent in receipt of child maintenance thinks the figure arrived at by the CMS is too low?
Various options are available:
- If, on receipt of the assessment the receiving parent disagrees with the figure arrived at, they can request a mandatory reassessment. This must be done within a month of the decision
- They can request a variation – the CMS bases its assessment primarily on available HMRC data – tax returns or PAYE records, for example. If the paying parent receives income not caught by this data, it may be possible to get the assessed amount varied
- If the paying parent’s income has increased since the assessment the receiving parent can report a change of circumstances and request a review
Finally, in cases where the paying parent’s income is more than £156,000 a year the receiving parent can apply to court for a ‘top up’ of the CMS-awarded figure. (The CMS only deals with cases up to that amount.) The approach of the courts to top up requests had been seen as relatively unclear and, in the opinion of some, inconsistent. Greater clarity was provided however in the 2023 case of James v Seymour. Below, we look at the case and how these applications work in practice.
James v Seymour
By their very nature the calculations involved in top up applications are complex. While not eliminating judicial discretion, Mostyn J’s judgment in James does appear to limit that flexibility to some degree in cases where the paying parent’s income is more than £156,000 per annum.
The father in the case earned around £424,000 a year – well above the CMS cap of £156,000. At the time of this case he and his ex-wife had been divorced for several years, and the father was paying £10,000 per annum child maintenance for the two children of the marriage.
The mother had initially asked a lower court to increase this to more than £40,000 a year. Instead that court had ordered that it be increased more modestly – to around £24,000. She then appealed. Although her appeal ultimately failed, the hearing produced some much needed clarity on how case like this should be tackled.
The Adjusted Formula Methodology
The key feature of James is the creation by Mostyn J of what he termed the Adjusted Formula Methodology (AFM). Rather than simply applying the CMS formula for calculating maintenance in higher income cases, the AFM should instead be used in cases where the paying parent’s income falls between £156,000 and £650,000. (In cases where income exceeds £650,000 the view is that any attempt at a rigid calculation becomes impractical.)
The formula is a detailed one involving several steps and introducing variable percentage tariffs depending on the number of children. In his judgment Mostyn J produced working tables showing the amount of child maintenance that may be payable according to income, number of children and level of shared care. These tables can be accessed at the end of the James judgment here.
Comment
Mostyn J’s Adjusted Formula Methodology has been broadly welcomed because of the clarity it provides. However it’s important to note that, in spite of the formula, the level of child maintenance is never set in stone. Courts always retain a degree of discretion and will usually expect detailed justification as to why the additional maintenance for children is needed.
During the case Mostyn J was told that there are now about 629,000 taxpayers earning more than £150,000, a 2-3-times increase in the ten years since the CMS ceiling of £156,000 was introduced. As the number of top up cases is likely to significantly increase in future, the hope is that the tables he provided will enable parents to more easily settle child maintenance disputes without going to court. And if a case does end up in court, the expectation is that judgments in this area will be more consistent than perhaps they were in the past.