How pension contributions affect child maintenance

What is child maintenance?

Child maintenance refers to consistent and dependable financial assistance that contributes to a child's daily living expenses.

In general, the parent who does not have primary day-to-day care of the child is responsible for paying child maintenance to the parent who does. In child support legislation, the recipient of child maintenance is referred to as the ‘parent with care’—often called the ‘receiving parent’—while the one who pays is known as the ‘non-resident parent’ or the ‘paying parent.’

How is child maintenance calculated?

Typically, the Child Maintenance Service adhere to six steps to determine the amount of child maintenance that a paying parent is required to contribute.

Step 1 – Income

They determine a paying parent's annual gross income and verify if they are receiving any benefits.

Step 2 – Things that affect income

They look for specific factors that might alter the gross income figure, including pension payments or additional children supported by the paying parent.

Additionally, they convert the annual gross income into a weekly amount.

Step 3 – Child maintenance rates

They implement one of four rates, determined by the level of gross weekly income.

Step 4 – Children to consider

They consider the number of children for whom the paying parent is responsible for child maintenance, along with any family-based agreements in place.

Step 5 – Weekly amount of child maintenance

Based on the information gathered from the first four steps, they determine the weekly child maintenance amount.

Step 6 – Shared care

Finally, if relevant, they will adjust this weekly child maintenance amount based on the average number of 'shared care' nights per week. 'Shared care' refers to the nights a child stays overnight with the parent who is responsible for paying child maintenance, or the ‘non-resident’ parent.

Completing all six steps results in a total weekly amount for child maintenance which is a decision that remains in effect until the Annual Review date.

Although child maintenance can be paid on a monthly, fortnightly, or weekly basis, child support law requires that it be calculated as a weekly amount.

Prior to the Annual Review, the child maintenance amount may be adjusted if either the paying parent or the receiving parent notifies the Child Maintenance Service about any change in circumstances. However for any change in income to justify a review of the level of child maintenance it must be by 25% or more than the figure used in the assessment.

How pension contributions affect child maintenance

At Step 1, the gross weekly income is decreased if a paying parent contributes to a private pension scheme. For instance, if a paying parent has a gross income of £300 per week and makes private pension contributions of £20 weekly, the adjusted gross income will be £280 per week.

Contributions to an occupational or employer pension scheme that are deducted from pay are typically made by the employer. If this applies, then this will have already been considered in Step 1, and the paying parent does not need to disclose this.

However, a paying parent should inform the Child Maintenance Service if they make their contributions through another method, such as directly to a private pension provider.

When a paying parent contributes to a private pension scheme, the Child Maintenance Service generally lowers the income amount they consider by the total they contribute, which also includes any tax relief benefits.

My ex-partner is making unreasonable pension contributions to reduce child maintenance payments

Of course, a paying parent will usually have control over the level of pension contributions they make, and this opens the door for the paying parent to increase their pension contributions and thereby reduce the amount of child maintenance they must pay.

Below sets out what a receiving parent can do if they suspect that to be the case and what factors the Child Maintenance Service will consider.

If the receiving parent suspects that the paying parent is paying an unreasonable amount of pension contributions to reduce the amount of child maintenance they must pay then the receiving parent may apply to the Child Maintenance Service for a Variation.

The Child Maintenance Service will consider each case on its own individual facts but will take the following into account:

1. Are the pension contributions being paid into occupation or private pension schemes?
2. Are any employer pension contributions being paid?
3. Have occupational/private pension amounts already been taken into account in the gross income figure?
4. Are the pension contributions over 12% of the paying parent’s income.

12% is generally considered a reasonable deduction although a higher % can be justified based on other factors such as age now and/or the age the paying parent was when they started contributing towards a pension.

If the Child Maintenance Service conclude that the paying parent is making an unreasonable level of pension contributions then they may reduce the amount of pension deducted for the purposes of calculating the paying parent’s child maintenance liability and vary the child maintenance calculation accordingly.

How can Hegarty help?

If you are a receiving parent and have questions regarding the amount of child maintenance you believe you should be receiving, or, if you are the paying parent and have questions around the amount you believe you should be paying, our experts are more than happy to answer these for you.

If you are unhappy with the level of child maintenance you have been assessed to pay, then our experts can carry out an independent assessment and advise you on the steps you can take to challenge any Child Maintenance Service decision.