Finances affected by coronavirus after breakup: Changing Maintenance
Everybody is all too aware of the coronavirus outbreak and the lockdown that is slowly defeating it – the news speaks of literally nothing else. What is less reported in the press is the very significant financial impact this is having on people.
Many thousands of people have been put on furlough, the new Government scheme, which cuts pay by at least 20%. Without that scheme, the same people would almost certainly have been made redundant, but it is still a significant drop in income, even assuming their employer has not gone bust.
People who are self-employed can suffer even worse: whilst there is some Government support, it will not help every business and some people have lost their livelihoods entirely.
That obviously is bad enough, but what if you have recently agreed to a divorce or dissolution settlement, or had a Judge or the Child Maintenance Service (CMS) decide finances, requiring you to pay maintenance you cannot now afford? What if you agreed to accept a maintenance amount, relying on your salary which has now reduced or disappeared?
Whilst the coronavirus outbreak is an unprecedented event in modern times, changes in finances are common, so there are systems that allow maintenance to be changed. How you do that depends upon the type of maintenance and how it was decided.
(Monthly payments to support children)
Maintenance for children normally comes under 1 of 3 headings:
1. A voluntary agreement.
2. An assessment by the Child Maintenance Service (CMS – the replacement for the Child Support Agency).
3. Child maintenance in a Court Order.
If child maintenance was under a voluntary agreement, there is no formal process: just speak to the other parent, if it is safe and appropriate to do so, and try to agree another amount. It will help to check what the CMS assess as the correct amount, which you can do online, without involving the agency at all – just go to the website https://www.gov.uk/calculate-your-child-maintenance.
If you cannot agree, then you will need to involve the CMS or the Court.
- Child Maintenance Service (CMS)
If you cannot agree, or child maintenance was already set by the CMS, then they can be asked to decide the amount of child maintenance based on the current situation. Be aware that it is only based upon the income of the paying parent – it will make no difference if the income of the receiving parent has gone up or down. There is no “Court hearing”: CMS just decide based on the information and papers given to them.
If you have not applied to the CMS before, then the telephone number is 0800 083 4375. The initial service is called “Child Maintenance Options” and they will try to encourage you to agree child maintenance, which is always preferable. If that is not possible, then they will arrange an application to the CMS. Also have a look at www.gov.uk/making-child-maintenance-arrangement.
Applying to the CMS costs £20 for the assessment but then it is best to agree to pay directly: if the CMS collect the money, they will charge BOTH parents for it.
CMS generally only has jurisdiction if:
- Both parents and the child live in the UK.
- The child in question is either under 18, or under 20 but still in education.
If CMS cannot help, the Court may still be able to order child maintenance, even if the parents were not married or in a civil partnership. However, you really should take some legal advice before you embark on any sort of Court action.
- Court Order
If your child maintenance is in a Court Order, then the situation is very different. Changes to the finances of either the paying parent or the receiving parent could allow the Court to change the amount or frequency of payment. It is not automatic – it is up to the Judge, based on what is fair and affordable.
However, if it was an agreed Court Order made after 3 March 2003 and the Order is more than 12 months old, then in fact you may well be able to apply to the CMS: their assessment, which will be based on the current situation, will just override the Court Order. That may well be faster than going through the Courts, but there could be other consequences, so take some legal advice before you do that.
If it is the Court you need to deal with, then again, always take some legal advice but you do not have to have solicitors acting for you in order to ask the Court to change any kind of maintenance.
(Monthly payments to/from your former husband/wife or civil partner)
Spousal maintenance is different to child maintenance and it will either be a voluntary arrangement or Court Order: there is no equivalent to Child Maintenance Service.
- Voluntary Agreement
If it was a voluntary arrangement, then you should certainly speak to a solicitor: it is almost always wise to have everything recorded in a Court Order, and it can usually be done easily by agreement. However, as a first step, there is nothing to stop you asking your ex to agree a change in the maintenance, where it is safe and appropriate to do so. If they will not agree, you will need to apply to the Court.
- Court Order
It is very wise to take some legal advice as soon as possible where spousal maintenance is concerned. If there is a Court Order and you agree a variation of the maintenance with your ex, you might not need to apply to the Court, but legal advice is crucial as it very much depends upon your circumstances. If it is an agreed change, any Court application should be just a formality.
Whether it is a change in maintenance or a new application, Courts take account of all the financial circumstances, for both the payer and the receiving party. It is not automatic that maintenance will be ordered or changed: it is up to the Judge, based on what is fair and affordable. Courts do have some extra powers, so can replace maintenance with a lump sum or a pension Order in appropriate circumstances, though that is rare.
If you do need to apply to the Court, then you do not have to have a solicitor, but it is very wise to take some legal advice first. The Courts are still dealing with these matters, despite the lockdown, but there will almost certainly be delays and it is worth speaking to a solicitor, just to get the latest advice on which Court to go for and how to do it.
Some solicitors can apply to Court using an online system, which is almost certainly faster: you can ask a solicitor to make the application online, then switch to doing it yourself afterwards. Again, the point is to take some legal advice first, before you do anything else, as there may be options and risks you are not aware of.
That is a very quick and simplified summary of what is quite a complicated system, so do ideally take some legal advice before you do anything at all. At MacDonald Oates we are still working as normal and can provide telephone and video appointments, as well as appointments out of hours, if you need to make sure the children are in bed before speaking to us: children should be protected from these issues at all costs.
If you concluded a financial agreement before the lockdown and lockdown now makes the arrangements for the capital assets (houses, savings, pensions, etc.) seem unfair, that is a different topic. I am planning a separate article on that but, in that case, definitely take some legal advice as soon as you can, as it is much more complicated and difficult.
Tim Melville-Walker is a solicitor, collaborative lawyer, arbitrator and Deputy District Judge and Head of the Family Department at MacDonald Oates LLP, 01730 816711,
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published. 20.04.2020