Furlough and Child Maintenance Payments: What You Need To Know

The world may have changed a little since you set up payments in relation to child maintenance, especially if you have been furloughed. In this post I look at common questions that have been asked in relation to furlough and child maintenance payments.

Furloughing is designed to support firms that have been adversely financially affected by coronavirus, and to prevent mass unemployment from sweeping across the nation’s economy.

Being furloughed means an employee is kept on their employer’s payroll, even though they aren’t actually working. The system is designed to temporarily help pay the wages of employees who can’t do their jobs and to help companies retain them during the epidemic crisis.

Employers can claim 80% of their employees’ wages from the government, up to a maximum of £2,500 per person, per month before tax. Your employer may elect to top up this pay if it chooses to, but is not obliged to do so. Your employer must write to you if you are an affected employee, letting you know that you have been furloughed.

The furloughing scheme has been designed to operate for at least three months from 1 March 2020. Inevitably, this will mean a large proportion of the nation’s workforce will now be on reduced income for an extended period of time, and for most this is likely to be the 80% capped government contribution, up to a maximum of £2,500 gross per calendar month.

If you use the Child Maintenance Service to calculate child maintenance using the 2012 Scheme and your circumstances have change as a consequence of furloughing, the maintenance calculation might need to be adjusted.

Changes of circumstances that could affect the maintenance calculation include things like earning less money as a result of furloughing or re-calibrating the average number of overnight stays as a consequence of social isolation.

Under Part 4 Chapter 1 section 34(2) of the 2012 Regulations, the Child Maintenance Service will not action a ‘change of circumstances review’ to ‘supersede’ the existing assessment, unless the change in income breaches a 25% “tolerance”. If income goes down by 25% or more, a paying parent is obliged to inform the Child Maintenance Service within 14 days. If you’re self-employed, you don’t have to tell them about a change in income. In any event, paying parents are entitle to the annual review of payments, irrespective of any change in circumstances.

Under the Regulations, being furloughed will not automatically entitle a paying parent to recalculate their child maintenance payments. The philosophy of the 2012 maintenance scheme has its genesis in policymakers attempting to minimise the administrative burden in operating the scheme, which under its two previous guises had become increasingly unwieldy. The stark reality is that the Child Maintenance Service would be entirely overwhelmed by any attempt to manage recalculations for every paying parent furloughed under the government’s March 2020 scheme.

The furloughing of huge swathes of the nation’s workforce and inevitably, a large number of paying parents, may present a unique opportunity for the Child Maintenance Service to promote the use of “family-based arrangements”. These arrangements allow for separated parents to coordinate payments between themselves, outside of the formal terms of the 2012 maintenance scheme. These private schemes offer a greater degree of flexibility to more accurately reflect the real-world change in circumstances that people are managing in these uncertain times, capable of returning to elevated payment levels upon the paying parent returning to their previous employment and income levels.

Gingerbread – the nation’s largest charity working with single parents – highlights that these family-based arrangements can be for regular payments of money, or alternative one-off sums, e.g. school trips.  The flexibility of the private arrangements allows for payments to be made immediately on agreeable terms for both parents and help reduce conflict between separated parents. However, their non-binding status is not suitable for every family, particularly for those affected by domestic abuse, including financial abuse and coercive and controlling behaviours.

If you have any further questions about furlough and child maintenance payments, or indeed any other aspect of family law, then please do not hesitate to contact us.