skip to Main Content

My ex has been made redundant, what happens to my maintenance?

The current economic climate is worrying for many. If you have maintenance payments in place, you may be concerned about what impact there will be on these should your ex be made redundant.

Any financial settlement agreed with your ex-spouse may allow for spousal maintenance, sometimes referred to as periodical payments. This maintenance will often be for a set amount per month and any settlement should clearly set out when the maintenance will be payable until, e.g. you remarry or your children finish their secondary education, or it may be appropriate for the maintenance to be payable for the remainder of the lives of the parties.

It is appropriate for these types of maintenance arrangements to be set out clearly in a court order, so that all concerned are aware of their financial obligations and can plan prudently in relation to the money they expect to receive from their ex-spouse.

If there has been a material change to your ex-spouse’s financial circumstances that may warrant a variation of the payment terms, the parties should openly communicate with one another as to those circumstances and a “cards on the table” approach will best eliminate the risk of unnecessary court action.

Additionally, if it helps the parties, they should also consider whether alternative forms of dispute resolution (e.g. mediation, collaborative law) may benefit in resolving any dispute over payments that may need to be varied in the short or longer term.

Whilst the payments are ongoing, it is possible for either party to make an application to court to vary the order, in order to increase or decrease the sums payable. Any variation will not automatically kick in as a consequence of a change in an individual’s financial arrangements, such as your ex-spouse being made redundant or being furloughed.

Will child maintenance automatically change if my ex is made redundant?

There are no automatic variations on assessments to child maintenance as a consequence of an ex-partner being furloughed as a consequence of Covid 19 or made redundant. Changes of circumstances that could affect the maintenance calculation include things like earning less money as a result of redundancy or furloughing or re calibrating the average number of overnight stays a child spends with a non-resident parent 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. Paying parents are also entitled to the annual review of payments, irrespective of any change in circumstances.

Therefore, under the Regulations, being furloughed will not automatically entitle a paying parent to recalculate their child maintenance payments, but redundancy will.

The philosophy of 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 scheme.

For families affected by a change in the financial circumstances of a paying parent, consideration of a “family-based arrangement” may be suitable.

What is a family-based arrangement?

The furloughing of huge swathes of the nation’s workforce earlier this year and an increasing unemployment number (expected to rise further when the government’s furloughing assistance ends in October 2020), presents 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. The family-based arrangements are capable of returning to pre-furlough or pre-redundancy payment levels upon the paying parent returning to their previous employment and income levels. Entering into a family-based arrangement does not prevent a party making an application to the Child Maintenance Service if they are no longer happy with the level of payment received. Upon receipt of an application, the CMS will calculate the correct levels of payment based upon the non-resident parent’s current level of income.

If you would like to talk to one of our experts about any concerns you may have about your ex being made redundant and what impact that may have on any maintenance, please contact us today.

Philip is a Resolution member and formed part of the campaign to support no fault divorce proceedings. Philip is also contributor to the legal and national media on family law issues.

More Posts

Talk to us in confidence

Our experts are here to guide and support you.

Related Services:

Find out where you stand

If you are ready to take the next step, click the button below to provide us with detailed information about your individual circumstances. We can then offer you confidential advice tailored to your situation right from the start, with no obligation.

Back To Top