Child maintenance is the liability paid by one of the parents towards a child's expenses in case of a separation. The parent who is not living with the child or not involved in the day-to-day upkeep of the child has to pay child maintenance.
Child Maintenance in Detail
Child maintenance rate depends on the income of paying parents. The government has set five different rates for child maintenance.
Nil rate: If the weekly income of the paying parents is under £7 they are not liable for child maintenance.
Flat rate: For paying parents with weekly income between £7 and £100, there is a flat amount payable of £7 regardless of the number of children.
Reduced rate: Paying parents with weekly income of between £100 and £200 come under the reduced rate category. They need to pay a flat amount of £7 along with a percentage of their income. For a single child, this rate is 17% of their weekly income, for two children the rate is 25%, and for three or more children, the rate is 31%.
For example, a paying parent has two children and has a weekly income of £150. So the child maintenance liability under the reduced rate is £7 plus £37.5 per week (25% of £150) resulting in a total of £44.5 per week.
Basic rate: This rate is applicable for paying parents with income in the range of £200 and £800. For a single child, the rate is 12% of the paying parent's weekly income, for two children, the rate is 16%, and for three or more children the rate is 19%.
For example, a paying parent with three children comes under the basic rate because his income is £600. So, the child maintenance liability is £114 per week.
Basic Plus Rate: For parents with income above £800 up to £3,000 the basic plus rate is applicable. As per the basic plus rate, for the first £800 of income the basic rate given above is applied. For income above £800, the rate for a single child is 9%, for two children it is 12%, and for three or more children it is 15%.
Let's say a parent has income of £2,500 and has a single child. So for the first £800 the basic rate of 12% will be applied, and for the remaining £1,700 a basic plus rate of 9% will be applied. So the parent's total liability towards child maintenance will be £249.
Some other important points about child maintenance:
- For child maintenance, income refers to income before deducting income tax and national insurance, but after deductions for personal or occupational pension schemes.
- It is a criminal offence either to not provide income information or to provide incorrect income information to the government when they ask for it for child maintenance purposes.
- In case the child stays with the paying parent overnight for at least once in a week, then the weekly payable amount is reduced between 1/7th and 1/2 depending on the number of nights.
- If parents are using government's 'collect and pay' service the paying parent has to pay an additional charge of 20%, while 4% will be deducted from the receiving parent's child maintenance income. These charges are applicable even if parents miss a payment. So, it is best to go for a 'direct pay' method where parents exchange the money directly without any government involvement.
Popular Tax Terms Guides and Calculators
People who read 'Child Maintenance and Household Budgets | iCalculator' also viewed the following tax terms, payroll tools and calculators:
Salary Calculators & Tools
- 2017/18 PAYE Tax Calculator (UK)
- 2017 Tax Calculator (US)
- 2017 Tax Calculator (CN)
- 2017 Tax Calculator (CA)
- 2017 Tax Calculator (AU)
- 2017 Tax Calculator (IN)
- 2017 Tax Calculator (JM)
- Employer NIC Calculator
- Mortgage Calculator
- Personal Loan Calculator
- Global Tax Calculators
- Dividends Calculator 2017/18
- Corporation Tax Calculator 2017/18
- VAT Calculator
- Small Business Rate Relief Calculator
- Payslip Calculator and Analysis
- Employer NIC's Calculator
- Employer NIC Salary Examples
- Labor Cost Per Employee Calculator
- Revenue Per Employee Calculator
- Simplified TimeSheet Calculator
- Timesheet Calculator
- True Cost Of An Employee Calculator
- Bradford Factor Calculator
- Cost Per Hire Calculator
- Turnover Rate Calculator
- Performance Management Calculator
- Time To Fill Open Vacancies Calculator
- Turnover Cost Calculator
- First Year Employment Turnover Rate Calculator