Child maintenance from savings

[SleeplessInTheSuburbs150]

Can someone explain how the CMS treats substantial savings for the purpose of child maintenance? NRP has no regular employment, but lives a good life inconsistent with having no income (e.g. holidays, expensive meals out, etc.). He pays no child maintenance.

I have long questioned how it is that he maintains this lifestyle with no job but now I have conclusive proof that he has come into a substantial sum of money. We're talking hundreds of thousands. I read on Gingerbread that the CMS does not take savings into account when assessing child maintenance, but that seems fundamentally wrong. There must be some way to force wealthy NRPs to support their children. Do you have to go to Court to get savings or an inheritance taken into account for child maintenance?

[KP86]

Does he have the money invested and then live off the interest? That might count as income?

[MonsterDeCookie]

Unless you have yet to divorce then no it won't be taken into consideration. If he has invested it and takes an income from it in the form of interest or dividends then yes the interest or dividends would count. Capital is not considered in child maintenance.

[willconcern]

Have a look at this - www.gov.uk/government/uploads/system/uploads/attachment_data/file/325219/how-we-work-out-child-maintenance.pdf

CMS will calculate maintenance from the paying parent's income.

See page 38 - looks like you can apply to the CMS for an "additional income variation" if the paying parent has unearned income from savings. But doesn't look like it's from the savings themselves, just the income from them.

I would phone the CMS if I were you.

[SleeplessInTheSuburbs150]

I have called the CMS and can never get a clear answer. It seems absolutely wrong to me that there is a "system" which is supposed to compel NRPs to support their children fairly from their means, but which allows for someone to have inherited hundreds of thousands but none of that can be included as a contribution. What if I was the NRP and had no job but won the Euromillions jackpot? It's just ridiculous!

[Fourormore]

I'm sure one of the lawyers on here can clarify but my understanding in this scenario would be that you'd be better off making a a Schedule 1 claim under the Children Act.

[fastdaytears]

CMA is looking for income, not inheriting capital.

If you weren't married you'd need a children's act claim but it's not cheap or easy sadly.

[prh47bridge]

As Willconcern says, if the NRP is receiving more than £2,500 per year in interest on their capital you can apply for an "additional income variation". If they are not getting any income from their money it is not taken into account by the CMS.

So if the NRP wins the lottery and puts all the money into a non-interest bearing account the CMS won't be interested. If, however, they put their winnings into an interest bearing account the interest could potentially be taken into account by the CMS.

[user1497582089]

Both parents have a duty to maximise their income. So depositing a large sum in a zero interest account would be treated suspiciously. However, as current interest rates are so low it would have to be a substantial sum to exceed the 2,500 limit as interest is subject to tax

[7461Mary18]

My ex has £500k at least (I had to give it to him plus his house) in savings and pays nothing. 1% on that is only £5k before tax. I get 0.01% on my nat west account. Interst on savings almost does not exist at the moment so w are in a very weird world where someone can be very very rich or make sure they only make capital gains but no interest, dividends, rent etc and not have to pay.

[Traveller123]

It is the income that arises from Savings and Assets that CMS will use when calculating CM. It is not the capital itself. At todays low interest rates it would take a large capital sum to exceed the unearned limit of £2500. If you went through the Courts and have a Consent Order it may well read that both Parties have no further claims against each other for Capital, Assets or Income?