Q&As

Where a paying party receives a redundancy payment, including in lieu of notice and holiday entitlement, together with ex gratia and disability payments, will the Child Maintenance Service take those payments into account on a maintenance assessment? How would the maintenance be calculated in such circumstances? Could the court make an order for child maintenance by treating the ex gratia and disability payments as capital sums?

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Produced in partnership with Chris Bryden of 4 King’s Bench Walk
Published on LexisPSL on 18/02/2019

The following Family Q&A Produced in partnership with Chris Bryden of 4 King’s Bench Walk provides comprehensive and up to date legal information covering:

  • Where a paying party receives a redundancy payment, including in lieu of notice and holiday entitlement, together with ex gratia and disability payments, will the Child Maintenance Service take those payments into account on a maintenance assessment? How would the maintenance be calculated in such circumstances? Could the court make an order for child maintenance by treating the ex gratia and disability payments as capital sums?

The Child Maintenance Service (CMS) operates a statutory formula to calculate the level of child maintenance, based upon a percentage of the gross income of the paying parent. A number of factors, including whether the paying parent is in receipt of benefits and the number of nights that the child stays with them, are factored into the formula. The Child Support Act 1991 (CSA 1991) (as amended), and associated regulations made thereunder, is the operative statutory framework.

As the CMS uses the gross income reported to HMRC to calculate child maintenance, whether a redundancy payment counts as income will depend upon its tax treatment. Redundancy payments are not treated as taxable income where the payment is less than £30,000. However, pay in lieu of notice and holiday entitlement are treated as taxable income. Much therefore depends upon the tax treatment of the payments and the quantum thereof in terms of the calculation of CMS maintenance. If the redundancy paym

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