Child maintenance and informal overtime

MrMCalavera1

If I earn £30,000 per year, I expect to pay child maintenance on that, that's totally fine. 

I have the option to do unscheduled overtime at work as and when it becomes available which, depending on projects and business needs, may be every month, may not be for months at a time. 

My question is, if I do 30 hours of overtime this year, it will inflate my income and thus inflate my child maintenance payments when the CMS carries out their annual recalculation but what happens if I don't have the opportunity to do 30 hours of overtime next year? My child maintenance payments will end up being calculated on an income I'm not actually earning. I don't want to get to a point where every hour overtime I do each year has to be met or exceeded next year for me to keep my head above water or I'll end up paying maintenance on money I'm not actually earning. Can you tell me how the CMS handles this? I'm happy to pay maintenance based on what I've earned but I don't want to have to pay it based on incorrect figures. 

saajan_12

Do you have annual reviews of the amount? Surely if you have low overtime one year then the following year's CB estimate will be lower, even if you then have higher overtime, so after the first year, it all comes out in the wash. For example: 

Year 1 - high overtime
Year 2 - low overtime; high CB (based on year 1)
Year 3 - low overtime; low CB (based on year 2)
Year 4 - high overtime; low CB (based on year 3)
Year 5 - low overtime; high CB (based on year 4)
Year 6 - high overtime; low CB (based on year 5)
Year 7 - high overtime; high CB (based on year 6)
Year 8.......

So you're overpaying in years 2 and 5 but underpaying in years 4 and 6. So  if you can save the underpayment in the low CB years, that should cushion the high CB years. 

MrMCalavera1

If I work 50 hours overtime in year one, they're going to assume I will work 50 hours overtime in year two and bill me accordingly but that means if I work no overtime in year two I'm significantly worse off because CMS will charge me as if I did do overtime. It's almost not worth doing overtime because unless I work 50 hours in year two onwards I'll be financially worse off

sheramber

MrMCalavera1 said:

If I work 50 hours overtime in year one, they're going to assume I will work 50 hours overtime in year two and bill me accordingly but that means if I work no overtime in year two I'm significantly worse off because CMS will charge me as if I did do overtime. It's almost not worth doing overtime because unless I work 50 hours in year two onwards I'll be financially worse off

There are extra things that need to be reported about the paying parent. Either parent can tell the Child Maintenance Service if the paying parent:

• misses a payment when using Direct Pay
• makes any voluntary payments on top of existing payments
• has an income change of 25% or more, or no longer has an income
• is spending more or less money in order to see the child, for example on transport costs

https://www.gov.uk/child-maintenance-service/change-of-circumstances

94JDH

sheramber said:

MrMCalavera1 said:

If I work 50 hours overtime in year one, they're going to assume I will work 50 hours overtime in year two and bill me accordingly but that means if I work no overtime in year two I'm significantly worse off because CMS will charge me as if I did do overtime. It's almost not worth doing overtime because unless I work 50 hours in year two onwards I'll be financially worse off

There are extra things that need to be reported about the paying parent. Either parent can tell the Child Maintenance Service if the paying parent:

• misses a payment when using Direct Pay
• makes any voluntary payments on top of existing payments
• has an income change of 25% or more, or no longer has an income
• is spending more or less money in order to see the child, for example on transport costs

https://www.gov.uk/child-maintenance-service/change-of-circumstances

its reviewed annually on your P60 so there is no escaping it but you will only pay for the hours worked even though its a year in arrears.

SGMR17

I'm in a very similar situation, I did a fair bit of un-planned/non guaranteed overtime last tax year, and CMS think that because I earned X last year that's exactly what I will earn this year, which of course isn't true. the 25% rule is absolutely shambolic, I can be earning 24.9% less or on the flip side earn 24.9% more( I'm assuming) and they wont look at it. It really needs to change because 25% is a massive amount, looking through some of the other posts and forum threads, a lot of people feel the same, they don't want to earn more money as if you work Overtime that's indirectly benefitting your ex partner, and I'm not trying to get out of paying whatsoever, I want it to be fair, it should be based on your basic salary, not extra un planned overtime.