How Divorce Will Impact Your Income

Divorce is not pleasant and it is seldom simple, but it is even more painful and complicated if children are involved.

Of course there is the emotional pain that goes with it, but then there is the whole question of money, which is almost always the root of the real problems when a couple decide to split up.

For divorcing couples who don't have children, breaking up is relatively straightforward. You split the assets and continue with the rest of your lives. Divorce with children is much more difficult, and the younger they are, the trickier it is. Child maintenance is a complicated area and the partial replacement of the Child Support Agency with the Child Maintenance Service means that many people find it even more challenging.

Accountants etc. helps to explain how much it could cost you if you do have to face a painful divorce.

Maintenance costs

Child maintenance can be paid to the father or the mother, depending on who is left to look after the children. Whoever pays the money is known as the “non-resident parent” in legal terms. In most cases, naturally enough, that person is the ex-husband or father.

What you pay will depend on how much you earn. If you earn less than £5 a week, you will pay nothing. If you earn between £5 and £100, you pay £5 a week, no matter how many children are involved. If you earn up to £200 a week, you pay that £5 flat rate plus a percentage of your after-tax weekly income. That is 25% of your income for the first child, 35% for two children and 45% for three or more. And if you earn more than £200 a week, you will pay 15% of your after-tax weekly income for one child, 20% for two and 25% for three or more.

If the non-resident parent helps out with childcare, these figures will be reduced accordingly. If, for instance, the children regularly stay with their father two nights a week, he would only pay five-sevenths of his child maintenance obligations."

Couples can do their own sums using the child maintenance calculator, but this can be tricky if the non-resident parent doesn't declare all their earnings – a problem where people do cash-in-hand jobs, such as self-employed building work.

You pay child maintenance up to the age of 16, or 20 if the child is still in full-time education, but only up to A-levels and equivalent. You are not obliged to fund your children through university.

Private school fees can sometimes be an issue. If a child attends a private school and the father wants them to go to a local comprehensive instead, it is often the case that finding a solution will be left to the courts.

Family home

A key priority is making sure the children continue to have a roof over their heads. Husbands often expect to be able to sell the house and walk away with half of its value but that simply doesn't happen.

If there aren't many other assets to divide, the wife (assuming she is the primary carer) and children will usually continue living at the house, with the courts ruling that the house can only be sold, with the ex-husband getting his share, after the children's education has been completed. It means that an ex-husband with a very young family could find himself having to wait 15 years or more, and being forced to pay his share of the mortgage in the meantime.

If either partner starts a new relationship, things become more complicated. If the mother moves in with a partner or gets married, it will not affect the father's maintenance obligations to his children, and he will have to keep paying out exactly as before. But any obligation to pay maintenance to the ex-wife will cease if she remarries, or in some cases, cohabits.

If a father moves in with a new partner, and the new partner has children from a previous relationship who live with them, he may have to pay less child maintenance to his own children.

Negotiations

The government wants couples to sort child maintenance between themselves, by negotiating a family-based arrangement, or failing that, using the Child Maintenance Service or Child Service Agency (CSA).

If one parent refuses to pay, the other one may have to ask the CSA to enforce its maintenance assessment.

The CSA can only take into account net income of up to £2,000 a week when making its assessment, and if the paying parent earns more, their ex-partner can apply to the court for additional top-up maintenance.

Things become even more complicated if one partner lives or works abroad. In this instance, the courts have power to enforce an application for maintenance. This is covered by the EU Maintenance Regulation of 2008 and the UK also has reciprocal agreements with many other countries.

Where a cohabiting couple separate, the mother has few legal rights to maintenance for herself, but she may be able to claim maintenance for her children through the CSA.

Children are expensive. The lifetime cost of bringing up a child is £222,000, according to research from insurer LV=. To cover that, both partners will need to pay their share.

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