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CMS Case and Redundancy
#1
Help Please

My ex started a new case with the CMS last April which is due for review in May next year. I've been paying the amount calculated by the CMS for the 2 children since then direct to her.

The final payment under the current plan is set for May next year. Whilst my salary is higher than that being used by the CMS its under the 25% increase so they've not been advised which I believe is correct.

I've now had notice of redundancy and my last working day will be 30/03/18 and I will have no income beyond that date nor do I expect to have. My final payments will take my annual earnings above the 25% threshold though obviously my circumstances will have changed as I will be out of work. My final payment will allow me to pay the agreed amount in early April, but beyond that how do I ensure that the CMS see my income as zero? If I supply my P60 when its available (probably not before the May payment is due) it will show that my income is higher than it was when they made the calculations last year and I'm concerned that they will expect me to pay on this basis not my true current income of zero.

Can someone please reassure me that I wont be expected to pay what I don't have and if they'd seek payments on the increase salary as arrears for last year even though it didn't breach the 25%.

Thank you
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#2
(12-08-2017, 08:43 AM)Reefman Wrote: Help Please

My ex started a new case with the CMS last April which is due for review in May next year. I've been paying the amount calculated by the CMS for the 2 children since then direct to her.

The final payment under the current plan is set for May next year. Whilst my salary is higher than that being used by the CMS its under the 25% increase so they've not been advised which I believe is correct.

I've now had notice of redundancy and my last working day will be 30/03/18 and I will have no income beyond that date nor do I expect to have. My final payments will take my annual earnings above the 25% threshold though obviously my circumstances will have changed as I will be out of work. My final payment will allow me to pay the agreed amount in early April, but beyond that how do I ensure that the CMS see my income as zero? If I supply my P60 when its available (probably not before the May payment is due) it will show that my income is higher than it was when they made the calculations last year and I'm concerned that they will expect me to pay on this basis not my true current income of zero.

Can someone please reassure me that I wont be expected to pay what I don't have and if they'd seek payments on the increase salary as arrears for last year even though it didn't breach the 25%.

Thank you

How this will work is
1, at the point you get your redundancy, if this takes your "Taxable Income" up by 25%, you report it straight away. 
However, they have to take into account there will be no income in April or May known, so it will be based on xx May 2016 (case start date) income up to a year later. If you find other work in the case year, again its reportable, but will only come into effect once your getting wages.

2, On the first day of your new case year, you then might need to report either
a, the fact that your on a qualifying benefit
b, a reduction over 25% in your expected income for that year. This means your claim will then be based on the expected income for that year, not the year before with redundancy pay.

Note that its earnings in case year, P60 is only used at the start of a claim, if limited info is avaliable from HMRC, to give an idea on current income.
Posts made by me are my opinion and any factual information should be checked out. If you do not have a Solicitor, often your local CAB can get you some initial advice.
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#3
Thank you for your detailed reply, can I clarify a few things please.

My final pay from my employer will be made on 30 March and will take me well over the 25% increase in the amount used for the 2016 calculation by the CMS due to pension compensation payments and unused leave that will be paid.

My case started on 2 May 2017 and my final payment is scheduled for 8 May 2018.

If I've understood your reply correctly I will still have to make payments in April and May even though I've no income.

This extra wage in March could potentially equate to a weekly increase of around £250 (I don't know exact figures yet) over the case year, or a maintenance liability of £40 though I've obviously in reality only had this for one month. I'm already committed to making a pension top up payment from my salary in March as I will probably retire in the next 12 months.

I appreciate that as my payments are 1 month in arrears that I expect to pay the agreed monthly payment on 8 April.

What I'm still not sure about is if they would look to recalculate my payments for April and May and if so would they just use the additional £40 /week and increase the next two monthly payments by £160 or if they'd recalculate the payments for the year ie 40x52 and either add £2080 to my bill and increase both April and Mays payments by £1040. Or just to continue under the present arrangement though if that the case how could the May payment still be due as I wont have any income in April (or May) so how is it fair to say that I owe it based on the 2016 calculation when I have no income.

Sorry for so many questions but need to be able to see where I'll be financially as I'm due to retire next year.

Thanks again
Reply
#4
(12-09-2017, 02:50 PM)Reefman Wrote: Thank you for your detailed reply, can I clarify a few things please.

My final pay from my employer will be made on 30 March and will take me well over the 25% increase in the amount used for the 2016 calculation by the CMS due to pension compensation payments and unused leave that will be paid.

My case started on 2 May 2017 and my final payment is scheduled for 8 May 2018.

If I've understood your reply correctly I will still have to make payments in April and May even though I've no income.

This extra wage in March could potentially equate to a weekly increase of around £250 (I don't know exact figures yet) over the case year,  or a maintenance liability of £40 though I've obviously in reality only had this for one month.  I'm already committed to making a pension top up payment from my salary in March as I will probably retire in the next 12 months.

I appreciate that as my payments are 1 month in arrears that I expect to pay the agreed monthly payment on 8 April.

What I'm still not sure about is if they would look to recalculate my payments for April and May and if so would they just use the additional £40 /week and increase the next two monthly payments by £160 or if they'd recalculate the payments for the year ie 40x52 and either add £2080 to my bill and increase both April and Mays payments by £1040.  Or just to continue under the present arrangement though if that the case how could the May payment still be due as I wont have any income in April (or May) so how is it fair to say that I owe it based on the 2016 calculation when I have no income.

Sorry for so many questions but need to be able to see where I'll be financially as I'm due to retire next year.

Thanks again
From 30th March until the end of your case year, the considered weekly income will change, to be your expected earnings in that case year, divided by 52.
(They can only make you to pay the increase, when you have the funds to cover this). Therefore, the increased amount will only be for 5-7 weeks. 
Use https://www.gov.uk/calculate-your-child-maintenance putting in the case year income/52 as the weekly amount, ensuring your staying conact is concidered if your having any.

On day 1 of your next case year, you will be reporting a decrease of 25% I think, and the starting point might be a nil income if you have not found new work.
Posts made by me are my opinion and any factual information should be checked out. If you do not have a Solicitor, often your local CAB can get you some initial advice.
Reply
#5
(12-09-2017, 08:03 PM)MarkR Wrote:
(12-09-2017, 02:50 PM)Reefman Wrote: Thank you for your detailed reply, can I clarify a few things please.

My final pay from my employer will be made on 30 March and will take me well over the 25% increase in the amount used for the 2016 calculation by the CMS due to pension compensation payments and unused leave that will be paid.

My case started on 2 May 2017 and my final payment is scheduled for 8 May 2018.

If I've understood your reply correctly I will still have to make payments in April and May even though I've no income.

This extra wage in March could potentially equate to a weekly increase of around £250 (I don't know exact figures yet) over the case year,  or a maintenance liability of £40 though I've obviously in reality only had this for one month.  I'm already committed to making a pension top up payment from my salary in March as I will probably retire in the next 12 months.

I appreciate that as my payments are 1 month in arrears that I expect to pay the agreed monthly payment on 8 April.

What I'm still not sure about is if they would look to recalculate my payments for April and May and if so would they just use the additional £40 /week and increase the next two monthly payments by £160 or if they'd recalculate the payments for the year ie 40x52 and either add £2080 to my bill and increase both April and Mays payments by £1040.  Or just to continue under the present arrangement though if that the case how could the May payment still be due as I wont have any income in April (or May) so how is it fair to say that I owe it based on the 2016 calculation when I have no income.

Sorry for so many questions but need to be able to see where I'll be financially as I'm due to retire next year.

Thanks again
From 30th March until the end of your case year, the considered weekly income will change, to be your expected earnings in that case year, divided by 52.
(They can only make you to pay the increase, when you have the funds to cover this). Therefore, the increased amount will only be for 5-7 weeks. 
Use https://www.gov.uk/calculate-your-child-maintenance putting in the case year income/52 as the weekly amount, ensuring your staying conact is concidered if your having any.

On day 1 of your next case year, you will be reporting a decrease of 25% I think, and the starting point might be a nil income if you have not found new work.

Thank you again that's clearer now

As I mentioned that I'm due to retire next year and want to maximise my pension.  If I was to increase my pension top up in my March salary to ensure that my gross weekly increase was under 25% then I wouldn't need to advise them of the increase.  However as this coincides with my salary reducing to Zero obviously a change of more than 25% which I'd notify would that not reduce my planned May payment to zero given I'll have no income in April.  

Thanks again
Reply
#6
(12-10-2017, 10:09 AM)Reefman Wrote:
(12-09-2017, 08:03 PM)MarkR Wrote:
(12-09-2017, 02:50 PM)Reefman Wrote: Thank you for your detailed reply, can I clarify a few things please.

My final pay from my employer will be made on 30 March and will take me well over the 25% increase in the amount used for the 2016 calculation by the CMS due to pension compensation payments and unused leave that will be paid.

My case started on 2 May 2017 and my final payment is scheduled for 8 May 2018.

If I've understood your reply correctly I will still have to make payments in April and May even though I've no income.

This extra wage in March could potentially equate to a weekly increase of around £250 (I don't know exact figures yet) over the case year,  or a maintenance liability of £40 though I've obviously in reality only had this for one month.  I'm already committed to making a pension top up payment from my salary in March as I will probably retire in the next 12 months.

I appreciate that as my payments are 1 month in arrears that I expect to pay the agreed monthly payment on 8 April.

What I'm still not sure about is if they would look to recalculate my payments for April and May and if so would they just use the additional £40 /week and increase the next two monthly payments by £160 or if they'd recalculate the payments for the year ie 40x52 and either add £2080 to my bill and increase both April and Mays payments by £1040.  Or just to continue under the present arrangement though if that the case how could the May payment still be due as I wont have any income in April (or May) so how is it fair to say that I owe it based on the 2016 calculation when I have no income.

Sorry for so many questions but need to be able to see where I'll be financially as I'm due to retire next year.

Thanks again
From 30th March until the end of your case year, the considered weekly income will change, to be your expected earnings in that case year, divided by 52.
(They can only make you to pay the increase, when you have the funds to cover this). Therefore, the increased amount will only be for 5-7 weeks. 
Use https://www.gov.uk/calculate-your-child-maintenance putting in the case year income/52 as the weekly amount, ensuring your staying conact is concidered if your having any.

On day 1 of your next case year, you will be reporting a decrease of 25% I think, and the starting point might be a nil income if you have not found new work.

Thank you again that's clearer now

As I mentioned that I'm due to retire next year and want to maximise my pension.  If I was to increase my pension top up in my March salary to ensure that my gross weekly increase was under 25% then I wouldn't need to advise them of the increase.  However as this coincides with my salary reducing to Zero obviously a change of more than 25% which I'd notify would that not reduce my planned May payment to zero given I'll have no income in April.  

Thanks again

If you increased your pension contribution, your ex could apply for a variation of considered income, what could result in it still being counted.

Going to zero income would not result in you not having to pay. To be clear on this, its income in your case year, NOT linked in any way to a set job or wage.
The fact is you will have to make the payment still, and only a decrease of 25% over the whole of the case year, or if you go onto a Means Tested Benefit, will reduce your liablity once your job ends.
Posts made by me are my opinion and any factual information should be checked out. If you do not have a Solicitor, often your local CAB can get you some initial advice.
Reply
#7
Thanks again. So just to clarify they can't make me pay the extra on the full amount of increase over the remaining weeks of the case year just an revised weekly payment over the remaining period.

Regarding pension payments I'm worried now as irrespective of the 25% figure I've always been planning to make a lump sum payment intomy pension pot at the year end, to prevent my pension reducing later in the year. Maintenance isn't paid on pension payments so how can she do this, I have total justification in doing this given my age which safeguards future income for the children so what grounds would she have, indeed how would she know surety that's not for CMS to tell her. This seems like a minefield.
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#8
(12-10-2017, 09:16 PM)Reefman Wrote: Thanks again.  So just to clarify they can't make me pay the extra on the full amount of increase over the remaining weeks of the case year just an revised weekly payment over the remaining period.

Regarding  pension payments I'm worried now as irrespective of the 25% figure I've always been planning to make a lump sum payment intomy  pension pot at the year end, to prevent my pension reducing later in the year.  Maintenance isn't paid on pension payments  so how can she do this, I have total justification in doing this given my age which safeguards future income for the children so what grounds would she have, indeed how would she know surety that's not for CMS to tell her.  This seems like a minefield.

Regardless of CMS, if you was married, she might still have a claim on any persion but only during the relatinship time, and any settlement would take into account any she has.

There is several ways how the considered income can be varied, but the main ones are excessive pension contributions (as they reduce your taxable income) and also if you get any Benefits in Kind.

Your employer paying you as normal till the end of the case year would not change your overall liablity, as its a known pay rise, what will take you over the 25%, from the same date. This change will be applied from the first day after you start to have the increased wage, and how often you get paid will not come into it.

My suggestion is once you get your lump sum, work out what you have to pay until the end of the case year, and put it in a seperate account. Then pay it as its due, or do it all in 1 payment, but in the Referance, put child support and the dates its for.
Posts made by me are my opinion and any factual information should be checked out. If you do not have a Solicitor, often your local CAB can get you some initial advice.
Reply
#9
Thanks again for your time and patience in replying.

One final point, in your penultimate paragraph you talk of liability in case year and a pay increase.

Firstly the extra income isn't a pay increase its a one off payment - am I right in assuming it's just seen as an increase until end of case year?

Secondly, say this one off increase is £1200 am I right in thinking my additional liability would be (1200*16%) /52 multiplied the number of weeks to end of case year equating to £3.70/wk so a total liability of £18. 50 over 5 weeks.

And not 16% of £1200 / no of weeks to end of case year ie £38.40 over 5 weeks a total liability of £ 192

As this makes a big difference

Many thanks
Reply
#10
(12-13-2017, 06:41 PM)Reefman Wrote: Thanks again for your time and patience in replying.

One final point, in your penultimate paragraph you talk of liability in case year and a pay increase.

Firstly the extra income isn't a pay increase its a one off payment - am I right in assuming it's just seen as an increase until end of case year?

Secondly, say this one off increase is £1200 am I right in thinking my additional liability would be  (1200*16%) /52 multiplied  the number of weeks to end of case  year equating to £3.70/wk so a total liability of £18. 50 over 5 weeks.

And not 16% of £1200 / no of weeks to end of case year ie £38.40 over 5 weeks a total liability of £ 192

As this makes a big difference

Many thanks

At first your child support is worked out over your case year, and then updated every year  UNLESS

1, Your Taxable income is going to Increase by 25%, and this is considered from the date of the change, in this case your redundancy.
In your case, the higher amount will kick in from the date of this change, until the end of your case year.

2, If a decrease of 25% is known, the change applies from that date.
In your case, this is day 1, of your next case year.

3, If you go onto a Qualifying Benefit, your liability is capped at about £7 per week with no staying contact, Nil if you exceed 52 nights a year.

Example, to keep number simple
Income over the case year Jan 1-Dec 31 being paid on current earnings of £15,600 per year, £300 per week.
Dec 2, you get redundancy, meaning your estimated income for that case year is now going to be £25,000, £480 per week.
From Dec 2 your payment would be based on weekly income £480, up to Dec 31.

Your renew would be at £25,000, so on Jan 1, you would then report the drop of over 25% if you was not going to exceed £18750 per year.
Therefore, it would recalculate to be at the current weekly income rate.
Posts made by me are my opinion and any factual information should be checked out. If you do not have a Solicitor, often your local CAB can get you some initial advice.
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