Was wondering if someone could advise. Apologies for the number of questions..
I've recently had the dreaded CMS letter. In summary I haven't paid any CMS for 12 months as my ex has refused to engage with me and so I have not been able to pay it (I'm not allowed to contact her and she wont engage with my solicitor, I've sent 4 letters all costing £55 each). I have 3 kids and I've given the kids cash sum payments but more as gifts rather than CMS (Birthdays etc). I have set aside the funds however so that I can backdate payments for the past 12 months. I was hoping to do a family based arrangement.
Now that I have been contact by the CMS clearly a family based arrangement between me and the ex is off the table nor will I have to (or want to) backdate payments. However she has selected collect and pay. I'm going to tell CMS that I want to do Direct Pay and hopefully they accept this (I do have a conviction for DV), any advice on whether CMS will accept Direct Pay? My initial date (i assume this is claim start date?) is Aug 2020 but will the fact I haven't paid for the past 12 months count against me?
Also I am currently unemployed and so they have based the payment amount on me being on UC so the flat rate. Some questions:
I assume my annual review will be in August 2021?
If I get a job say Oct 2020 will they use earning on the last P60 so through to Apr 2021 or through to August 2021 for my annual review?
If they base it on last P60 and my annual salary is £20k then between Oct 2020 and Mar 2021 (end of tax year) I would have earnt £10k, therefore at my annual review would they base the CMS on my earnings as per P60 of £10k or would they base it on annual salary as at Aug 2021?
I assume if I do overtime one year and the company then stops overtime my CMS will be inclusive of the overtime if my earnings have not dropped by more than 25%? Therefore I should always try to see if the employer will give me time off in lieu of overtime?
If there are issues then I assume I can always ask ex to reconsider and do a family based arrangement by writing to her via solicitors? Unfortunately I am not allowed to contact her except via solicitors.
I believe it is beneficial to set up an online account as it is better to communicate with the CMS online?
Should I tell the kids that I am now paying their mum some CMS to provide for their upkeep?
My intention is that if I am stuck with collect and pay to stop any cash payments to the kids and instead just get some gifts and tell them that I am paying CMS. What do you think?
Pensions - I am not yet divorced and therefore it is my understanding that I shouldn't pay into a pension yet (even though I am separated) as it can be taken into consideration as any financial settlement?, however once I am divorced to pay the maximum allowed into a pension in order to reduce CMS amount especially if it is Collect and Pay. Please note I do not wish to not pay CMS and not provide financially for my kids. However I am loathed to pay via collect and pay, Is my understanding re pensions correct and has anyone had any success in paying pension amount in line with the FCA guidance table and have the CMS accept it?
Are there any other pitfalls I should be mindful of and what can I do in advance to mitigate against them?
if your ex opened the cms case and its dated August 2020, then yes your annual review will be August 2021, and will continue to be every August going forward.
its difficult to second guess how CMS will behave. As your out of work and on UC, then all you need to do is let CMS know as soon as you start a new job. tell them within 7 days of starting the job.
for annual review, CMS will just check your tax records. whatever amount is in there, they will use to calculate your maintenance. If the info is out of date, then the onus is on you to correct CMS and give them correct info to calculate maintenance properly.
I don't think CMS will be backdating payments for past 12 months, as hopefully they are aware that your ex has refused to co-operate with them in giving them her bank details. if you were not registered with CMS 12 months ago, then they won't back-date.
from what other dads mentioned, CMS will not just opt for collect and pay, just because your ex demands it in order to punish you. speak to them about doing direct pay. if thats not possible, set up your self service account with them & send messages.. its very useful when you need to send them info like payslips, p60/p45 and less aggravation than if you were speak to them.
if you don't want to pay more maintenance, then its better to avoid doing over-time all together, as well as other things like bonuses, pay rises. some dads got stung for having a company car allowance.
i have never been bothered with pension, but according to FCA guidlines, i have never really bothered to pay into a pension, and now i am 36, and i feel that i should be paying into a pension because I am worried about my retirement. then paying something like 19-22 % is not unusual for my age.
its entirely up to you if you want to voluntarily pay extra separate amount to support your kids. i prefer to only pay what CMS tells me to pay.
They cant make you go on collect and pay, they will only do this if you have a history of non payment from either them or the CSA. Ring them and say you want direct pay. They can get your ex's account details from her and pass them over.
It depends on alot about the figures, but dont forget the magic 25% rule.
With regards to overtime, I would suggest that your best option might be to open a flexible pension (on that allows sporadic payments) and put all of your overtime into this - that way you will get the benfit of the money in the future, and CMS deduct pension payments from your income when making their calculations.
I can't be forced onto Collect and Pay even if my ex chooses this as I have no history of 'non compliance' as they word it, so no history of missed payments or messing around with payments dates. If my ex does not wish to provide bank details then they would advise her to speak to her bank and open a new bank account with a non-geographic sort code and provide this instead. CMS will obtain bank details and pass on to me so we have no contact.
Pensions - yes contributions are taken into consideration, he mentioned most I could pay based on my age was 22% but if I went over it would be considered on a case by case basis. I explained I've been out of work for some time so if I get a job then I may want to significantly overpay in order to catch up. He neither confirmed or rejected this as a reasonable reason and said it would be reviewed when I declare it (gotta get a job first). He did say that occupational pensions are considered more immediately rather than personal pensions as they can access HMRC info straight away. Personal pensions seem a bit more tedious to get factored in.
Pension Contributions - he explained based my age I can pay upto 22%. I did find the below table online which confirms what he was telling me:
Age - Contribution
30 - 12% to 18%
35 - 16% to 22%
40 - 18% to 25%
45 - 25% to 30%
50 - 30% to 45%
55 - 45% to 70%
The magic 25% rule - we discussed this in detail and its odd how it works and it is important to try and understand the timings between annual reviews, tax year, starting a new job, moving onto benefits etc. However he did confirm that if salary reduced by 20% eg change of job job then this would not result in a CMS payment change, but if I wasn't paying into a pension and started paying 5% into an occupational one then as my income has dropped by 25% then they would review and reduce my payments accordingly. Different for personal pension he seemed to be saying that it only considered at annual review and not real time like occupational as they get this from HMRC. On the other hand if salary increases by 20% then again no change to CMS. The no change is only until the next annual review at which point they revise based on HMRC data.
Backdated payments - as the claim has just opened then no requirement for me to do so to cover the months when I haven't paid anything. I'll probably just give the kids some money over the summer holidays.
Online portal - all set up, was easy to do. Does anyone know if I have this whether this will be the method they send me letters or will I still get letters in the post? (I'd prefer online only).
I get an online notification of a message waiting, look on the portal and the letter is there. Then I generally(but not always) receive a hard copy through the post a few days later. I think the hard copies are restricted to informing you of decisions/major changes, whereas the portal also acknowledges your letters and documents and that investigation is ongoing, but they do not seem to post these. Makes sense as a waste of money otherwise.
Not sure if you can ask them not to manually post or not. Have never tried.
One thing i would advise is keep chasing cms to ask do they have your ex bank details. Sounds silly but if this drags on and they get her bank details e.g in october, then they will make you do backdated payments from the august registration date.