Hi
I'd appreciate some advice please.
I'm currently separated and going through an acrimonious divorce. My two kids (aged 10 & 5) live with their mother.
I changed where we lived and my job twice within a year trying to save my marriage, and I ultimately lost my job in April last year. We stopped living together in June 2022.
She applied to CMS for maintenance in July, and as I was at the time unemployed, she was awarded the basic £7pw.
I started a new job in August, at a significantly lower salary than previously but I needed to be in work. I informed CMS promptly of a change in my circumstances.
I also used the CMS calculator based on my new income, sent a copy to my ex-wife, and have paid her this amount every month since.
CMS contacted me in late September with a re-calculation, but significantly higher than I expected. When I queried it, they have checked with HMRC and based in on my income from tax year 2020-21.
I called them, and they said my current earnings are 22% lower than my historical earnings, which is less than the 25% threshold, hence they've calculated based on HMRC. I protested that I was unemployed when the case was opened, and my current earnings are infinitely greater than they were in July, and that what I earned two years previously (different location, different employer) were surely irrelevant. They told me there was no right to appeal, and they were just applying the law, and if I didn't like it I should contact my MP (which I have).
I also noted that my ex-wife had appealed the initial award of £7pw on the basis that I had started work (she had claimed in July, but the award was finalised in August and backdated to the claim date). I don't actually know whether the re-calculation was done on the basis of my change in circumstances, or her appeal - and I don't also know whether the distinction between the two has any relevance on the outcome. In my opinion, changing from unemployed to employed, then being assessed based on historical earnings from two years previously is a joke.
My concern is that my ex-wife, having initially accepted what I was paying, now thinks she is being cheated and refuses to accept anything other than what the CMS have calculated. She is threatening that if I don't pay that amount, she will apply for Collect and Pay which will incur an extra 20% - overall it would be over £500 per month more than it should be. She has absolutely no interest in finding a "family based agreement", even though I've pleaded with her that I will gladly pay what I truly should be paying (and indeed have been paying).
However I've calculated that if I increase my pension contribution from 6% to 10% this should adjust my current gross earnings to just over 25% lower than in tax year 2020-21, which is their benchmark for my current earnings. I have discussed this with my employer, and they are agreeable to give me a formal letter confirming my employment, income and deductions.
I have to inform my employer this week if I wish to change my pension payments for it to have impact on my January pay.
The question is should I do this? Would CMS ask whether I am deliberately depriving myself of income? I can't really afford to earn less than I already do, but this outcome is better than if my ex-wife enforces the CMS-calculated amount. It will also reduce the amount she gets, so I also wonder whether disclosing this plan to her might persuade her to make a "family based agreement".
Thanks in advance of any advice - I'm finding this hugely stressful.
Lamp
hi,
this is standard CMS practice. if your unemployed or on benefits and then you start working again, CMS will check most recent tax year income from HMRC and base your maintenance payments off that. if theres a 2021-2022 tax year record for you, then CMS should be using that. If they refuse, then you should take complaint route with your MP. You can make pension contributions if you like. As CMS now involved, I would suggest to not discuss any maintenance matters with your ex now as it will cause more conflict.
are you seeing children at the moment?
Hi Bill
Thanks for your reply.
HMRC have my earnings from 2021-22 of course, and my earnings were sufficiently higher than 2020-21 in order to render my current income as exceeding the 25% threshold. However, they claim that because I submit a self-assessment tax return, the final position for this year is not finalised so they will use the prior year (which is of course not in my interests). I have included this point in my submission to my MP.
On the pension contribution, I trust I can make an immediate change and cause the 25% threshold (from the 2020-21 level) to be triggered without CMS crying foul on some technicality?
Noted your advice not to engage with my ex - I think this is sensible if the pension route is viable in order to resolve this issue, whereas otherwise I was of course needing her support.
I had my children live with me for 8-9 days in November, but have not had them since (we live 100+ miles apart and she is being obstructive, but that is another matter).
Lamp