Net vs Gross Calculation - Please Help!

I have a question that I would really appreciate some advice on regarding child maintenance Payments. Please see below a brief summary of events:

Divorced 2008 - Child Maintenance was calculated based on the CSA online calculator at 20% of my NET Salary for the two non- resident children . This also formed the basis of the Court Order.

May 2012- My first child with my new wife was born. My Ex-Wife and I agreed between ourselves to reduce the Child Maintenance payment to 17% of my NET Salary - this was again based on the CSA online calculator.

Feb 2016 -My wife is now due our second child.

I have advised my Ex-Wife of the change effective from February 2016, which she is now disputing. This equated to 14% of my NET salary (consistent at a 3% reduction when my first child with my new wife was born) She is demanding copies of pay slips and P60 documentation to support my claim for a reduction and is requesting that a full financial disclosure comprising of form E''s is undertaken if she continues to disagree with the amount. There is also an insinuation that I have vast sums of money that I am not disclosing.

I must add that when she receives an increase in the payment every April as a result of my annual salary review there has never been a dispute or evidence requested to support this.

Following my Ex-wife''s response, I have looked into this further and note that the calculation for Child Maintenance has now moved from a NET to Gross salary basis since the reduction was agreed for my first child in 2012. However, for the purposes of the initial recalculation, I continued to use my NET salary when calculating the revised amount. which has confused things to some degree.

I am not sure how to proceed from here, given that all the previous calculations have been based on my NET salary and that we are unlikely to reach an agreement between ourselves.

Given the financial implications of having our second child I am keen to avoid any unnecessary costs associated with court.

Can anyone help to shed some light on this? Is it worth registering with the CMS to avoid any further confusion? Am I correct in that if I did this it would supersede any court order that is in place and do they take into account other factors such as fuel costs ?

Many Thanks in advance.

Presumably you have a private arrangement based on what you calculated CSA amount to be? Or do you have a court order?

Under the gross scheme for two children you would pay 16% of your gross salary for up to £800 per week (£41600 pa). For income above this the amount would drop to 12%. Pension contributions are deducted but not tax or NI.

To allow for the two children that live with you 14% would be deducted so (if you are on less than £800 pw) your ex would get 16% of the 86% that was left which equates to 13.76%.

If it is a private arrangement your best bet is to calculate how much it is for you and tell your ex that going forward that is how much you are going to pay (unless you want to offer her more of course) and if she wishes to apply to the CMS then let her do so and pay the application fee.

If there is a court order in place then you can''t vary the amount. You will need to either apply to the court for a variation or, easier and cheaper, apply to CMS yourself.

Thank you for your response!

There is a court order in place from when we were divorced in 2008 but we agreed a reduction in child maintenance between ourselves without court intervention when my first child with my new wife was born in 2012. I think there was a mutual agreement that we had spent enough on solicitors. I provided her with screen dumps of the CSA calculator to demonstrate the difference in the payment which she accepted.

My ex has also happily accepted any increase in CM following my annual salary increase in April without question since our divorce 8 years ago.

We used the calculator as a guide as I wanted to make sure I was paying the correct amount . Obviously the system has changed since 2012 and has moved from a net to gross basis so I am not sure how to proceed.

If I register will this supersede the court order? It seems outdated now given we have agreed our own changes to CM in 2012 and my ex wife also requested that I cease paying SM once she started full time employment ( all of which is documented ) I guess you could argue that we have a private agreement to some degree.

I don''t want to spend any more time or money on legalities if it can be avoided but I can''t see her accepting my initial proposal.

I would just like this resolved or on the way to being resolved before the new baby arrives.

Thank you

I forgot to add that my salary would be in the bracket above £800. Not sure how that affects the percentage when I also have 2 children living with me from Feb 2016.

Thanks

(Gross salary-pension contributions)/100*86 will give you your assessable income.

Of this your ex would get 16% of the first £800 (ie £128) plus 12% of anything over the £800 threshold.

Have you returned to court to agree the reductions in CM and SM that you have made in the past or is your ex likely to ask the court to enforce the short fall?

No, we have never amended the order . She would not disclose any of her income / tax credits to me when she commenced full time employment and then subsequently asked that SM cease ( this has all been lodged with our respective solicitors ) . She never wanted me to know what she was earning but expects me to provide her with all off my financial documentation.

She accepted the reduction in CM in 2012 also after I provided her with the CSA online calculation and a copy of my payslip. She happily accepts the increase in payment without question every April which is convenient.

My situation has completely changed from when we first divorced. And there are now 4 children in the equation. I want to ensure that I am paying what I am supposed to for all of them.

The problem is she could try to enforce the order and she is not going to agree to accept a percentage of my net salary given the system has changed. I think I am just curious to know whenever our agreement is classed as through the courts or private because we have made amendments to it ourselves?

If no trigger points occurred and no application has been made for a variation to the order then the amount in the court order is the amount due.