As we have already stated a mother can apply for a variation on any one of the following grounds:-
1. If your ex believes that you have assets worth over £30,000 after deducting any mortgage or loan relating to them she can make an application on this ground. If agreed the Child Maintenance Service will apply an 8% notional interest rate against the asset and then add this to your gross income which will then increase the maintenance you have to pay. So for instance if you own a house worth £140,000 with a mortgage of £40,000 the assets will therefore be worth £100,000 and an 8% income will be ascribed to that which will increase your annual income for child support purposes by £8,000 per year. If your income remains below £800 per week as a result of that increase then your child maintenance will be increased by £18 per week for one child, £23 per week if you have two children to support or £29 per week extra if you have three children to support.
2. Unearned Income. Where you receive additional income that is not counted for child maintenance purposes this can be taken into account. The most usual unearned Income relates to Directors dividends on top of a relatively small pay. The annual effect of the dividends is totalled up added to the already assessed income and then the entire maintenance is calculated on the basis of the amount increased by the dividends. So for instance if you have an income of £200 per week PAYE and dividends of £400 per week then your child maintenance will increase from £24 per week for one child to £72 per week after taking into account your £400 per week additional dividends.
3. Income not taken into account. Where you are assessed to pay the flat £7 rate or Nil rate due to the operation of the rules but you have gross weekly income then that income can be used to assess your child maintenance. This is in reality a relatively rare ground.
4. Diversion of income. This is perhaps the most common variation application of all. If your ex feels that you have the ability to control your income because you are either self-employed or a Company Director she can make an application to the Child Maintenance Service to investigate whether income is being diverted to other people such as your current partner, your brother or sister or for instance to provide you with a flash car. A very common mistake made is that Accountants advise parents that how they run their company is entirely a matter for them and no Court can challenge that. Whilst this is very much true in relation to taxation law it is not true in relation to child maintenance law where the first consideration of the Tribunal is the welfare of the child. The welfare of the child is not improved by allowing a parent with a company to retain large sums therein or hugely overpay their partner to the detriment of their own income which then detriments the child. If you therefore find that an application like this has been made against you it is very important to seek advice quickly on 03456 588683.
We have been representing parents in relation to departure and variation cases ever since the departure and variation legislations were first introduced in 1996. The outcome of these applications if poorly defended can be unaffordable and it is therefore most important to ensure that the CMS or Tribunal has a clear picture of the entire financial position in order to decide where diversion has taken place and where it has not.