FAQ – company dividends and child support
30 July 2019 by Aimee Edwards
My spouse receives part of their income as dividends from their business. How do I include this income in the calculation for child support?
When calculating the amount of child support payable to the resident parent of a child, the non-resident parent’s (also known as the paying parent) gross weekly income is the basis for the calculation undertaken by the Child Maintenance Service. The type of income that will be considered for the calculation is governed by complex rules and is based on how the income is considered for tax purposes. This means that not all sources of income will be automatically included in the calculation.
If a non-resident parent’s income includes income from dividends from their business the Child Maintenance Service calculation could result in a lower assessment figure for child support than expected because the dividend income is unlikely to be included automatically in the income figure.
In this situation the resident parent should make an application for variation with the Child Maintenance Service. Variation, if the application is successful, allows the Child Maintenance Service to consider certain additional income in the calculation for child support and as a result could increase the child support payable to the resident parent. The success of an application depends on the circumstances of each case and variation will only be made to calculations where it is considered just and equitable to do so.
Due to the complexities of variation this is often an area of dispute and parents should seek legal advice or advice from the Child Maintenance Service if they have any questions. If you need advice and further information our team of experienced family solicitors can help you– contact Fisher Jones Greenwood by calling 01206 700113 or email [email protected]