CMS vs Family-Based Arrangement: Which Is Better?
When it comes to child maintenance, you don't have to use the Child Maintenance Service. Many parents make their own "family-based arrangement" instead. This guide compares both options to help you decide which is right for you.
In This Guide
Overview: Your Two Main Options
Family-Based Arrangement
A private agreement between parents. You decide the amount, timing, and how payments are made. No government involvement.
Child Maintenance Service
Official government service that calculates and (optionally) collects child maintenance. Enforceable if payments aren't made.
Family-Based Arrangement: Pros and Cons
Advantages
- ✓ No fees: Keep 100% of payments (no CMS charges)
- ✓ Flexible: Agree any amount, timing, or in-kind support
- ✓ Private: No government involvement in your finances
- ✓ Quicker: Can start immediately with no application process
- ✓ Relationship: Can help maintain a cooperative co-parenting relationship
Disadvantages
- ✗ Not enforceable: If they stop paying, you can't force them
- ✗ Requires trust: Relies on both parents being honest and cooperative
- ✗ May be unfair: Without calculation guidance, one parent may get a bad deal
- ✗ Can break down: If relationship deteriorates, you'll need to start over with CMS
CMS: Pros and Cons
Advantages
- ✓ Fair calculation: Uses standard formula based on verified income
- ✓ Enforceable: CMS can take action if payments aren't made
- ✓ Income verification: Uses HMRC data, so income can't be hidden
- ✓ Less conflict: Removes need for direct negotiation
- ✓ Annual reviews: Automatically updates when income changes
Disadvantages
- ✗ Fees: £20 application fee, plus collection fees if using Collect & Pay
- ✗ Rigid: Formula doesn't account for all circumstances
- ✗ Slow: Can take weeks to set up and process changes
- ✗ Impersonal: Less control over your own arrangements
CMS Fees Explained
Understanding CMS fees is crucial when deciding:
| Service | Fee |
|---|---|
| Application fee | £20 (one-time) |
| Direct Pay | No ongoing fees |
| Collect & Pay (receiving parent) | 4% deducted from payments |
| Collect & Pay (paying parent) | 20% added to payments |
Example: On a £500/month calculation, Collect & Pay means the paying parent pays £600 (£500 + 20%), and the receiving parent gets £480 (£500 - 4%). That's £120/month in fees!
Which Should You Choose?
A family-based arrangement works best when:
- You can communicate civilly with the other parent
- You trust them to pay regularly and honestly
- You want flexibility (e.g., paying school fees directly)
- You want to avoid fees and keep things private
The CMS works best when:
- The other parent is uncooperative or dishonest
- You can't agree on a fair amount
- You need enforcement powers as a backup
- You suspect the other parent is hiding income
A Hybrid Approach
Many parents use a smart hybrid approach:
- Use a calculator to determine the "fair" CMS amount
- Make a family-based arrangement based on that figure
- Keep the CMS as a backup - if payments stop, you can apply
This gives you the flexibility and fee savings of a private arrangement, with the security of knowing exactly what you'd be entitled to through the CMS.
Frequently Asked Questions
Can I switch from a family arrangement to CMS?
Yes, you can apply to the CMS at any time. However, you can't claim backdated payments for the period you had a private arrangement.
Is a family-based arrangement legally binding?
No, unless it's made into a consent order by a court. A simple written agreement between parents is not legally enforceable.
What if we agree more than the CMS amount?
That's fine. You can agree any amount in a family arrangement. Many parents agree above the CMS rate, especially for extras like school fees or activities.
Can the paying parent demand to use a family arrangement?
No. The receiving parent always has the right to apply to the CMS. The paying parent cannot prevent this.