How is child maintenance calculated?
How to determine child support amount in cases of separation or divorce from parents, is a recurring question that is frequently asked by our clients and whose answer is often not straightforward.
The duty to provide for the children is a direct consequence of the establishment of paternity, and parents are therefore obliged to provide for their children until they are in a position to bear their own expenses. Maintenance shall be enough for all the fundamental needs for the harmonious and balanced physical, social and intellectual development of the children (housing, transport, education, clothing, leisure, etc)
In a common family framework, provide for the children is part of the couple’s normal sharing of expenses, with no need to stipulate rigid amounts for each of the parent’s contribution.
However, in the event of divorce or separation, or even when the parents are not married and do not live in a common economy, it is necessary to determine the extent to which the parent who has not been entrusted with the custody of the child contributes to living expenses. This should happen, preferably, by consensus of the parents who must formalize the necessary custody and maintenance agreement to be sanctioned, depending on the cases, by the Court or the Civil Registry Office.
How is maintenance amount determined when there is no parental agreement?
In the absence of a parent’s agreement, it is up to the court to determine maintenance amount. However, and contrary to what happens in some countries, there is no “mathematical” formula in Portuguese law that allows the child support to be automatically determined (e.g. a percentage of each parent’s disposable income). Therefore, the courts are guided by criteria of equity, assessing, on a case-by-case basis, the contribution due by each parent, taken into account that the law provides that both are obliged to contribute to the support of their children in equal measure.
To say that parents are obliged to contribute to the maintenance of their children in equal measure does not mean that the monetary contribution made by each one is the same, but rather that the effort of both of them to raise their children should be, in economic terms, proportionally identical. Thus, for example, in the case of an ex-couple in which one member has a monthly income of € 5,000.00 and the other of €1,000.00, maintenance shall reflect the difference in economical means of each one.
Finally, the amount of child support should take into account the direct expenses of support for minors (education, clothing, food, etc.), but also the set of charges that the parent who has custody has to bear in order to provide them a standard of living equivalent to that of the parents. Thus, when fixing maintenance amount, all other expenses that the parent who has the children in its care must bear, such as housing, transportation, entertainment, social expenses, etc., must be taken into account.
How to increase child maintenance amount?
Maintenance payments, in particular those owed to minors, are stipulated taking into account a particular situation (child needs and economical possibilities of the obliged ones, in most instances the parents)
However, it may happen that the amount fixed at a given time, either by judicial decision or by agreement between the parties, becomes inappropriate.
And this could happen because the needs of the child have changed. Indeed, the needs may decrease, which will happen, for example, if the child stops attending private school and starts attending public education. On the contrary, the child’s needs may also increase. Imagine the possibility of being diagnosed with a disease whose treatment involves the expenditure of large amounts; or that he has school difficulties and needs tutoring. But it may also happen that the possibilities of the parents, or one of them, change, either for the better or for the worse.
Thus, for example, maintenance that is stipulated at a certain reduced amount because the father is unemployed, should be increased if he finds a job in the meantime that allows him to earn a higher income.
Likewise, if one of the parents becomes unemployed, sick or unable to work and, as a result, his income is significantly reduced, the reduction in child support can be considered.
There are, therefore, countless cases in which the person who is obliged to pay child support may feel the need to change it, and the same happens with the one to whom child support is paid.
In any case, and whenever it is intended to change the amount of child support, an agreement must be formalized or lawsuit must be brought before the court for that purpose. It is a relatively simple and not very expensive process that, as a rule, is also not very time-consuming.
Often those who are obliged to pay maintenance are no longer able to do so, just start payment a smaller amount then the one that is due and do not formalize the reduction. Now, this is a mistake that is often expensive! If the reduction in amount of maintenance is not formalized in an agreement or in a legal action intended for that purpose, the unpaid amounts will accumulate, month after month, and the debtor may be obliged to pay them in full.
How to reduce child maintenance amount?
Any and all facts of life that cause a relevant change in the economic conditions of the parent obliged to pay maintenance or the child to whom it is paid may, eventually, justify a reduction in the amount of maintenance.
It is known that many of the decisions of our higher courts within the family jurisdiction concern maintenance lawsuits.
Now, knowing that maintenance can be stipulated soon after the birth of a child and that it can be maintained, under normal conditions, until the child reaches 25 years of age, it is natural that there are circumstances in the life of the parents or children, who could cause a change in the amount of maintenance – either for more or for less.
The law determines that the maintenance allowance is fixed according to the needs of children and the possibilities of the obliged (the parent). However, the needs of the child or young person may change over time and lead to an increase in the amount of child support (for example, an illness or accident that results in exceptional health care costs, the exercise of expensive sporting activities, more expensive school education, etc.) or a reduction in its value (dropping out of school, starting work, receiving an inheritance, etc).
On the other hand, the circumstances of the parent who is obliged to pay the pension may also undergo changes that affect his disposable income (unemployment, disability, bankruptcy, birth of other children, etc.).
In what cases have Portuguese courts allowed reductions in the amount of maintenance?
It is not possible to determine all life situations that give rise to a reduction in the amount of maintenance.
In theory, all situations mentioned above may result in a reduction or increase in the amount of maintenance. In practice, however, only the analysis of a specific reality will permit to assess whether a given fact of life – for example, the birth of a new child to the father who pays maintenance – should or not affect maintenance amount.
In fact, it should be borne in mind that, in this example of the birth of a new child, this may not have a significant impact on the income of a parent (who earns high wages) and, in this case, it will not cause any reduction in the pension. On the contrary, if the level of income is low, such a birth may lead to a sharp reduction in disposable income and, consequently, may justify a reduction. Likewise, the personal insolvency of a parent required to pay maintenance may or may not be relevant. It will not, in principle, be relevant if the parent has voluntarily placed himself in a situation of insolvency (perhaps with the purpose of failing to pay maintenance)… Nor will it be relevant if maintenance is already at values close to a minimum.
What happens when there is a salary reduction?
Again, such a reduction in salary may or may not be relevant depending on the concrete circumstances of father and son. In fact, and from the outset, the courts have understood that parents have a duty to adequately provide for their children’s livelihood, even if, to do so, they have to deprive themselves of some expendable assets (a car, for example) or else they have to find a second occupation. In other words, before the reduction of child support is contemplated, alternatives must be explored to keep the amount of maintenance intact, especially if this, as is so often the case in Portugal, is already on the threshold of acceptable.
This equation must reflect, of course, the amount of child support that is being considered. Naturally, a €100 monthly maintenance allowance is unlikely to be reduced in court, since, below that amount, in our view, the healthy and harmonious growth of the child or young adult may be at stake. A more generous pension, of €1,000 per month, for example, will be more likely to suffer a reduction depending on the living conditions of the parent or the child. Thus, we believe it is foolhardy to assert, as some of our colleagues do, that a decrease in wages cannot, in itself, lead to a reduction in the value of the maintenance allowance. On the contrary, we believe that the decrease in salary may effectively determine, in itself, a judicial reduction in maintenance amount. This will depend, of course, and as in any other situation of maintenance modification, on the concrete assessment of that specific situation and, in particular, on the possibilities and needs of each of those involved.
Thus, in principle, any and all facts of life that cause a relevant change in the economic conditions of the parent obliged to pay maintenance or the child to whom it is paid may, eventually, justify a reduction in the amount of maintenance.
The automatic reduction of maintenance provided for in a custody agreement or custody order
In our opinion, there is nothing preventing a rule of automatic maintenance reduction in a custody agreement or custody order.
For this to happen, it will be imperative to provide that:
- The reduction shall not affect the child’s right to maintenance, which means that it cannot be reduced beyond a certain amount, considered the minimum allowable taking into account the needs of the child and the possibilities of the parent who pays child support;
- The reduction is subject to an objective and easily determinable condition.
Thus, for example, it can be agreed that maintenance amount will vary annually according to the parent’s income, provided that this does not imply the payment of a maintenance allowance of less than a certain predetermined monthly amount.
Thus, and except for agreements and regimes that already provide for an automatic reduction of maintenance, it will not be possible to reduce it unilaterally due to the reduction in the income of the parent obliged to pay it.