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When is a lump sum bonus not a lump sum bonus?

When you are dealing with child maintenance, that’s when.

Just a short note this time to remind you as to the treatment of bonuses when dealing with child maintenance.

For those that receive them, bonuses are more often than not, awarded annually.  When dealing with financial settlements, that recently received or about to be paid lump sum is often treated as cash or capital on the receiving party’s side which is available for division as that is, after all, what it is.

However, child maintenance is worked out by looking at income received from all sources over the preceding year (usually) including bonuses.  This means that for child maintenance purposes, the bonus is averaged over the year and treated as income.

Do be aware therefore that if child maintenance is a feature of your financial settlement, to include an award of bonus could potentially count it twice – as capital available for division and as income used to calculate maintenance going forwards.  Of course previous years’ bonuses which have not been spent are still capital.