Child maintenance complications and the self-employed

Divorce|Family Law|January 16th 2013

Just how much child maintenance a non-resident parent should pay  is an complex and emotive subject. Over the 20 years of its existence, the Child Support Agency (CSA) earned a reputation, amongst other things, for heavy-handed inflexibility in its pursuit of separated and divorced fathers. Some of these complaints were justified. As recently as October last year, it was found guilty of “obnoxious” and “unreasonable” legal failings.

Set against failures, however, are the thousands of women in genuine need who are still chasing their children’s fathers for reasonable maintenance, or even a penny of payment. They see their former partners running rings around a sluggish system.

Of course many non-resident parents care deeply for their children and live for every moment of contact. But some do not and the payment of court-ordered maintenance may be more or less the only form of parenting practiced by the latter group – remote, wrapped up in careers or new relationships, or simply self-absorbed.

Child maintenance payments are calculated according to a defined formula during divorce proceedings. Judges start with specific percentages of the non-resident parent’s income, from 15 per cent for one child to 25 per cent for three or more children and these are then adjusted according to circumstances. For example, a deduction will generally be made for the time the children spend with the non-resident parent.

But what happens if the non-resident is self-employed and does not earn a fixed income? This has been some uncertainty surrounding this complex question, one discussed by barrister Byron James on Family Law Week.

He examines the implications of a case we have already discussed on this blog – Gray v Secretary of State for Works & Pensions. This concerned a self-employed handyman called Trevor Gray who declared a weekly income of £151.37 to HMRC. However, a tribunal later ruled that he actually had an annual income of £18,300.

Mr Gray argued that the courts should accept the figures he had submitted to HMRC but his appeal was unsuccessful. Lord Justice Ward ruled that child support officers were under no obligation to restrict themselves to submitted figures when calculating child maintenance liability.

According to Mr James, the case throws an important light on the powers held by child support officers.

“This has potentially very significant consequences and arguably places upon child support officers a function that they are not necessarily in a position to properly conduct…the process of analysing lifestyle and income is not always straightforward for the court, and that is with a great deal more resource and time.”

In addition, there is a real danger, he claims, that child support officers will now be flooded with applications for income assessment by parents. Some parents will no doubt see  an independent assessment of their ability to pay as desirable.

Could this, wonders Mr James, be “the pressure on the system that leads to it finally breaking down?”

The last thing our overstretched court system needs right now is a further drain on its time and resources. But, sadly, I can see this happening.

Photo by Chris Campbell via Flickr under a Creative Commons licence

Author: Stowe Family Law

Comments(14)

  1. Michael says:

    I do think the system CSA implemented encourages bad behaviour from both sides because the child support system isn’t fit for purpose.

  2. Kate says:

    I have a daughter with my ex. He bullied me in to taking a private arrangement of £100. I asked him for an increase a year on from his original offer to which he declined and said if I asked again he would stop the £100.

    I went to the CSA, he did not comply with their first communication so they went to the HMRC. The figures confirmed what I thought. He has a net weekly income of £1,576 a week, meaning he would have to pay me £237 a week for our son.

    He came back off of holiday and has now supplied pay slips saying he earns £362 net a week. The calculation now, including his two other children, is £22 a week.

    Firstly, I don’t understand why the CSA can just except his pay slips? He is a veterinary surgeon and a partner of where he works…He doesn’t earn £362 a week. As an equine vet he charges £400 for a call out…

    The CSA has said I need to apply for a Variation Order, how can they accept his pay slips after what HMRC told them????

    I just want a “just” amount for my child…

    It is an awfully big been £237 a week and £22 a week…

    Also for his two other children he has a consent order, does this continue or do all payments now go through the CSA? He has said his two daughters will always have more money?

    Please help

    • Marilyn Stowe says:

      Dear Kate
      You need to pursue this through to the next stage. Speak to Child Maintenance Options about how you go about it. There are solicitors unlike me, who do specialise in child support but I can’t recommend one. Don’t give up and if you pursue it yourself organisations like Gingerbread may be able to help you too.
      Regards
      Marilyn

  3. Kerry Roberts says:

    I hope these are simple questions for you to answer please:

    Given that in CSA “self employed” cases where there is disparity between HMRC income and gross income covering the same period of time, I see that CSA are now able to assess company accounts and use % share of company ” actual profits”.
    Two simple questions please:

    a) Does Judge Wards ruling cover and hold for CSA old rules and new rules cases?
    b) Does this also imply that when cash assets ( % owned by the shareholder/NRP ) are left in their company
    year on year to accumulate, that this money may now count towards a CSA Variation on the grounds of assets over £65K ?
    Thank you.

    • Marilyn Stowe says:

      Dear Kerry
      As we make clear on the blog, we don’t answer detailed questions about Child support. It isn’t a field we cover as a firm. Sorry I can’t help.
      Regards
      Marilyn.

  4. Beryl says:

    I am commenting for a friend – His 16 year old son decided to live with him for 6 months. He went back to live with his mum and she is now after CSA for those 6 months.
    He has doctors, hospital and college papers all with his address to his son. He has sent these off as proof that his son resided with him for that time, but they refuse to accept them, stating that because the child benefit still went to the mother during this time he still has to pay the amount they say he owes. He is happy to pay CSA, but he is very angry that the CSA will not listen. I cannot think how to advise him on this matter.

    • Marilyn Stowe says:

      Dear Beryl
      Why not give Child Maintenance Options a call? They may be able to cut through the red tape.
      Regards
      Marilyn

  5. Tandy says:

    The whole system is corrupt. We have greedy mothers on one side and ignorant fathers on the other. The problem is A) They apply an assumption that contribution should align to the lifestyle of the father. If he gets a pay rise so does the kid\mother. If he stops work, she gets nothing really. In many cases where the mother is moneygrabbing the fathers simply stop working, go abroad or screw the system. B) There is no control over what happens to the money that is paid, they can buy handbags, or drugs with the money…this should visible. C) Contribution should be based on the fathers involvements – Relationship and Visitation. If you’ve been married for years it should be different to a one night stand, and if you want to see the child you should only do so if you are contributing.

    Personally, parents should be forced to pay for a mediation and legal agreement that takes into account the needs of the child , and not the needs of the parents. It’s pretty easy to figure out the money needed for heat, electric, gas, water, food, clothing, medical etc. so it wouldn’t be hard to take all that into account, review the financial sitaution of the father and bost it up depending on their capability. Agree the term and create a financial mark the father is required to pay for the lifetime of the child.

    We have too many parents who focus more on hurting eachother than providing for the child. Parents should share the financial responsbility as well, and I fail to see why we are wasting money on a cma when more should be used to agree legal terms between parents.

    Personally, the mother of my child keeps asking for more and more money as she needs it for designer clothes, handbags and stuff that is for her, so when my daughter does need the money I’ll be getting another phone call with her shouting how bad a father I am………..

    • A says:

      I totally agree with your comments…
      In my case I pay £518.00pm Child Maintenance in addition to £272.84pr month mortgage half mortgage then on top of that £50 pr week,average,when I do see the children.
      My scrounging ex it a teacher who earns the same as me,per month and then claims in addition child benefits £138.00,per month,family tax credits of a staggering amount of,get this,initial claim of £441.00 paid then £333.00 and in addition my contributions, on top of this still lives in the old marital home of 4 bedroom house…and this is justice..she has just purchased a new car and refurbished the house..
      The best bit is that over the years she has helped herself from joint finances from the account and put into her own account…total amount including her savings of £28.000…and this is British justice..
      I note the CMS still thinks it can just weigh in to NRP’s salaries and take as they see fit…
      All I can say is a bloody joke…
      What is left out of my salary is equal to what is on the dole so who was the fool,,yup me..Thanks a lot Duncan Smith for making NRP suffer by no costs to government.

  6. j says:

    I do agree that there is good an d bad in both. My two boys ages 11 and 12 have seen their father approx. a dozen time in the last 11 years. He owes £34,454 in back dated maintenance and refuses to speak to the new child maintenance service. He is self employed and moves around quite a bit. so for the last 11 years he has evaded any attempt to discuss or resolve the situation and as a single mum on a reasonable wage there have still been weeks where I have worried about the bills and even feeding my children. he calls me names when he does see the kids and generally has upset my youngest that he has been talking about suicide. Thankfully we are close and I have got him some counselling and we seem to be on the right path again but he has made my son feel that he isn’t wanted and that he was a mistake which is unforgivable. So. its not just about the money but I can say that in my opinion there is no help, no support, no structure or strategy in place to help single mothers or fathers who have to bring up children single handed. The new child maintenance service is like a dog with no teeth and unless someone take over this government service who has teeth but can remain fair then it will not improve. Just my opinion though… rant over!! 🙂

  7. Gareth Deady says:

    No Mum NEEDS £237 a week for ONE child from a Dad! Scrounging Mums is absolutely shocking! It boils my blood! How the hell can you justify ONE SON needing £237 a week to feed?
    Child Maintainence is the most twisted thing in the world!

  8. L says:

    As a PWC, of 4 daughters I made a CSA claim over 13yrs ago. After allowing my ex-husband a year after our separation, to make voluntary contributions directly to me. He refused, and made no attempt to contact the girls. During this time and after, he continued to work full-time, and lived in a caravan in his parents garden. This arrangement required no outlay, thus meaning no accommodation costs for himself, or any overheads of any kind.
    My application for support in meeting the costs of raising 4 children, marked the beginning of a lengthy case which can only be described as atrocious..!!!
    The problem with my case is the nature my ex-husband’s working arrangements. He is a HGV driver, employed on a full-time basis by the owner of the vehicle. The said owner is a self-employed sub contractor of a national Cement company, and while pays my ex-husband a regular weekly wage to drive and operate the Cement Mixer, it is a Gross payment for my ex’ to then make his own arrangements with HM Revenue and Customs for Tax and NI purposes. And this is where the loophole lies, he is hired on a self-employed basis…and as such, falls into this category for CSA rules on arrears collection. Despite 4 Liabilty orders granted against him….his “status” affects the enforcement powers and prevents the implementation of “Deduction of Earnings” orders. Despite his wage being paid in cash with no bank acc’ usage as proof….his wage can be traced and verified from his employers business records as a regular outlay. He is paid the same amount, from the same source, on the same basis as any job, but due to the wording of the Law or definition of Self-Employed he’s allowed to escape untouched.
    For more than 13yrs, he has been completely non-compliant, deliberately provided false information, and tried every trick in the book to avoid responsibility. While the CSA’s handling of the case contains many mistakes, leading to lengthy delays in action and assessments…I constantly provides new information, and begged them to contact his “employer” but loopholes prevented. Despite providing photographs of the Lorry with registration number, him driving it, and a copy of Facebook comments made by him, and about him confirming his job and place of work….I even reminded them, the nature of his job meant his name appears on Vehicle Ins policies, and delivery notes while his digital tacho confirms his hours and continuous employment. Should they contact head office of the company reg number identifies his employer and their records confirm his wage amount.
    During the first 11yrs of the case only 17 payments were collected (usually after each liability order) and he was allowed to accrue more than £15,000 arrears. Which then led to a further blow, and due to another farce in the Law….his self-sequestration wiped the lot, and my children were due nothing. Since then, over the last 2yrs he has again accrued arrears in excess £7000, with no attempt to comply at all. All girls were born within 3yrs 7wks and despite remaining in further education, their birthdays allowed for quick reassessments and reductions in Liabilty.
    July this year marked the end of our case, my youngest daughter was 20 and his legal duty of care to any of his children is now extinguished….together with my chances of ever seeing the “closing balance”.
    Incidentally…..throughout the entire shambolic case, I constantly worked full-time, as a single mum clocking up hours to the point of exhaustion…while he went on to have 3 more daughters with a teenage girl half his age. While the CSA and the Law failed my children….I was proud to watch the 4th and final walk straight into University last month. Can any1 find a single justice in any of this..??

  9. Andrew says:

    L: I guess from your use of the word “sequestration” that you are in Scotland. I learn with interest that sequestration there discharges arrears of child maintenance – and I know you will disagree but I think bankruptcy should have the same effect in England (and on capital orders and arrears of spousal maintenance too) because that is what insolvency is all about.
    .
    As for his having more children (whatever the age of their mother) – with great respect, so what? You are divorced. If he has married again he was free to do so. If he has not, well, the days when it was considered wrong to have children outside marriage are a distant memory of older people.
    .
    Yours is a sad story, and I wish the enforcement of debt was better in both jurisdictions on this island. But you should be aware that many NRPs are multiple debtors and if debt were better enforced PWCs would face competition from other creditors.

  10. JamesB says:

    I know someone who trained and then (now) works as a family law barrister to avoid paying child maintenance. I did his girlfriend while he was on the phone to her if that helps. Good luck to them I say, it’s an immoral and amoral tax and this thing should be at discretion of a family law judge or tribal chief.

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