Got money? Avoid child support by doing away with your income!

Family Law|August 8th 2017

It may seem paradoxical, but you can save money by doing away with your income. How is this possible? Welcome to the weird and wonderful world of child support maintenance.

I’ve written here previously about the recent report from the single parent charity Gingerbread that looked into the issue of child maintenance avoidance. The report examined the experiences of five receiving parents whose former partners were allowed to pay minimal maintenance or avoided it altogether, as a result of the child support system failing to take their true financial circumstances into account. As I mentioned in that post, one of the five parents was the mother in the case Green v Adams, in which Mr Justice Mostyn commented upon the ‘extraordinary state of affairs’, whereby it was possible for the father to be required to pay child maintenance of only £7 a week, despite the fact that he was a multi-millionaire.

The reason for the father paying so little was that he was essentially living off his capital, with very little income. The maintenance amount was calculated by reference to his income, hence he paid so little.

As Mr Justice Mostyn explained, prior to recent amendments to the child support legislation it had been possible for the recipient of child support to seek an upwards variation of the maintenance, on the basis that the non-resident parent (NRP) had assets. The way this would work was that the assets would be treated as generating a notional income, which would be included in the maintenance calculation. The government chose to do away with this ‘assets ground’ of variation, when it brought in the current, 2012, child support scheme.

The Green v Adams case returned before Mr Justice Mostyn the other day, and he had a few more things to say about the removal of the assets ground of variation. He pointed out that the Gingerbread report records how when the mother in the case took the matter up with the relevant Minister, she was told that compared to under the Child Support Agency, the scope of income which could now be captured by a possible variation had been widened to include almost all sources of gross income identified in the self-assessment process, and that this would “make it harder for wealthier individuals, with income from other sources, to avoid their responsibilities by minimising the amount of child maintenance they pay.” This, as Mr Justice Mostyn pointed out, was a non-sequitur, because the assets ground of variation was focussed on people who arrange their affairs so that they do not have any income but who rather live on their capital.

The report goes on to say that when pressed the Minister gave a second reply which was that “[the child maintenance scheme] does not attempt to provide a unique, bespoke solution in respect of the care of each child whose parents live apart, as it would be prohibitively expensive and time-consuming to do so.”

This, as Mr Justice Mostyn said, is dispiriting. He went on:

“The scheme should surely strive to provide a just solution in all cases; for the few as well as the many. Justice surely should not be sacrificed on the altar of managerial efficiency. Ease of administration surely does not furnish an objectively reasonable justification for a process that allows a multi-millionaire father to get away with paying child support for his son of a mere £7 per week.

The assets ground of variation reposed on the statute-book, to my knowledge, quite unremarkably for over 10 years, and was in fact successfully deployed in this case …. To empower a factfinder to determine if arrangements have been made to place assets in non-income-producing structures would not, on any view, be prohibitively expensive and time-consuming; but even if it were relatively expensive and time-consuming, why as a matter of justice should the exercise not be carried out? If the ground is not reinstated then I foresee more cases seeking singular awards of capital, such as the one which I have determined, coming before the family court. And the family court taking an ever more expansive view of what does constitute singular expenditure.”

Quite.

As it stands, we have a situation whereby a wealthy NRP can substantially reduce their child support liability, or avoid it altogether, simply by arranging their finances so that they have little or no income.

Now, I’m not of course genuinely suggesting anyone do away with their income merely to avoid paying child support, no matter how aggrieved they are at the prospect of paying money to the other parent. Apart from anything else, if they have significant capital then the amount of income they will be able to generate from it will surely exceed the amount of any child support liability by a considerable margin. Doing away with that income will only therefore amount to cutting off your own nose to spite your face, as my mother used to say.

Still, the fact remains that the situation whereby a multi-millionaire can get away with paying little or no child support is quite absurd, and an insult to the child. As Mr Justice Mostyn suggests, it surely wouldn’t cost that much to bring back the assets ground of variation, and even if it did, we owe it to that child to do so.

Mr Justice Mostyn’s latest judgment in Green v Adams can be found here, and the Gingerbread report to which he refers can be downloaded from this page (click on the ‘Children deserve more: challenging child maintenance avoidance’ link, and a drop-down will appear, with a link to the report).

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Comments(14)

  1. Paul says:

    To be fair the guy is just playing within the rules which are in place.
    Just like multimillion businesses like google. Living within the rules but wide open to critacism.
    Then you have women making false accusations of DV. Making no attempt to reach a reasonable child support and calling csa. Just living within the rules.
    No critasism aimed their way.
    Another sickening double standard.
    50/50 parenting. Do away with CSA. Equal contact equal expendature. No middle men. What could be easier.

  2. Paul says:

    You could argue here that the true great modern crime is accountancy or creative accounting. What else is the perpose of accounting if it is not to minimise expendature ?
    Make sure those with wealth do not pay their fair share.
    If you want to get biblical we could call these the ‘pharasees’.
    To what extent is child support designed to stop children been in poverty ? To what extent is it designed to keep the kids at same level of wealth as the NRP ? An too what extent is this a social punishment designed to flog fathers who are nolonger their ?
    A flat rate £20 – £30 per week would acheive elivating the child out of poverty and let the man get on with his life. If the woman wants more then she should be sure to be amicable and negociate it.
    Persueing a 15-20% deduction would seriously harm most fathers or anyone to be honest. It will seriously damage anyones prospects.

  3. Andrew says:

    The judge is wrong to suggest that a formulaic system – such as we are cursed with – should cover every possible combination of circumstances. It would be too difficult to write and the law of diminishing returns would set in.

  4. BillyO says:

    If the system is so unfair that it leaves a NRP without enough to live on who can blame them for legally playing the system. Life in the UK has always been about that.
    Whether it be in business and legally limiting ones tax liabilities or playing the system to reduce support payments it’s all the same.

  5. Adam curtis says:

    The fundamental floor is the way CSA calculates rates based on over night stays. So unfair. You could have you child 7 days a week feed them house them entertain them but If they do not physically sleep in your home you do not receive any relief on that.

  6. Janey Scott says:

    Sadly also the mother of my grand children decided she no longer wanted to be married to the father of her children, she met a man on social media, from Jamaica and told my son she no longer wanted him in her home. She dictated when he could see his children and he gave her maintenance for his children, he and I bought them clothes and other items, he had them overnight at weekends. He paid her and I gave her money to help her out, she (his ex) then went to government website and complained that he had not paid her a penny for two years. They did not believe him that an arrangement was in place. An attachment of earnings was placed on his salary. He had an accident at work and was not able to work. His ex wife divorced my son and married her new boyfriend and brought him to the UK from Jamaica after one visit to his home there. She kept the house and all the furniture and threw out my sons possessions. His ex wife also told the children they had a new father and promptly had another baby with her new husband. She then told my son that his children did not want to see him. He has no money and now no job. If he finds a job with his damaged wrist he will have an attachment of earnings and subsequent debt to pay. He can not afford to get legal help. I am sure he is not alone and he can not afford to live, he would be on the streets if I was not able to support him. I understand that there are many young and middle aged men who are caught in this situation and every case needs to be assessed differently.

  7. Michelle lawton says:

    The Maitenance system is a joke!
    My ex pays £32 per month for my 2 daughters. Used to pay £160. But when he abused them verbally and they stopped speaking to him he stopped paying. I contacted child maitenance. As he is on benefits £600 per month he only gets to pay £32. Although he didn’t declare he also gets a nhs payout every December of £60,000+ EVERY year due to an accident. Has a paid for house and enjoys expensive holidays every 3 months to the likes of. Dubai. Australia Florida. Just found out he is taking his new girlfriend to Cuba next month too. Infuriating as the pittance he pays doesn’t even pay for my girls to get to school and back on the bus for 2 days a week. £16 per week each for a 16 year old whilst he lives the life of Riley! He also has 2 other children whose mother he pays £180 per month too. But as he played the system with me and I done it legally we lost out

    • Mr T says:

      Give him contact and get on with your life instead of expecting to be ENTITLED to his money for what reason? If you cannot afford to support your children – give them to him let him financially provide for them.

      Instead of financially abusing your ex-partner because you can and you feel entitled to his money. Go get your own job and money? In the days of equality that seems fair and equal. Or am I being too selective in my opinion of the female entitlement?

      Unreal.

  8. wayne says:

    The system is just so unfair for both parties. The CMS and CSA before are constantly failing families and lives. I read recently that over 100 people (mainly fathers) have taken their own lives due to the way these government departments have caused so much misery and suffering. The whole separated parent issues are fuel by anger, hate and a need to cause pain and misery on the other parent, which is not what the system should be used as. The only way to be truly fair is for both parents to be means tested for affordability.

    • Matt says:

      I can believe they have taken there own lives, my ex wife decided to move from Kent to Northern Ireland which makes contact with my 2 children incredibly difficult and she doesn’t make it any easier either but expects me to pay a huge chunk of my wages to her whilst she lives with her new husband on benefits in there new house

      She left me with lots of debts which im now having to go through an IVA but the CMS dont give a dam about what i need to live on or what i need to pay as long as i pay her what they have decided and if i dont they will just take it directly from my wages and then charge me for the privilege

      Our eldest daughter lived with me up until she was 19 and all my ex wife had to pay me was £5 per week whilst i was paying her £150 per week how is this fair

      Im now living with a new partner who has two children and treat them like my own and all they give me is a reduction of £15 per week how is this fair

  9. Dave Fraser says:

    The only people that think the current arrangements are fair are some and I use the word some deliberately entitled women who decide that after all they want to be independent and free of a relationship and crusty narcissist judges.

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