Can Maintenance Payments Change Because of Coronavirus?
Coronavirus is making us look at every aspect of our lives, from how we socialise and exercise to how and where we work. With constant talk of hospital admission figures and mortality rates many of you are worried about raising your fears about coronavirus and financial concerns. However, whether you pay or receive either child maintenance or spousal maintenance , payments of maintenance may need to be reviewed and resolved. In this blog we look at child support, spousal maintenance and the impact of coronavirus.
Online family law and maintenance solicitors
Cheshire and Manchester based Evolve Family Law solicitors are working online to advise existing and new family law clients on all coronavirus related family law questions from child contact, help with leaving an abusive relationship during lockdown or the financial issues arising from Covid 19. If you need legal assistance call us or complete our online enquiry form to set up a video conference or telephone appointment.
Coronavirus and spousal maintenance and child support payments
When you agree to pay or to receive an amount in spousal maintenance or child support it is often assumed that the amount you are expected to pay, or that you will receive, won't change all that much . However, whether it is spousal maintenance or child support, the amount you pay or receive in financial support can be reviewed either upwards or downwards.
Many of you are very worried about coronavirus and your jobs or fear that your income from self-employment will reduce drastically (if not disappear altogether) over the next few months. Whilst the government has assured us all that financial help is at hand, for both the employed and the self-employed, there are reports that people are confused about the eligibility rules for government help and are worried about how they can pay spousal maintenance or child support now.
If you are the person who is receiving the maintenance payment it is equally worrying as many feel that they are in an impossible position, having taken out mortgages and financial commitments, on the basis of promised or ordered spousal maintenance or child support.
Spousal maintenance orders and Covid-19
Spousal maintenance is either paid on a voluntary basis between husband and wife or civil partner or under a spousal maintenance court order.
If you are paying or receiving spousal maintenance under a court order then the first thing that you should look at is the wording of the financial court order and the spousal maintenance clause. If you are in any doubt about the wording or meaning of the spousal maintenance clause then it is best to take legal advice.
There are a number of ways in which spousal maintenance court orders can require the payment of spousal maintenance, such as:
Joint lives spousal maintenance – spousal maintenance is payable until the death or the re-marriage of the person receiving the spousal maintenance payments
Time limited spousal maintenance – spousal maintenance is paid for a set period of time and then stops on a date specified in the court order. In some cases, the person receiving the spousal maintenance can apply to extend the length of time that spousal maintenance is paid for but they have to apply to court to extend the length of time that spousal maintenance is paid for prior to the expiry of the order. In other court orders the spousal maintenance is said to be time limited with no option to extend the length of time that it is paid for.
Can spousal maintenance orders be changed?
Spousal maintenance orders can be changed by court order or by agreement. If your financial circumstances have changed because of coronavirus and you are paying or receiving spousal maintenance the government is urging you to try to reach an agreement with your ex-partner over spousal maintenance.
Family law solicitors say that whilst it is important, if possible, to reach an agreement over changes in spousal maintenance payments any agreement should be temporary or a holding agreement until the Covid 19 position is clearer.
Every family situation is different so you may need specialist legal advice on what to do about spousal maintenance payments. Some payments may need to stop and others may need to reduce or increase. Here are two case examples:
A dentist is no longer able to work but because he has an employer who is continuing to pay him then the spousal maintenance can continue at the same rate for the time being. The spousal maintenance might need to reduce or stop if the employer is forced to stop the dentist’s salary or the salary is reduced to the cap set by the government coronavirus income scheme
A National Health Service consultant is not affected financially by Covid 19 but his ex-wife has lost her job in the travel industry. Depending on her circumstances her spousal maintenance may need to increase on a temporary basis until she can get another job. If her spousal maintenance is a time limited order she may need to ask the court to extend the period of the spousal maintenance court order.
Tips on how to change spousal maintenance payments by agreement
In these highly unusual times the focus is on working together. That is the message that the government is giving when it comes to sorting out the changes to child care , spousal maintenance or child support that are required because of coronavirus.
Tips on how to change spousal maintenance payments by agreement include:
Communicate with your ex either directly, through a trusted friend or your family solicitor. If you don’t tell your ex what is going on and be upfront about how Covid-19 has affected you financially then they will expect the spousal maintenance payments to continue
Provide paperwork – family law solicitors say there is often an element of mistrust between separated spouses and so if you want your ex-spouse to agree to a reduction in spousal maintenance you will need to provide the supporting paperwork to show that you have lost your job or that your hours have been reduced or a bonus scheme scrapped
Reflect on any discussions with your ex and don’t be rushed into making long term decisions. After all your ex-spouse may get a new job or the government scheme may mean that their income isn’t as badly affected as first thought. You should not agree to any major changes in the spousal maintenance order or agree to the cessation of payments and cancellation of the spousal maintenance order without first taking legal advice
Record your agreement – if you are able to reach a spousal maintenance agreement with your ex-spouse then you need to record the agreement in case one of you changes your mind. If there is no clear recorded agreement then your ex could apply to court to enforce the spousal maintenance order and ask for payment of arrears of spousal maintenance. They may not be successful in that court application if there is a clear agreement drawn up by you (or your solicitors) that spousal maintenance is being changed temporarily and the reasons why and when spousal maintenance will be reviewed again, for example, if the payer gets a new job or a government income subsidy
Understand the court options- it is important to know that if your ex-spouse won't agree to a reduction or temporary stopping of spousal maintenance what your legal options are. You could apply to court to vary the spousal maintenance order to reduce or stop the payments. Your ex-spouse could apply to court for payment of arrears of spousal maintenance and to enforce the spousal maintenance order. The court decision would be based on all the circumstances of your case and the ability of the paying person to pay spousal maintenance. If you are upfront with the paperwork relating to the change in income this may make a court application to formally vary the spousal maintenance order unnecessary.
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Can child maintenance be changed?
Covid-19 and the financial fallout and economic downturn will affect child support payments as well as spousal maintenance orders. In most families child support is either paid as a voluntary arrangement between you and your ex-partner or under a child maintenance service assessment. It is rare for there to be a child support court order as the court only has limited jurisdiction to make child support orders.
Again family law solicitors are recommending that parents talk to one another about child maintenance and to see whether the child support needs to be changed because of a change in the payer’s financial circumstances. If the payments are made under a child maintenance service assessment then you may need to ask the agency to carry out a new assessment.
Online family law and maintenance solicitors
Cheshire and Manchester based Evolve Family Law solicitors are here to answer all your family law questions whether it is a coronavirus related family law question, child contact, help with leaving an abusive relationship or financial issues arising from coronavirus. If you legal help call us or complete our online enquiry form to set up a video conference or telephone appointment.
Louise Halford
Apr 08, 2020
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8 minute read
How is Child Support Calculated?
Most separated and divorced parents find some of the child support service rules relating to the calculation of child maintenance incomprehensible. Child maintenance solicitors have to try to explain how child support is calculated without attempting to try to justify the rules or tribunal decisions.
Child maintenance and shared care
Nowadays, in the vast majority of family situations, if you separate or divorce and you have dependent children, the child maintenance service (rather than the family court) will have the jurisdiction to calculate how much child support should be paid and to enforce the assessment.
In order to try to keep child maintenance simple to calculate, some years ago the child maintenance service introduced a new child support formula. How much you pay in child maintenance is calculated as a percentage of your income. That sounds simple enough to most parents but then added child support rules start to creep in , such as if there is a shared or equal parenting arrangement with the children spending the same amount of time with each parent then no child maintenance is payable by either parent .
The rights and wrongs of the shared parenting rule and child maintenance is a moot point. Most child maintenance solicitors say it can produce both fair and unfair results. Take two scenarios:
Two parents equally share the care of the children and both earn roughly the same amount – no child maintenance is liable under child maintenance service rules, not because of the earnings of the mother and father are the same but because care of the children is shared;
Two parents equally share the care of the children. One is a high earner and the other barely scrapes by on their salary each month. No child maintenance is liable under child maintenance service rules as the parenting is shared. The parent who is on a lower income will not be able to ask for spousal maintenance to help address the income gap in the two households if they were in a cohabiting or unmarried relationship with their ex-partner.
Child maintenance and contact
It is not just shared parenting that can produce odd results with child maintenance service assessments. If a parent has overnight contact with their child, the amount they pay in child support under a child maintenance service assessment is reduced. The amount of the reduction depends on the extent of the overnight contact.
This child maintenance service rule can throw up some equally fair and unfair results, depending on whose perspective you look at child support from. Take two scenarios:
A mother is the main carer of the children. The father sees the children each night but cannot have the children overnight as he works shifts and his shift patterns mean that the children would have to get up too early. Although the mother earns twice as much as the father and despite his seeing the children each day, he is liable to pay the full child maintenance service assessment with no reduction for his daily contact as he does not have the children overnight;
A mother is the main carer of the children and the father has overnight contact on three nights a week. Although the mother still needs to pay her mortgage and pay for school clothes and holidays, the amount of her child support is reduced significantly because of the father’s overnight staying contact. The mother earns half the amount of the father. That scenario may seem unfair to the mother but imagine if the mother earnt double the father’s income. The father would still have to pay the same amount in child support and pay for his children’s upkeep on three nights a week. However, the father would pay nothing in child maintenance if care were shared equally. The difference a day makes in child contact can add up to hundreds of pounds a month in child maintenance.
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Child maintenance rules
The child maintenance scenarios are just a few examples of why child custody solicitors and child maintenance solicitors do not try to justify the child maintenance service rules.
The best advice , if you are splitting up from a partner and have children together , is to try and reach an agreement over who gets the house , who gets the pension and how the children are financially supported in one package so the fairness of the overall financial settlement can be looked at.
For information about child maintenance and contact and financial settlements please contact our expert children law solicitors today.
Appointments are available online or in Whitefield, Manchester and Cheshire.
Robin Charrot
Nov 18, 2019
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4 minute read
Are School Fees Covered By Child Support?
Many parents think that school fees are covered by child support. That is a reasonable assumption as, after all, if your child attends a private school then the school fees are part of the financial support that they need.
The types of family maintenance payments
Child support and family maintenance can be rather confusing as a parent can receive any of the following:
Child support through an assessment by the child maintenance service;
Child support through a top up child support court order – this order can only be applied for if the child maintenance service has carried out a maximum child maintenance service assessment;
Child support through a family court order to cover any additional costs a child with a disability may incur;
Payment of school fees through a court school fees order;
Maintenance paid to a parent, referred to as spousal maintenance ;
Maintenance payable to help support a child and a parent and therefore a combination of child support and spousal maintenance. Global maintenance is paid through a court order.
Are school fees covered by child support?
School fee payments are not included in any child support payments that are determined by the child maintenance service. If the court makes a child maintenance order the school fees will not be included in the maintenance amount.
When the child maintenance service calculates child maintenance , they use a strict mathematical formula. This formula does not consider the costs incurred in caring for the child, or school fees, but focuses on the income of the parent liable to pay child support.
If a child attends a fee paying school or a parent wants to enrol a child at a private school then either the school fees are paid:
On a voluntary basis by the separated parent ; or
An application is made to court for a school fees order.
Will a school fees order cover the full amount of the school fees?
The school fees order will not necessarily cover the full amount of the school fees. A parent could be ordered to pay all of the fees or to contribute towards the school fees.
The court will decide how much a parent should pay toward school fees based on both parent’s respective incomes and reasonable outgoings. The court will look at the affordability of school fees, taking into account the child support and any spousal maintenance payments that are payable as well as the payer’s other financial commitments, such as their mortgage payments.
What happens if a parent says they cannot afford to educate a child privately?
Prior to a separation or divorce, a child’s parents could have decided that it would be best for their child to be educated privately. Sometimes a parent will decide that they can no longer agree to their child going to a fee-paying school when the child reaches primary or secondary school age. Alternatively, a parent may say that the child should be withdrawn from their current private school and enrolled in state education.
If the parents of a child cannot agree on whether their child should go to a private school or be state educated either parent can apply to court for a specific issue order.
A specific issue order will state what school the child should attend. If the objection to private education is purely based on the affordability of the school fees then an application for a school fees order may be more appropriate.
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Can the court change a school fees order?
If the court makes a school fees order either parent can apply back to the court to vary the order, for example:
A parent ordered to pay all the school fees may say that he or she should only pay 50% of the fees now that the other parent has had a pay rise and is on a similar salary;
A parent ordered to pay all the school fees could apply to the court to terminate or stop the school fees order because of his or her suffering a reduction in income or an increase in their reasonable outgoings making the continued payment of school fees unaffordable.
The interplay between the child maintenance service, the court and child support, spousal maintenance and school fees orders can be tricky for parents to grapple with. It is always important that the topic of private education is raised early so that parental decisions can be taken jointly, or if parents cannot reach agreement, there is time to ask the court to make a specific issue order or school fees order before the start of the school term.
For legal help applying for a specific issue order, a school fees order or on any other aspect of children law please contact us
Louise Halford
Aug 02, 2019
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4 minute read
Do I Have To Pay Child Maintenance and The Mortgage?
As a Manchester divorce solicitor I get asked the question ‘do I have to pay child maintenance and the mortgage’ a lot. People want to know where they stand financially if they are contemplating a separation or divorce or are thinking about leaving the family home. Read on to find out.
We Are Manchester Divorce Solicitors
If you need legal advice about paying child support and the mortgage or need help with reaching a financial settlement then Manchester divorce solicitors at Evolve Family Law in Whitefield can help you. Contact us today.
Paying the mortgage and child support
The answer to the question ‘do I have to pay child maintenance and the mortgage’ all depends on your housing circumstances and financial position. Giving expert divorce solicitor advice depends on carrying out the right fact finding to give the correct legal answer. That is because resolving financial claims on separation or divorce is a bit like putting a jigsaw together, you can't look at one piece in isolation to the rest of the picture.
Questions on child support and the mortgage
To answer the question ‘do I have to pay child maintenance and the mortgage’ a Manchester divorce solicitor needs to know the answer to these sort of questions:
Do you own the family home either in your sole name or jointly with your ex-partner?
Are you married to your ex-partner or in a civil partnership or were you in a cohabiting relationship?
Are the children your biological children or your step children?
Are you named on the mortgage, either as a party to the mortgage document or as a guarantor to the mortgage?
Is any member of your family a guarantor to the mortgage?
Is there a cohabitation agreement or deed of trust or prenuptial agreement that sets out what should happen if you separate from your ex-partner in relation to who keeps the family home and who pays the outgoings and mortgage on the family home in the event of your separation?
Have you or your ex-partner left the family home already? If so, are you paying rent and what is the amount of the rent?
Is the mortgage an interest only mortgage or is it a repayment mortgage? Are there any linked endowment policies?
Are you already paying child maintenance under an assessment by the child maintenance service?
Are you already paying spousal maintenance to your estranged husband or wife on a voluntary basis or under a court order?
How much are the mortgage payments?
Would the mortgage company agree to a mortgage holiday without your credit rating being affected?
How much is your rent?
How much is your income and how much is your ex-partner’s income? What are your current financial commitments and essential expenditure?
You can see from this long list of questions that the answer to whether you should pay both child maintenance and the mortgage isn't always straight forward. The answer will depend on the status of your relationship, the way you own the family home and your financial situation.
Joint or sole ownership of the family home
If you are a joint or sole owner of the family home and your name is on the mortgage deed then if the mortgage isn't paid then this could affect your credit rating. That applies whether or not you are living at the family home or have moved out.
When you decide to separate or divorce it is important to maintain your credit rating as the mortgage company may not agree to the mortgage on a jointly owned family home being transferred out of joint names into one partner’s name if there are or have been mortgage arrears. Equally if you can't get the family home transferred into your ex-partner’s name and your name released from the mortgage then you may find that you can't get another mortgage company to offer you a new mortgage to buy a new property.
The long term implications of souring your credit rating mean that it is essential that both you and your ex-partner think about the potential long term consequences of not agreeing who will pay the mortgage on the family home.
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Rules on child support and paying the mortgage
If you are paying child support under a child maintenance service assessment you may think that your child support payments should cover the cost of the mortgage on the family home as well as gas, electricity, food for the children and their clothes.
The answer depends on a number of factors:
If you aren't married to the child’s parent and the family home is owned in their sole name (rather than in joint names or your name) then all you are legally obliged to pay is the child support amount. With most legal answers from a Manchester divorce solicitor there is a caveat; if you are a high earner your ex-partner could apply for top up child support from the court or they could apply to court on behalf of the child for housing help.
If you are married to the child's parent and the family home is owned in their sole name (rather than in joint names or your name) then if the child support payments aren't enough to cover the mortgage payments and other household bills then your spouse or ex-spouse could apply to court for spousal maintenance . This type of maintenance can be paid on a short or long term basis. To make a decision on whether spousal maintenance should be paid the court would look at both of your incomes and reasonable outgoings and your respective needs.
If you are paying child support for your child under a child maintenance service assessment but you are also paying the mortgage on the family home that you used to live in with your ex-partner then provided that your ex and the child are still living at the family home you can ask the child maintenance service to carry out a special expenses variation to reduce the amount of your child maintenance service assessment. The variation application will only work if you don't have any legal or beneficial interest in the property.
What are my next steps?
I have only touched on a few potential scenarios and answers to the question ‘do I have to pay child maintenance as well as the mortgage‘. It just isn't possible to give an expert answer to ‘do I have to pay child maintenance as well as the mortgage’ without all the relevant facts relating to your personal and financial circumstances.
When you are looking at sorting out your finances after a separation or divorce it pays to take expert legal advice from Manchester divorce solicitors as I have often found that people either pay too much in financial support (resulting in their ex-partner being unwilling to move on and sell the family home) or too little (resulting in court applications for spousal maintenance and contested financial claims).
Taking expert legal advice from a Manchester divorce solicitor will help you get the balance right in deciding whether you should pay both child support and the mortgage.
Robin Charrot
Nov 22, 2018
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6 minute read
What Does Child Maintenance Cover?
Many are unsure as to what child maintenance covers; it is defined by the government as being the ‘financial support towards your child’s everyday living costs when you’ve separated from the other parent’. Should you have a good relationship with the other parent, you may be able to privately agree a ‘family-based arrangement’ between yourselves. If this is not possible, you will need to get the Child Maintenance Service involved.
We Are Manchester Child Support Solicitors
If you are worried about paying or receiving child support or need help with reaching a financial settlement after your separation or divorce then the Manchester divorce and child support solicitors at Evolve Family Law in Whitefield can help you. Contact us today.
Child support and shared care of the children
If you have a shared parenting arrangement (the child spends the same number of nights with each parent), neither of you is obliged to pay child maintenance, even if one parent has a higher income or fewer outgoings. Have a look at our blog who pays child maintenance when you share custody for more information.
What does child maintenance cover?
At its simplest, child maintenance is about providing your child with the food, clothes and home that they need to thrive and enjoy the best possible start in life.
Ultimately, it is up to the parent with primary care responsibilities as to how the money is spent. Child support is the legal minimum that a parent must contribute to the upbringing of their child, although they can certainly pay more should they wish.
Grounds to challenge a child support assessment
There are four grounds to apply for variation of child maintenance payments which are:
Assets over £65,000;
Income not taken into account;
Diversion of income;
Lifestyle inconsistent with declared income
You can read more about challenging child support in our blog ‘How To Vary Child Maintenance Payments‘.
Who is a child for child support?
Child maintenance covers a child under the age of 16, and those aged 16-19 who are in full-time education and have never been married or in a civil partnership.
What is not covered by child support?
As part of any child maintenance obligations under Child Maintenance Service rules, a parent is not expected to financially support any step-children. Nor is a parent obliged to contribute to private school fees. If these are a concern, the court can intervene separately if a court application is made by a parent as those decisions will not fall under the umbrella of child maintenance. When there are financial constraints, child maintenance will always be prioritised over school fees.
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How is child maintenance calculated?
When a family based-agreement cannot be reached, it is up to the Child Maintenance Service to determine the size of child support payment. The agency does so by following a set method and mathematical formula.
HMRC will provide the Child Maintenance Service with the paying parent’s gross income and establish whether or not they are receiving any benefits. Any pensin scheme payments are also taken into account. Additional considerations include whether or not the paying parent needs to financially support any other children, and how many nights the child is expected to spend with them. This information then affects the rate applied to give the final payment. This assessed child maintenance figure is broken down into a weekly amount.
Should the paying parent’s gross income exceed £156,000, the court can order additional child maintenance to be paid in accordance with the child’s needs.
Online calculators are available which use the CMS methodology to provide you with a rough indication of the required amount of child maintenance.
What is the Child Maintenance Service?
The Child Maintenance Service is a government agency who oversees the payment of child maintenance, assessing how much an individual needs to pay and enforcing that decision if they don’t meet their payments. The agency reviews the level of payment on an annual basis and whenever they’re notified about a significant change in the paying parent’s circumstances.
The Child Maintenance Service can also assist with locating an absent parent and has procedures in place where parentage is disputed.
Robin Charrot
Oct 23, 2018
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4 minute read
How To Change Child Maintenance Payments
In an ideal world, parents will agree on an the appropriate amount of child maintenance using the child support agency calculation prepared by their divorce solicitor or the online calculator on the child support agency website. Many parents use the child maintenance figures as a rough guide as to how much child maintenance should be paid recognising ,for example, that if one parent agrees to pay for all the children’s clothes, haircuts and school trips then expecting them to pay the full amount of a child maintenance calculation may not be appropriate. In other family situations a parent will recognise that it is fair that he or she pays a bit more than the child maintenance calculation to help pay for extras such as ballet or riding lessons. Child maintenance payments should be reconsidered if incomes and parenting arrangements change.
Sadly we don’t all live in an ideal world and some parents have to apply to the child support agency for an assessment of how much child maintenance should be paid. That is either because they can't reach an agreement on how much child support should be paid or payments aren’t being made.
What is child maintenance based on?
As a divorce solicitor I have heard parents express shock at the amount of a child support agency child maintenance assessment. Sometimes that is because the parent hasn’t appreciated that child maintenance is based on:
The payer’s gross income;
The number of children that the payer pays child maintenance for;
The number of overnight contact visits the payer has with the children;
The number of other children living in the payer’s household.
When calculating child maintenance the children’s needs and the payee and payer’s household bills aren’t taken into account in the child support agency calculation.
On other occasions the shock at the child support agency child maintenance figure is based on a parent’s knowledge of their partner’s income and lifestyle. If a parent doesn’t think that a child support agency child maintenance assessment is right then they should consider:
Asking the child support agency for a revision or mandatory reconsideration if they think the child support agency got something wrong such as the payer’s income or the number of overnight contact visits;
Asking the child support agency for a variation;
Appealing against the child support agency assessment;
If parents are or were married (and there is no financial clean break order in place) applying to court for spousal maintenance. This may be an option if the amount of the child support agency child maintenance payments combined with the household’s other income or potential earnings won't meet basic needs and bills.
Grounds to vary a child support agency child maintenance calculation
There are four potential grounds to apply for a variation of a child support agency child maintenance assessment:
Assets over £65,000 – the payer’s home isn’t treated as an asset. The value of investments , savings and any equity in a second home would be relevant;
Income not taken into account – usually this ground is used if a payer can set their own income because they are a company director and can declare dividends or use a directors loan account to fund their outgoings;
Diversion of income – this ground can be relevant where a payer owns their own company and employs a new partner or family members at an inflated salary in order to divert their own income;
Lifestyle inconsistent with declared income – this ground can be relevant if , for example, an income of £30,000 has been declared but the payer’s mortgage payments alone are believed to amount to £24,000 per year. This ground won't work if the payer is financing his lifestyle from gifts from his parents or on credit cards.
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Do I need legal advice to apply for a change to child maintenance?
You don’t have to get legal advice from a divorce solicitor in order to apply for a child support agency variation but sometimes it helps to take advice on your options. It is important that you take legal advice if you haven’t reached a financial settlement with your ex-spouse or you have an ongoing spousal maintenance order. That is because there are potentially court based spousal maintenance options and other types of court order that may encourage the payer to start making reasonable child support payments. Court options can be used in combination with a variation application to the child support agency or as a stand-alone application.
If you need legal assistance with a change to child maintenance please contact us today,
Robin Charrot
Oct 15, 2018
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4 minute read
Gambling Income & Child Support
The Child Maintenance Service, the government organisation tasked with assessing and administering the statutory child support regime, frequently gets bad press for its bureaucracy and the intricacy of its rules and regulations surrounding the payment and enforcement of child support.
A recent Court decision has hit the headlines because the Court of Appeal has said that a father’s sole source of income can't be classed as earnings upon which to calculate how much child support should be paid. The first two child support tribunals took the approach that if someone lives off an income then it can be viewed as ‘’income’’ but on an appeal by the father and by the Secretary of State for Work and Pensions the Court of Appeal disagreed.
You may question when income isn’t ‘’income’’ but the Court of Appeal decided that income for child support purposes should be considered in light of rulings on what is classed as income for tax purposes.
In this family, the father derived his entire income from professional gambling, namely bets on the horses and cards. Under income tax rules and regulations earnings from gambling are not treated as self-employed taxable income even if they are a person’s only source of financial support. The Court ruled that the definition of earnings to assess liability for child support is the same as assessing eligibility for welfare benefits or liability to pay income tax.
The Court ruling may make logical sense to the Department of Work and Pensions but where does it leave the parent who requires child support for their children when the other parent is earning a living from gambling or another non-taxed source?
Critics have long argued that assessing child support using a statutory rigid scheme leads to these types of anomalies and that these situations were avoided when the Court had the power to order child maintenance based on what a judge thought was the right amount to meet the child’s needs.
With any process there are always winners and losers and for some the Child Maintenance Service has simplified the child support process and made the collection of child support more straightforward, taking the worry out of relying on an ex-partner for child maintenance. For others, particularly where their former partner or spouse is self-employed or lives a lifestyle that doesn’t seem consistent with their taxable income the child support regime and government agency has made life more complicated than relying on the old Court system for assessing child support.
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You may think that there are very few professional gamblers so the Court of Appeal decision won't affect many children. However the rules do apply to other scenarios such as the investor living off capital gains rather than dividend income or the more common situation of a self-employed person’s reported income not appearing to reflect the reality of their daily expenditure.
As a children lawyer this case emphasises the importance of getting expert legal advice when parents separate and to not sort out financial matters on a piecemeal basis. Often a husband or wife will want to agree on a split of the proceeds of sale of their house so that they can each rehouse themselves leaving issues such as spousal maintenance or child support to be agreed later on. That can lead one parent as the financial winner and the other as the financial loser if, as a result of the child support rules and regulations, the child support payments are assessed at a lot lower figure than was anticipated when committing to the new house. As frustrating as it is to wait and sort out all financial matters together the gamble of dealing with child support in isolation just isn’t worth it.
For joined up advice on children law and child support please call me on +44 (0) 1477 464020 or email me at louise@evolvefamilylaw.co.uk
Louise Halford
Mar 26, 2018
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4 minute read
Enforcing Family Court Orders
Pilot faces a £600,000 payment and a freezing order after losing his Court battle over the enforcement of a family Court order.
Whenever a divorcing couple end up in Court with a family judge making the decision on how their assets should be divided or how much spousal maintenance and child support should be paid there is always a risk that either the husband or wife or both of them may be very unhappy with the outcome of the Court proceedings and their Court Order.
The dissatisfaction with a family Court judgement and financial order can lead to appeals against the decision or to orders being deliberately flouted in the hope that an ex-husband or wife won't want to launch further Court proceedings to enforce the original financial Court order.
Sometimes financial Court proceedings can take on a life of their own. The media has recently highlighted the case of Richard Wilmot and his ex-wife Viki Maughan who have been engaged in a 16 year battle over payment of child support, with paternity of the youngest child being in dispute despite DNA testing.
The Court has ruled that just shy of £600,000 should be paid to the ex-wife, consisting of child support arrears and legal costs. Importantly the Court has also made a freezing order freezing property, money in bank accounts as well as pension and insurance monies.
The Court decision to freeze assets shows just how far family judges are prepared to go to make sure that Court orders are complied with.
A read of the Court judgement emphasises just how exasperated the judge was by the ‘’utter folly’’ of the ex-husband’s actions resulting in him being ordered to pay nearly £600,000 when the child support arrears only amounted to about £115,000 with the rest of the monies being legal costs and the costs of specialists employed by the ex-wife to trace and recover the money.
The case highlights the financial and emotional costs of engaging in a long drawn out Court battle but, perhaps more importantly, shows the long arm of the law, in this case over a 16 year period to enforce the payment of child support .
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In my view this unhappy Court saga reveals why it is so vital to try and reach an out of Court financial settlement that both an ex-husband and ex-wife can live with to avoid enforcement Court litigation and costs. That isn’t always possible. If a financial Court order has to be made by a judge it is important to take legal advice on appeal options and, if necessary, enforcement options to avoid the costs of the Court proceedings getting out of hand and ultimately, as in the case of Mr Wilmot, dwarfing the amount in dispute between husband and wife.
If you need help with the terms of a financial settlement or a Court order please contact us.
Robin Charrot
Mar 19, 2018
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3 minute read
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