Some rich fathers ‘are paying too little in child support’

Published: 13 October 2017

Category: News

A leading judge has called for reforms to prevent rich fathers manipulating their finances to reduce the amount they pay towards their children’s upbringing.

The call follows a change in the law in 2012 that means maintenance payments are based only on actual income. This means that if a parent wants to pay as little as possible, they can structure their finances so they are wealthy in terms of property or other assets but poor in terms of income.

The issue was highlighted in a case where a multi-millionaire only had to pay £7 a week to support his 16-year-old son because, although he had £5m in assets, he only had a modest salary.

Giving judgment in the case, Mr Justice Mostyn said: "For reasons which I cannot fathom the "assets" ground of variation has been removed from this latest regime. 

"Therefore, it is possible, as in this case, for a father to live on his capital, which may be very substantial indeed, and to pay no child support at all." 

He called on the government to change the law back to prevent any abuses. Otherwise, courts may start awarding higher lump sums to the wives of estranged husbands who refuse to pay reasonable support.

In a ruling on a second case he said: "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."

Many legal experts agree that the courts are likely to use their discretion to award higher lump sums in cases where one partner manipulates their assets to avoid or reduce child support payments.

So far, the government has given no indication that it intends to revert to the previous system.

Please contact Claire Rutter in our Family Team if you would like more information about the issues raised in this article or any aspect of family law.