The Taylor&Emmet Blog

Child Support: The “low income, capital rich” non-resident parent

Child SupportThe Child Maintenance Service has recently been criticised by a Senior High Court Judge Mr Justice Mostyn for enabling a multi-millionaire father to pay just £7 per week child support.

The Child Maintenance Service (CMS) was introduced in November 2013 and over the past few years has gradually taken over the functions of the much criticised Child Support Agency (CSA). Child Maintenance is calculated using a statutory formula which the government deems is the correct amount a non-resident parent should pay towards a child’s day to day living costs.

The problem with a formula is that one size does not necessarily fit all scenarios.

Green v Adams 2017

In the case of Green v Adams the father owned property worth over £5 million. However, his income for a few months in 2017 comprised just his State Pension which meant he had to pay just £7 per week.

The CMS and its predecessor the CSA use income as the basis for the calculation of child maintenance.  Where there are significant capital assets the system becomes complicated. Under the old CSA rules the parent with care of the child could apply for an “assets variation” through the child support tribunal system. This variation allowed the tribunal to “deem” an income of 8% of the value of capital assets which would then be used to calculate the child support figure.

Since the Child Maintenance Service took over from the CSA the “assets variation” application is no longer available. Effectively, this means that a parent can avoid paying child maintenance if they are capital rich but income poor.

Mr Justice Mostyn was clearly unimpressed by the father in this case calling lack of financial support for his son as “little short of scandalous”. In respect of the removal of the “assets variation” which came into force in November 2013 the judge said that the government need to consider its reinstatement “urgently”.

The case came before the High Court as the mother had applied for financial orders under the Children Act 1989 schedule 1. Often, these applications are made by an unmarried parent seeking an order that the other parent provides a home for a child during their minority. The court can also order a non-resident parent to provide a lump sum or sums and a car.

The type of orders the court makes in these types of proceedings are of a capital nature. The family court does not have jurisdiction to order child maintenance unless the non-resident parent’s income is more than CMS maximum of £3000 gross per week. The court can make a “top up” child maintenance order only after an assessment has been carried out by the CMS. In the Green v Adams  case, the father’s income was so low that the court could simply not deal with child maintenance.

The current state of the law allows a determined non-resident parent to avoid child maintenance even if they have significant capital; a state of affairs described by Mr Justice Mostyn as “most disturbing”.

Lucy Rodgers
Lucy Rodgers

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