Assets but no variation

Child support, departures for the formula, and best interests of children

The child support scheme became operative for the first time 25 years ago (3 April 1993). It is difficult to imagine a more cumbersome administrative set up to be inflicted on family proceedings – described in submissions to the House of Lords by Nicholas Mostyn QC, and with justification, as a Behemoth (Smith v Secretary of State for Work and Pensions & Anor [2006] UKHL 35, [2006] 2 FCR 487, [2007] 1 FLR 166). Time has done little to improve the absurdities the scheme throws up. Daily you can read cases in the Upper Tribunal (mostly the final appeal arbiter for child support cases) of cumbersome administrative exercises the judges must do to make the infinity of family situations fit a formulaic approach. And this post concludes with another absurdity explained by the said Mostyn QC, now Mostyn J.

Child support maintenance began by being defined according to the income of a child’s parents with deductions of housing costs and making a few other allowances. Within a couple of years of introduction of the scheme it was realised that there were features – pointing in both parents’ directions – which made a ‘departure’ from the formulaic approach desirable (Child Support Act 1995).

‘Absent parents’ could claim ‘special expenses’ such as travelling to work, costs of maintaining contact, costs of illness of a dependant; whilst ‘parents with care’ could claim an improved rate of maintenance if the non-resident parent (as they were re-named later) had the ability to control income (and had done so to reduce his income) or his lifestyle was in excess of declared income. A third source of income was, as described by the amended Child Support Act 1991, Sch 4B para 5 (power for the Secretary of State power to make regulations to set up these departure directions – or variations as they now are) provided for a departures ‘where (a) assets which do not produce an income are capable’ of doing so. That was reproduced in Child Support (Variation) Regulations 2000, reg 18.

‘Assets but no income’

In 2013 the child support scheme underwent a fourth set of major reforms (under Child Maintenance and Other Payments Act 2008) and for reasons which are not explained, the Secretary of State decided to scrap reg 18. Why did the Secretary of State decide to take away what parliament plainly intended should be part of the scheme? ‘Assets’ like this is an easy concept to understand. If a parent chooses to invest in capital or other assets which gives that parent no income (valuable paintings, freehold property which is not rented, an expensive boat), then why should that parent’s child loose out from the plain wealth of the child support paying parent?

This unexplained change in child support law came before Mostyn J in Green v Adams [2017] EWFC 24. The child concerned is now 16. His parents separated in 2002; and since a year later the mother (G) and father (A) had been involved in protracted litigation following the end of their relationship (and litigation of a type which a scheme like child support only can permit – even encourage). In 2013, G commenced a capital claim against A, which ultimately focused on G’s application for capital provision, in the total sum of £20,600 (mostly a car) under Children Act 1989, Sch 1 para 4(1) (sic) (Mostyn J is determined that it is para 4, here. He has been asked. It is clear that the provision he made was under para 5 (expenses made in maintaining the child).

Against a gale of misinformation – as Mostyn J found – from A and his McKenzie Friend Mostyn J said that the application should be granted. The claim was plainly proportionate. The father had ‘in his sphere’ over £5 million.

‘An extraordinary state of affairs’

‘Finally’ said the judge – who in his early practising career had extensive child support practice – ‘I am constrained to mention an extraordinary state of affairs arising from recent amendments to the child support legislation’; and so he came on to the fact that a man worth £5 million but with only sufficient income to pay maintenance of £7 pw for his son, could now regard his capital – his ‘assets’ not producing an income, as beyond the reach of assessment for child support. The assets are therefore ignored by the child support administrators when it comes to assessing that child’s income. A was only able to seek payment from the assets because she came within Children Act 1989, Sch 1 para 5.

Mostyn J continued:

'[2] …. 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. The father was only required to pay the pitiful minimum sum of £7 a week from the early part of this year because it was then that he received his state pension. In my opinion the government needs to consider urgently the reinstatement of the ‘assets’ ground of variation.'

And here is the challenge for a family lawyer with a judicial review practice. The original 1995 Act, now Sch 4B, para 5 makes it clear that Parliament intended that a reg 18 variation should be there. Is it not time for a parent with care, for herself and her child, to say to the Secretary of State: look at what Mostyn J says; look at what the 1995 legislation says; and if so is it reasonable, having the best interests of this child, and of children generally, in mind for you to deny Parliament’s intent?

David Burrows is the author of Children's Views and Evidence and Privilege, Privacy and Confidentiality in Family Proceedings. 

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