Advanced search

Legal loophole allows wealthy fathers to pay nothing for their children.

(20 Posts)
user1484648446 Tue 17-Jan-17 10:33:46

Legal loophole allows wealthy fathers to pay nothing for their children.

I know from lurking on forums that there are very many women as frustrated, disappointed and angry as I am with the child maintenance situation and I am keeping everything crossed that the MumsNet army will sign my petition and force the government to take a closer look....

The Child Maintenance Service no longer looks at assets or wealth outside of salary therefore individuals paid via dividends or from international income streams are outside of its jurisdiction, leaving millionaires legally entitled to absolve themselves of financial contributions towards their children.

For frustrated mothers the fact that such transparent 'income modification' is legally sanctioned is as distressing as the pressure left on them to cope financially.

Lawyers are well aware of the need for change, so why hasn't it happened? Because case law sets precedents and the financial disparity that can arise between separated parents at home is exposed in the courtroom where the wealthy parent with the better lawyer keeps on 'winning'.

Mothers questing for justice are at the mercy of UK law and things have gone from bad to worse since a case led to Judges not applying Schedule 1 of the Children's Act until a tribunal hearing via the CMS has been reached and won; seemingly impossible to do when the CMS don't look at wealth outside of salary. In any case evidencing wealth to get to tribunal stage (either on or off salary) requires documents and financial data that would breach the wealthy parent's privacy.

Essentially mothers battling the system for child support from wealthy fathers who fund their lifestyles outside of salary are being told that their battle is with the moral fibre of their ex and not their exes finances.

The CMS and Schedule 1 of the Children's Act were intended to protect children yet wealth disparity and neglectful intent has left both wide open to corruption meaning these laws and institutions now serve the wealthy to allow legal abandonment of children.

With co-habitation on the rise the assumption is the law will change to reflect the un-married mother's need for financial protection. However, given that the women who most urgently need the law to change are likely to be juggling work, childcare and lengthy frustrating calls to the CMS they are unlikely to have the time or money to make it happen.

Leading London Law Firm Vardags note that;

‘The CMS is a blunt instrument, at best difficult to navigate, at worst, impenetrable. Five different pieces of dense legislation and regulations set out the pathway to child maintenance, administrated by a computerised system, which does not adapt to nuanced personal circumstances.

In this global age where “super earners” are increasingly ingenious in the ways in which they manage their finances and hold their assets, the CMS offers a woefully unsophisticated system that continues to fail the most vulnerable, leaving a significant band of children penalised due to the disparity of wealth between their parents. These are not parents who are impoverished, quite the opposite. These are parents who are able to arrange their wealth to fall outside of the unyielding CMS criteria, circumventing their responsibilities to their children. Some non-resident parents are manipulating the system by setting up business structures and income streams to defeat the stringent rules, because they are armed with the best legal advice money can buy and use the system’s inherent rigidity to their advantage. I believe that such action is morally reprehensible and needs to be met with a strong and easily accessible system that seeks to protect the child rather than the current series of loopholes available to the financially dominant party.

The decision to end the CMS’s ability to look behind the UK tax returns and to consider the global lifestyle of the paying parent has shut down the only avenue of attack which can be easily demonstrated and views a parent’s financial circumstances more broadly. Unless the paying parent earns an income in excess of £156,000, which leads to a maximum assessment by the CMS, the courts have no jurisdiction to intervene and take account of the wider picture of wealth. This is an area of law crying out for change; the system is being manipulated and, in many cases, is failing to protect those children it was set up to help.’

I have experienced first hand the shortfall in the law with regards maintenance for my older children and it has also impacted my husband who is legally obliged to pick up the financial slack for his step-children. I am delighted that Vardags are supporting my campaign and petition for change. I hope that this platform gives women like me a chance to be heard in a system that currently makes us feel silent and weak; crucially I hope that it gives us and our children hope for a fairer financial future.

Please sign and share away!

MrsHathaway Tue 17-Jan-17 10:40:56

Presumably this also applies to the not super rich but self employed? That seems to be a recurrent theme on Relationships.

Why is your husband "legally obliged to pick up the financial slack"?

user1484648446 Tue 17-Jan-17 10:57:31

You are right, it applies to self employed too... the CMS is a flawed system and one which is failing the very children it is designed to protect at all levels of the financial spectrum.

Polly Toynbee's article highlights the need for it to be looked at for all children, not just those with wealthy Fathers;

With regard Step Fathers; while biological Fathers are able to legally avoid maintenance Step Fathers who treat step children as their own are by default legally required to financially contribute to their upkeep while not automatically being awarded Parental Responsibility. This means they have a financial commitment but no say in pivotal decisions relating to their upbringing while biological fathers can retain PR and pay nothing!

MrsHathaway Tue 17-Jan-17 11:26:37

Step Fathers who treat step children as their own are by default legally required to financially contribute to their upkeep while not automatically being awarded Parental Responsibility.

I still don't know what you mean here. The resident parent has financial responsibility for the children. A married step parent would be legally assumed to be sharing income (etc) with the resident parent but I think refusing to do so would be a matter of financial abuse of the spouse (RP) rather than directly of the stepchildren, wouldn't it?

I agree that step parents do generally take on part of the financial responsibility for the everyday expenses of the children but I haven't heard of any strict legal responsibility.

throwingpebbles Tue 17-Jan-17 11:30:49

CMS don't look at dividend income by default (which is ridiculous if you ask me!). But as soon as I told them he earnt most of his income in dividends they got the relevant information from HMRC and assessed him on that basis

It is astonishing that they don't get that information as standard though! But please tell me they do still take it into account once they are told to?!

PostTruthEra Tue 17-Jan-17 11:35:48

It also allows wealthy mothers to not pay as well. I think you need to change the wording to 'parents'. hmm

user1484648446 Tue 17-Jan-17 11:49:31

This might explain the stap father situation better than I did Mrs Hathaway... x

user1484648446 Tue 17-Jan-17 11:52:39

PostTruthEra you are quite right - it does allow wealthy mothers to avoid paying too, though in the majority of cases the mother is the Resident Parent with maintenance sought from the father. CMS needs to be changed to protect the children in either case x

MrsHathaway Tue 17-Jan-17 12:01:01

Ah ok I'm with you - although that only seems to cover situations where the stepparent has split from the resident parent. I thought you were talking about situations where the resident parent, step parent and children in question were all living together. Sorry for the confusion.

user1484648446 Tue 17-Jan-17 12:02:29

throwing pebbles I absolutely agree, it is ridiculous that salary is the only 'default' income looked at. My understanding is that provided they are UK based then dividends etc are taken in to account but the 'fun' is how variable they can be from year to year and how open to manipulation they are. Once money is moved outside of the UK then they have no power to help you... the system is so, so broken!

MrsHathaway Tue 17-Jan-17 12:02:33

And yes it's absurd that the children's natural father who is a billionaire could be liable for no maintenance while the ex-stepfather would get stung for 15% as a result of having been a decent human being during his marriage to the children's mother.

user1484648446 Tue 17-Jan-17 12:09:18

Exactly Mrs Hathaway! Currently though that situation is a moral one with no legal repercussions should the wealthy parent decide to act in that way... Every lawyer I have spoken too says the law needs to change, and that is what I am trying to do! x

throwingpebbles Tue 17-Jan-17 12:28:00

I totally agree the law needs to change. I nearly fell of my chair when CMS said they don't routinely get all earnings from HMRC, just PAYE. Luckily I knew what exH income was that year (as we were still together then) so I knew it was wildly out!!

user1484648446 Tue 17-Jan-17 12:47:34

throwingpebbles it is ludicrous isn't it! The onus should not be on resident parents to be some sort of financial detective. And why they don't factor in salary above £156k makes no sense either.

Pandamanda3 Tue 17-Jan-17 13:04:00

I'm with you op!
Having been stung by this myself! Ex hun lives life of Riley whilst putting pitiful wage through, dividends and other financial manipulations means he stays wealthy in private on paper oh gosh the poor man is on such a low income.

Iv been left struggling with poor cms award and it is beyond frustrating to know and see ex being far from poor!
In the business I built 'now he has it all, me & dc's left to struggle on, he openly laughs and admits how he's ducked the system and only pays pittance 'the law is an arce, it's done nothing for my dc's not protected there rights or needs at all

I will sign now & share share share

user1484648446 Tue 17-Jan-17 13:10:42

Pandamanda3 I am so sorry you are in a similar position but so grateful to have your support. Apparently there used to be a 'lifestyle inconsistent with income declared' element to CMS but not any more. x

Pandamanda3 Tue 17-Jan-17 13:23:29

No not anymore your right!
My ex as an example: large company lots of employees huge turnover but claims he only earns £18k a year, however during divorce it was proven that his annual spend on lifestyle and bills was in excess of 30k it clearly did not add up he has managed to live off his business only putting forward this stupid income

The court cms did nothing, and the sad part is it costs thousands to take it all the way to final hearing were only then could it be fully investigated and a forensic accountants report sought. I didn't get that chance as Id built up huge debt just to fight for a roof over our head and so could proceed to fight it.

Cms were not at all interested in his additional lifestyle just the minimal wage he stated.

Just an example, I was also forced to agree not to go back to cms for recalculation in future years a clause the court agreed to.
So now when he puts his salary up & takes less dividend there's nothing I can do!
3 weeks after it was signed & agreed he went out & bought a £56,000 merc brand new, took 2 weeks skiing holiday, then came home to his new apartment he just bought on 18k a year?? ?????
He gives dc's £40 week

user1484648446 Tue 17-Jan-17 13:43:18

I wish I was more surprised Pandamanda3! Current attitude of the courts is that marriage/ divorce warrant more financial commitment and disclosure than children! I have 28 signatures so far, 9,972 to go! Surely Mighty MumsNet can get us there?? x

user1484648446 Tue 17-Jan-17 14:13:41

Here is the link... x

Pandamanda3 Tue 17-Jan-17 14:51:48

Signed 😀 30 signatures now!

Join the discussion

Registering is free, easy, and means you can join in the discussion, watch threads, get discounts, win prizes and lots more.

Register now »

Already registered? Log in with: