New divorce rules create more financial knots: Sue Fieldman examines problems created by the Child Support Act

Sue Fieldman
Friday 20 August 1993 23:02 BST
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THE FINANCIAL side of divorce has always been a messy business, but it has recently been thrown into chaos by the new child maintenance support regime.

Clean-break agreements where the parties are made financially independent of each other are becoming increasingly rare.

Instead we are being thrown back to the days of complicated financial arrangements where the parties remain financially intertwined until the children grow up - the very scenario that creates so much bitterness and which the clean break was designed to prevent.

Contrary to popular belief, the Child Support Act, which came into effect at the beginning of April, is not confined to pursuing the runaway father of a single parent family, who live on state benefits.

From now on if you are getting divorced and you have children, regardless of whether you live in a castle or a council flat, the amount of maintenance you pay to your children will be worked out according to a set formula laid down by the Child Support Agency.

Peter Duckworth, a barrister who specialises in matrimonial finance, says: 'The message is clear; child maintenance has shifted into the public arena and there is nothing any court or private negotiation can do to stop it.'

In the formula there is an element of support for the carer parent, in other words financial provision for the wife. She has the right at any time to go to the agency to get a maintenance assessment. A wife using the vehicle of child support, in effect, can get increased maintenance for herself.

Mr Duckworth says: 'Quite simply, she has the opportunity to take a second bite of the cherry even after remarriage.

'In pre-1993 divorce settlements, it was common to see the matrimonial home transferred to a custodial wife in return for the dismissal of her maintenance rights - the archetypical clean break.

'Such a dismissal will be meaningless in the new era in as much as the wife has the right at any time to go to the agency and get a maintenance assessment which, in accordance with the formula, will include an element of her own support as the carer parent (pounds 44 per week in 1993-94).'

The prospect of a wife trotting to the agency for child maintenance at the drop of a hat is making husbands loath to agree a genuine final settlement.

Lawyers are having to dispense with the clean break and revert to increasingly tortuous financial arrangements. For greater justice between the parties, Mr Duckworth suggests there may have to be a return to the old- fashioned agreements where the husband keeps his half-share in the house on trust until the children are 18 or finish education and he makes suitable maintenance payments in the meantime.

Alternatively, the husband could put a deferred charge on the property that springs into effect if the wife goes to the agency.

There could well be an even more controversial answer. 'A nominal periodical payments order to the husband that is converted into substantive maintenance as a contra to any payments of pounds 44 received by the wife from the agency,' Mr Duckworth suggests.

All the alternatives are undoubtedly a backward step. On divorce the parties want to disentangle themselves financially from each other as soon as possible.

The Government urgently needs to look at this whole area again and rectify other defects in the formula; for example the agency takes no account of a payer's debts when making an assessment.

Peter Grose-Hodge, matrimonial partner with the solicitors Druces & Atlee, says: 'It also does not take into account the amount of school fees a father pays. The figure is completely ignored.

'Yet if the fees are for a boarding school, the father is in effect maintaining the child for two-thirds of the year'.

The formula also ignores the amount a parent pays out in child-minding costs. A mother could be earning pounds 300 a week and pay pounds 150 a week to a nanny. According to the maintenance formula her income is pounds 300, and the child minding costs cannot be deducted.

There is, therefore, a huge disincentive for a mother to go out to work, which antagonises many ex-husbands.

Mr Grose-Hodge says: 'If truth be told the formula was created for DSS cases. It has been extended into a much wider arena to include everyone, but there is no discretion to take into account special circumstances. This is what causes the huge injustices in the system.'

The Child Support Agency, tel: 0345 133 133, has a 70-page booklet explaining how it works.

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