Divorced father challenges home agreement: Test case on 'clean-break settlement' involving house could cut bills for thousands of parents facing bigger maintenance payments set by Child Support Agency. Rosie Waterhouse reports

A TEST case that could bring financial relief to thousands of divorced or separated fathers facing huge increases in maintenance payments is to be heard this week.

A ruling could open the way for divorced parents to get out of previous court orders or 'clean-break settlements', such as when the former partner is given the house in exchange for low or no child maintenance contributions from the absent parent - usually the father.

The action is being brought because in reassessing maintenance payments, the Child Support Agency (CSA) fails to take such settlements into account, whether agreed privately between the partners or set by a court.

In the case at the High Court in Liverpool on Tuesday, a divorced father is applying for the maintenance arrangement set by a previous court order to be changed to take account of his new financial circumstances since the CSA, which was set up in April, reassessed the maintenance payment and ordered him to pay far more. Under the court agreement, he gave his ex-wife the marital home. He is asking the court to overturn that agreement so his ex-wife would have to sell the home and give back half the equity or find the money to pay his half-share.

If he wins, thousands of other absent parents could apply to have previous clean-break settlements overturned.

Susan Deas, a solicitor representing the father, who is originally from Carlisle in Cumbria, said the case was being fought on a matter of principle because the CSA formula failed to take account of the clean- break settlement. 'This case has implications for many thousands of absent parents,' she said. 'It will inevitably reopen old wounds.' The agency is in the process of reassessing the maintenance payments that must be paid when the parent with care of the children, usually the mother, is on state benefits including income support or family credit.

There are about 895,000 lone parents on income support and the Government estimates only about one-third were receiving maintenance before April. The agency is also assessing maintenance for parents with care who are receiving no contribution and who have no court order.

From 1996 the agency will take over from the courts the role of assessing child maintenance for all. After then any mother can apply for a reassessment, regardless of whether she has an existing court order or if she is on income support.

The agency's assessments are typically far higher than the courts' and it has been inundated with complaints. It does not take into account loans and debts, the cost of travelling to work or to see the children, or the cost of supporting stepchildren.

In another case at Teesside County Court last week, a divorced mother who was not on income support was told by the judge she could not simply have an earlier court order revoked in order to get an increased assessment from the CSA.

The mother, who has remarried, had been told by the CSA to get the court order revoked so that she could apply to the agency now rather than wait until 1996.

After the court order was revoked, her ex-husband, who had been paying pounds 120 a month for his three children, was told by the CSA to pay pounds 480 a month. On Monday the father succeeded in getting the original court order reinstated and the CSA payment overruled.

If the Teesside mother had won - and she is entitled to appeal - the case would have opened the floodgates to thousands of mothers who are not on income support to have court orders revoked and a new assessment by the agency before 1996.