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Can Judges Order the Capitalisation of Child Maintenance?

on Thursday, 01 April 2021.

For over 20 years, family court judges have had the power to change periodical maintenance payments to a lump sum award to meet income needs. Historically this only related to spousal maintenance but, in a recent case also included child maintenance.

The Case of AZ v FM

The parties had been married for 15 years before they separated. They had one child. The financial remedy proceedings of this case were determined in 2011. The Order specified that the husband was to pay child maintenance of £1,700 per month for the couple's child. This was until the child reached 18 or finished tertiary education, whichever is later.

The husband (based in the USA) failed, on many occasions, to pay the child maintenance on time. In November 2017, the wife (based in the UK), brought enforcement proceedings in respect of the payments. The husband then made an application for the level of child maintenance to be reduced to £800 per month on the basis that the child's needs had reduced and the husband could no longer afford £1,700 per month.

Notwithstanding that the judgment was not perfected until two years later (October 2019), the judge ordered that there be a small reduction in periodical payments and that they be paid entirely in advance. In other words, the judge ordered that the child maintenance should be capitalised.

The Appeal

The husband issued an appeal on the ground that the judge had no jurisdiction to capitalise child maintenance. The husband argued that section 31 of Matrimonial Causes Act explicitly applies to the capitalisation of spousal maintenance only. The husband's case was argued as follows:

  • Unlike applications for spousal maintenance, applications for child maintenance cannot be statutorily dismissed
  • The child's circumstances could change so the capital sum may no longer be appropriate
  • Child maintenance is intended to be variable based on both the paying parent's income and the child's needs. This principle would be undermined if the sum was capitalised at the outset.

On appeal, the judge considered the language used in section 31(5) of the Act. In summary, whilst it does not specifically permit the making of a lump sum award to vary child maintenance, it does not specifically prohibit it. He therefore disagreed with the husband's position and concluded that the court did have the power to award a lump sum.

The judge explained that an Order to capitalise child maintenance would be "extremely unusual" and is likely to "remain a very rare bird". It had been appropriate in this case due to a combination of:

  • persistent litigation by the husband
  • repeated defaults by the husband in meeting the ordered child maintenance payments
  • The remaining short period of time for child maintenance to be paid as the child at the time was 19.

What Does This Mean for Existing Orders?

The court has a duty to consider a clean break (ie capitalise assets rather than order that maintenance be paid). Of course, this will not be appropriate for all cases eg where needs cannot be met through the division of capital assets alone.

Whilst this case presents some welcome clarity on the point, it does seem apparent that the circumstances are rather limited. That said, practitioners should be mindful of this case and where appropriate could helpfully use it to the benefit of their clients.

If you would like any specialist legal advice on child maintenance, or whether this case may be appropriate to your circumstances, please contact Sam Hickman in our Family Law team on 07464 544828, or complete the form below.

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