Defending an appeal
Unsurprisingly it is not only the non-resident parent that can apply for a variation to the formula, parents with care can too. A parent with care dissatisfied with the formula can make an application which you will then need to defend. As a non-resident parent you may be faced with any one or all of these variation grounds namely:-
1. If your ex believes that you have assets worth over £65,000.00 (after deducting any mortgage or loan relating to them) she can make an application on this ground. The outcome of this can be extremely penal. The only question is whether the asset exists and if it does then the CSA must apply an 8% interest rate against the asset and add that to your income. Thus if you have received an inheritance for say £100,000.00 and you put it with the very best building society account you would probably achieve about 5% gross interest, £5,000.00 per annum. After Tax you will actually receive approximately £4,000.00 per annum. On variation however the CSA will presume an interest rate of 8% and not take into account any Tax. The presumption will be that you are receiving £8,000.00 per annum from this asset net of Tax. We have already pointed out to the Secretary of State that for non-resident parents paying top rate Tax this is equivalent to gross interest rate of 13% per annum, a wholly unobtainable figure. Defences are however available for the ground some of which are very complicated and concentrate on the definition of the word “asset”. If you do have assets in excess of £65,000.00 and you have received a variation application it is well worth your while taking advice on 08456 588683.
2. Income not taken into account. Where you are assessed to pay £5.00 per week or less and your income is made up not only of PAYE salary but also other income that is not usually taken into account (most usually share dividends for company directors) it is possible to take into account the dividend income that is not usually taken into account. It is very important that any company director obtains legal advice about their position concerning the CSA since this ground is simplicity itself to avoid.
3. Diversion of income. If your ex feels that you have an ability to control your income because you are either self-employed or a company director and she can make an application and the CSA will have to investigate whether income is being diverted to other people such as your current partner, your brother or sister, or for instance to provide you with a flash car, or due to some recent amendments to the legislation to provide dividend payments instead then she can apply for a variation. This is a highly legalistic ground and the amount of a variation, if granted is dependent upon a variety of factors. Legal advice is always worthwhile to obtain in these circumstances.
4. Lifestyle inconsistent with income. Where your ex takes the view that your lifestyle hugely exceeds your income then this variation can be granted. This is again a highly legalistic ground and there are defences available. Confusingly enough there are then defences available to your ex to the defences that you put forward so that even if you establish your defences she could then establish the defence to your defence! The method of actually dealing with this kind of departure is also very difficult and very frequent mistakes are made.
In reality there have been very few applications on variations so far but early indications would suggest that the CSA is very reluctant to make these variation awards. In most cases where these applications are made the CSA simply refers the matter onto a Tribunal and the Tribunal ends up making these decisions after a trial in which both the mother and non-resident parent are expected to attend.
It is very important to realise that these applications can be extremely expensive if not properly defended. There have been departure decisions given by Tribunal’s which have increased assessments from £5.00 per week to £80.00, £100.00, £150.00 per week or more. With the new system remember that the maximums are much, much higher.
It is therefore very important that your case is skilfully defended and Child Support Solutions has been involved in pursuing and defending both departures and variations all the way back to their earliest days. There is almost certainly no other lawyer with Bob Pape's wide breadth of experience contesting these kind of applications in the entire country.