What is fair maintenance for kids of high-income parents?

Divorces can be fraught and expensive, especially for high-income parents who may be asked to set aside up to 15 per cent of their monthly income to ensure that their children’s lifestyle is not disrupted by the parents’ fallout.

This appears to be the going rate based on recent High Court cases because the law has a soft spot for children as they are the casualties when their parents fight.

Such parents are often ordered to pay higher amounts of maintenance so that their children do not have to cancel all their enrichment and leisure activities or move to a much smaller home overnight.

Of course, the idea is not to create hardship for the parents, and the 15 per cent child maintenance award is imposed on those who can well afford to provide more for their children.

In one case, a father earning $20,000 a month was asked to pay a “reasonable” monthly maintenance award of $3,000 for his child, or 15 per cent of his income.

The same yardstick was adopted recently for a man who earned about $96,000 a month as an executive director of his company. On top of his salary, he was also entitled to claim for dining and entertainment allowances as part of his job perks.

His company reimbursed him around $560,000 for such expenses in 2019 alone, or $46,000 or so a month. On his own admission, he would spend $1,000 per meal when he dined out with his friends.

Following the earlier case, High Court Judge Kwek Mean Luck awarded child maintenance of about 15 per cent, or $14,700, for two kids.

This is how the court ruled on three of the main expenses for the children.

Enrichment classes

The mother said her children needed about $2,800 a month for piano, art, language, tennis and mathematics lessons. Her ex-husband argued that the cost was excessive, noting there was nothing stopping her from cancelling the classes and pocketing the money later.

But the judge dismissed the argument because the children had been attending these classes for some time and there was no evidence that they disliked or were stressed by them. The court allowed the classes to continue but reduced the sum to about $2,000 to cover only existing lessons.

Private transport

The children used to be ferried around in a car driven by their father’s chauffeur or they took private-hire car rides. So their mother asked for $880 a month for their transport.

This sum was based on her estimate of about $180 per week for 10 rides and she added extra fares for unscheduled events and fluctuations in costs due to peak hours.

She produced copies of receipts from such rides to support her claim, as her ex-husband wanted to cut the sum by a third. In the end, the court allowed a transport expenditure of about $660.

Grocery and dining

The wife sought more than $3,000 for the children’s monthly food and grocery expenses, while their father wanted to pay $900.

She said such expenses were reasonable and commensurate with the standard of living that she and the children were accustomed to during the marriage.

In particular, the $2,000 grocery costs were based on her past purchases, mainly from supermarkets in the city area. Her ex-husband said her choice of grocery outlets was “extravagant” but the judge disagreed, noting that she was entitled to shop at her usual outlets and that the amount she spent was relative to past expenses.

The judge added that the dining expenses of $1,500 for the children were not unreasonable considering their mother did not have a maid. While she could cook for herself and the children most of the time, there would also be times when they would have to dine out or order food to be delivered.

As she also kept receipts for dining expenses, the court agreed that the claim was reasonable and approved $3,500 in total for this part of the claim.

Ultimately, divorce does not spell the end of the relationship between parents and their children and that money should not be the reason for them to drift apart, especially when they could well afford to be more generous.

Source: Straits Times © SPH Media Limited. Permission required for reproduction.

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