Advice on separation financial agreement

[MPL]

Hi all,

First-time poster here and I'm desperately in need of advice.

I've been married for 20 years, but in the last year my wife has decided that she has never been happy and so now we're talking about separation. I was prepared to put in the effort required to make it work initially, but I'm now so down-trodden I feel that separation is the only way forward.

My problem is what to propose financially to make separation possible. I'm quite willing to help out as much as I can, but I will not be made homeless and, as a 47 yr old man who has to work from home, I can't consider renting a room in a shared house. I need to find a 1/2 bed and, around these parts, that's £800pm minimum.

We have 6 kids (two adult) and I am the sole breadwinner and have been for our entire marriage. She doesn't have a trade or profession. Wife homeschools the youngest children, but that is increasingly becoming a very part-time effort for her. Gets disability benefit of about £70 pw because of an understanding doctor and very well-treated rheumatoid arthritis, but doesn't really struggle with walking, etc.

We have a house worth about £375,000 with a mortgage of £185,000 and a secured loan of approx £1,500 in joint names. There's also around £15,000 in unsecured debt in my name which I've struggled to pay and I'm now on a debt management plan. Work lease me a car (massive people carrier which only the wife uses) at a favourable rate but which still works out about £400 per month. On a total income of £2,976 per month there is less than £750 left over after all the regular bills are paid (not including food, petrol, etc.)

I have no family, and no friends I could go and stay with. What little inheritance I had went into paying the deposit on our first property. Wife has - get this - one of the UK's top family lawyers for a father (now retired) and a barrister for a brother-in-law. Affluent people. I can't help feeling that it's only a matter of time before I'm living in a tent and selling Big Issue.

But just on the off-chance that I can propose something that we can agree on, where should I start? How much can I sensibly retain from my wage-packet to rent a place and buy food before handing over the rest to her? And, given that she has no income, can she be forced to go out to work?

Sorry if this all seems scrambled, but it reflects my state of mind at the moment. If you have any advice or experience to share I'd really love to hear from you.

Thanks.

[MarkR]

(06-13-2016, 05:43 PM)MPL Wrote:

Hi all,

First-time poster here and I'm desperately in need of advice.

I've been married for 20 years, but in the last year my wife has decided that she has never been happy and so now we're talking about separation. I was prepared to put in the effort required to make it work initially, but I'm now so down-trodden I feel that separation is the only way forward.

My problem is what to propose financially to make separation possible. I'm quite willing to help out as much as I can, but I will not be made homeless and, as a 47 yr old man who has to work from home, I can't consider renting a room in a shared house. I need to find a 1/2 bed and, around these parts, that's £800pm minimum.

We have 6 kids (two adult) and I am the sole breadwinner and have been for our entire marriage. She doesn't have a trade or profession. Wife homeschools the youngest children, but that is increasingly becoming a very part-time effort for her. Gets disability benefit of about £70 pw because of an understanding doctor and very well-treated rheumatoid arthritis, but doesn't really struggle with walking, etc.

We have a house worth about £375,000 with a mortgage of £185,000 and a secured loan of approx £1,500 in joint names. There's also around £15,000 in unsecured debt in my name which I've struggled to pay and I'm now on a debt management plan. Work lease me a car (massive people carrier which only the wife uses) at a favourable rate but which still works out about £400 per month. On a total income of £2,976 per month there is less than £750 left over after all the regular bills are paid (not including food, petrol, etc.)

I have no family, and no friends I could go and stay with. What little inheritance I had went into paying the deposit on our first property. Wife has - get this - one of the UK's top family lawyers for a father (now retired) and a barrister for a brother-in-law. Affluent people. I can't help feeling that it's only a matter of time before I'm living in a tent and selling Big Issue.

But just on the off-chance that I can propose something that we can agree on, where should I start? How much can I sensibly retain from my wage-packet to rent a place and buy food before handing over the rest to her? And, given that she has no income, can she be forced to go out to work?

Sorry if this all seems scrambled, but it reflects my state of mind at the moment. If you have any advice or experience to share I'd really love to hear from you.

Thanks.

As you have indicated that your ex has access to good quality legal advisers, you need to take on board that most of us on here know a lot about things due to our own experiences, so before acting on any information posted, make sure your happy with it yourself, or consult a Solicitor.

The first thing is you need to understand what happens in this situation with regard to where benefits can help out. I am assuming that you are both and the Children are considered to be UK Nationals and can lawfully access the UK Welfare Benefits System.

Even when you are still married, you can legally separate, and as long as you can demonstrate to the Benefits Agency that you are no longer living as a couple, your ex can start to make claims.

Your ex can claim for herself, in the form of Job Seekers Allowance if able to work (and home teaching suggests she can work), or Employment and Support Allowance if she can not.

The status of the 2 oldest children is important. If they are still in "Approved" full time education and up to 19, your ex will still get Child Benefit for them, and tax credits.  If not, then they need to be claiming in their own right anything they can, or find a training course what then gives them a income.

If your wife is getting Child Benefit for the 4 others, she can also claim Tax Credits for them.

I have run a very vague calculation based on the 4 under 16 (as I do not have all the facts), but it would appear that she will get £225 per week in Child Tax Credits,
Child Benefit of £60, at least £70 for herself, in addition to her DLA .   You might want to check out http://www.entitledto.co.uk  what is where I run the check.

Leaving the Housing Situation aside for a min, your ex under Welfare Reforms has what the law of the country says she needs to live off.

You need to pay child support, what takes into account your income, if you have any dependent children living with you, and how much staying contact you have.
Until you have your own place with staying contact, you need to be paying her £143 per week for Child Support.

While you can remain in the house, its not counted as that. For her to access the benefit system, you live independently. There is nothing wrong with eating together (you can make a case its better for the children to see both mum and dad taking care of them), as long as you can prove your paying your way, in relation to it (NOT PROVIDING IT ALL). Anything she gets from you outside Child Support is considered income for her means tested benefits.

The Mortgage is a contract you both signed, its up to you both to make good payments. Up to now, by law will be considered to be paid half and half. If you can prove it was not "Family Money" used for the deposit, than that will have a bearing on it. Any shortfall, and the lender can come after either or both of you, for the full amount (and given her status, it will be you). While its in both names, both of you can not claim Housing Benefit.

Your options are,

a, look at a sell and rent back. Company's what do that, often pay 65% of current value, but complete in 2 or 3 weeks. (Capital of above £6000 is considered for means tested benefits your ex might get).

b, Get legal advise on both paying going forward, so you know who gets what once its paid off (depending on amounts you both pay).

c, It might be that your ex will allow you to pay the mortgage instead of some of your Child Support liability, if CMS are not involved. A friend of mine has told me of a recent case, where an appeal to CMS ruled that because after paying the mortgage there was no disposable income, that it considered that to be far, as he was paying for his ex and children to live in the house.

While you remain, you need to share (or she needs to pay you if in your name) some of the utility costs. Take into account the 2 oldest either need to be paying keep, or your ex will be getting benefits for them if in education. My opinion is about the 20-25% mark is fair.

Regarding the car, either she pays, or it goes back (if your contract allows this). If it does not, end it as soon as you can.

There might be another issue, so I need to confirm your employed. The reason for this, is rules on Child Support are not the same if Self Employed, its business profit. Therefore if you are, renting office space would be a business expense going forward (or part of any housing you get), what would then reduce Child Support payments. For staying contact with the 4 children, you might need a 3 bedroom (but offset part of your rent as office space cost).

The main thing in your situation, is you need to look after yourself. Let the Welfare System look after your ex and the Children, protect your investment as you will benefit from any sale (the house), and remember that you do not have to pay anything above the Child Support Calculation. If you have anything over, by all means provide cash or items, but do not leave yourself short.

I also know how dept management plans work, and following your separation once the details are known on what you now have to pay in the form of Child Support (and perhaps any rent), your disposable income changes, so your payment amount might.

[MPL]

MarkR, thank you so much for such a detailed and thoughtful response. I've learned more about my options in the last few minutes reading your post than I have trawling the 'net for many hours over the last few weeks.

Just to clarify re: your point about self-employment ... I'm a mixture of both. Well, not entirely. You see, I have a small limited company that I use for freelance work outside of my day job. It never made much profit, but recently (because of my state of mind), has made none at all, and I am considering closing it down. One less thing to worry about!

Once more, thank you for taking the time to offer me the benefit of your incredibly helpful advice.

[MarkR]

(06-14-2016, 06:01 PM)MPL Wrote: MarkR, thank you so much for such a detailed and thoughtful response. I've learned more about my options in the last few minutes reading your post than I have trawling the 'net for many hours over the last few weeks.

Just to clarify re: your point about self-employment ... I'm a mixture of both. Well, not entirely. You see, I have a small limited company that I use for freelance work outside of my day job. It never made much profit, but recently (because of my state of mind), has made none at all, and I am considering closing it down. One less thing to worry about!

Once more, thank you for taking the time to offer me the benefit of your incredibly helpful advice.

Regarding Child Support, its your overall income that is looked at for the last tax year, regardless of employed, self employed or a mixture. Where there is a Self Employed part, its always on yearly review as it is never the same.

Whenever any of the things considered changes, the amount you pay should be looked at again. This is
a, Your income
b, If you or any partner have dependent children (who you or a partner get child benefit for)
c, if the amount of staying contact changes.

[MPL]

(06-14-2016, 06:52 PM)MarkR Wrote:

(06-14-2016, 06:01 PM)MPL Wrote: MarkR, thank you so much for such a detailed and thoughtful response. I've learned more about my options in the last few minutes reading your post than I have trawling the 'net for many hours over the last few weeks.

Just to clarify re: your point about self-employment ... I'm a mixture of both. Well, not entirely. You see, I have a small limited company that I use for freelance work outside of my day job. It never made much profit, but recently (because of my state of mind), has made none at all, and I am considering closing it down. One less thing to worry about!

Once more, thank you for taking the time to offer me the benefit of your incredibly helpful advice.

Regarding Child Support, its your overall income that is looked at for the last tax year, regardless of employed, self employed or a mixture. Where there is a Self Employed part, its always on yearly review as it is never the same.

Whenever any of the things considered changes, the amount you pay should be looked at again. This is
a, Your income
b, If you or any partner have dependent children (who you or a partner get child benefit for)
c, if the amount of staying contact changes.

Once again MarkR, many thanks.