My spouse is claiming a lower income to reduce the settlement. What can I do?

How does the court decide what my spouse earns?

The court looks at your spouse’s income and is also required to consider their earning capacity. Under section 25(2)(a) of the Matrimonial Causes Act 1973, the Court must have regard to the income, earning capacity, property and other financial resources each spouse has or is likely to have in the foreseeable future, including any increase in earning capacity it would be reasonable to expect them to take steps to acquire.

Income matters is most relevant for meeting needs in circumstances where ongoing maintenance is appropriate. Earning capacity is not an asset to be divided (Waggott v Waggott [2018] EWCA Civ 727), but it can determine how much maintenance is paid and for how long. Our complete guide to spousal maintenance explains how maintenance works more generally.

What financial disclosure must my spouse give?

Each spouse must give full and frank disclosure in Form E, a financial statement verified by a statement of truth, with supporting documents (Form E). Forms E are exchanged at least 35 days before the first court appointment (Family Procedure Rules Part 9).

How can I challenge my spouse’s figures?

If you believe that your spouse has under-reported their income then you can challenge the figures by asking targeted questions and seeking documents, through the court where necessary. Before the first court appointment, each side has the opportunity to file a questionnaire setting out the further information and documents that they wish to see. At that hearing, the court decides which questions must be answered.

If someone else holds the documents, such as a bank, employer, or company, the court can order the third party to produce them where that is “necessary to dispose fairly of the proceedings or to save costs” (FPR 21.2). It is important to note that you must not take your spouse’s private documents without their consent. That can be unlawful, and our hidden assets guide explains the risks.

Often the first indication that the full picture is not being provided will be where the income disclosed is completely out of kilter with the lifestyle that the parties have enjoyed. The questionnaire is the opportunity to ask questions. For example, if a spouse has declared a lower than expected bonus receipt it may be pertinent to ask for evidence of bonus payments received over the last 5 years so that we can ascertain if the most recent bonus is consistent with, or lower than, that pattern.

What are the warning signs of understated income?

The most common warning sign is a change in income that coincides with the separation or a declared income that is out of step with the party’s lifestyle.

What if my spouse runs their own business?

A business owner who controls their own income can have their income tested against what the business could pay them. In R v R [2012] EWHC 2390 (Fam), the court noted that money can come out of a company as salary, dividends, or through a director’s loan account, and considered whether the company could raise cash to fund a lump sum.

In YB v ZB [2024] EWFC 458 (B), a Family Court appeal, the judge found that a husband who owned his company had an earning capacity significantly greater than the £100,000 a year the district judge had attributed to him, given the receipts he had had from the company in the previous 3 years. In respect of the wife, the judge reduced the earning capacity attributed to her from £1,500 to £1,250 a month, because the evidence did not support the higher figure given her caring responsibilities towards their young child.

Where company accounts are complex, the court may permit the instruction of a single joint forensic accountant. The court will only permit expert evidence if it is “necessary to assist the court to resolve the proceedings” (FPR 25.4), and evidence from employment experts on what a spouse could earn is usually not needed (Buehrlen v Buehrlen [2017] EWHC 3643 (Fam)).

In relation to businesses, it is necessary to look at the whole remuneration package and not simply the salary received. The individual may also receive dividends, pension contributions and other benefits.

Can the court decide my spouse could earn more?

Yes. If the court suspects that one party is deliberately supressing their income or can reasonably be expected to find a role with higher remuneration, then the court can base maintenance on that earning capacity rather than on their actual current pay. The same applies in reverse: the court can expect the receiving spouse to maximise their earning capacity as well where that is realistic.

Evidence of past earnings, qualifications, the job market and the reasons for any recent change in work can all help to build up a picture of what an individual can earn. A spouse who says they cannot find work will usually be expected to evidence what steps they have taken to look for work.

What can the court do if my spouse is not honest about their income?

If your spouse does not give full and frank disclosure, the court can draw adverse inferences against them, meaning it can find from the evidence as a whole that they have more income than they admit, provided the inference is properly drawn and reasonable. The court does not have to fix a precise figure, and where non-disclosure creates uncertainty, it can infer that the resources are sufficient for a fair award (Moher v Moher [2019] EWCA Civ 1482).

A failure to provide proper disclosure may also have cost consequences. The general rule is that each side pays their own costs, but the court can order a spouse to pay costs because of their conduct in the proceedings, including failing to comply with the rules or court orders (FPR 28.3). A deliberately false statement in Form E can lead to contempt proceedings, brought with the court’s permission (FPR 17.6). Our article on adverse inferences looks at this in more detail.

If materially understated income comes to light after a final order, you may be able to have the original order set aside (Sharland v Sharland [2015] UKSC 60). Our hidden assets guide explains how this works.

Can I get maintenance while the case is going on?

Yes. You can apply for maintenance pending suit to cover your reasonable living costs until the final divorce order (section 22 MCA 1973). You can also apply for a legal services payment order if, without it, you could not reasonably obtain legal representation, for example because you cannot get a litigation loan (section 22ZA).

In AB v CD [2026] EWHC 1504 (Fam), a husband said his income from all sources was £9,978 a month which was completely out of kilter with the family’s standard of living. He had received about £1.23 million when a loan note was repaid earlier that year. Cusworth J treated his claim that he could not afford to pay more with considerable caution based on H’s acceptance of the standard of living. He ordered interim maintenance of £8,000 a month, plus £7,000 a month in rent, and a £160,000 legal services payment order for the wife considering it appropriate to err in favour of the payee in the circumstances.

What about bonuses and future increases in income?

Usually maintenance will be expressed as an amount to be received from salary. Where one party is in receipt of bonus payments but the amount of those bonus payments is uncertain the court can order that the recipient shall receive a share of a future bonus, with or without a cap (H v W [2013] EWHC 4105 (Fam)). This avoids arguments about what a bonus will be, while protecting both sides.

Any order that includes ongoing maintenance is variable (s31 MCA 1973). The court looks at all the circumstances, including any change since the order, but a rise in income does not automatically mean higher maintenance will be appropriate.

What if my spouse understates income for child maintenance?

The Child Maintenance Service (“CMS”) deals with payments for children in most circumstances. It can be accessed by parents online and applies a formula to calculate how much should be paid.

The CMS also has the ability to consider an income variation in circumstances where the paying parent has unearned income. For example where they receive rent from a rental property, dividends or interest on savings that total at least £2,500 per annum.

In certain circumstances the court retains jurisdiction to make child maintenance orders. These are when: (a) the CMS does not have jurisdiction; (b) the parties agree child maintenance by consent; (c) the order is for a prescribed type including to meet educational expenses, for costs attributed to a disability or for a top up order. If the CMS has made a maximum assessment, then the court recovers jurisdiction to make a “top up” order i.e. to pay an extra amount on top of the amount required by the CMS. The court will have the power to make a top up order where the paying parent’s gross income exceeds £156,000.

What should I do now?

1. Gather what you already have. Keep copies of documents you own or share, such as joint bank statements and your own tax records.
2. Write down the history. Note past salaries, bonuses, dividends and any changes around the separation.
3. Record the lifestyle. Note holidays, cars, school fees and other spending the family was used to during the marriage.
4. Take advice early. A specialist can help you plan the questions, documents and evidence you need.
5. Consider interim help. Ask whether you need maintenance or legal costs funding while the case runs.