The problem with Harry and Meghan’s “financial independence” plan
Prince Harry and Duchess Meghan managed to dismantle the royal family on Thursday morning after they announced that they would be stepping down as senior royals and transition to financial independence.
However, questions are rife about the royals’ new “working model” for 2020, and why the two – who have a combined independent wealth of around AU$60 million – need to “work to become financially independent”.
“In 2020, the Duke and Duchess of Sussex have made the choice to transition into a new working model,” read the official Royal Sussex website.
“As they step back as senior members of the Royal Family and no longer receive funding through the Sovereign Grant, they will become members of the Royal Family with financial independence which is something they look forward to.”
Buckingham Palace issued a statement regarding their exit: “Discussions with the Duke and Duchess of Sussex are at an early stage. We understand their desire to take a different approach, but these are complicated issues that will take time to work through.”
What are these “complicated issues”?
The pair “value the ability to earn a professional income, which in the current structure they are prohibited from doing,” the official website reads.
This decision simply means that in order to become financially independent, the couple will no longer receive funding from the taxpayer-funded Sovereign Grant – which previously covered 5 per cent of their costs.
“Their Royal Highnesses prefer to release this financial tie.”
The remaining 95 per cent is provided through the Duchy of Cornwall as allocated by Prince Charles, under the system in place since Prince William and Prince Harry first established their offices.
It seems Harry and Meghan will still receive these funds from the Duchy of Cornwall, but this may be one of the “complicated issues” Buckingham Palace referred to in its statement.
The Duchy of Cornwall is the estate managed by Prince Charles, which has an income of over $40 million according to 2018 financial statements.
“The current Prince of Wales chooses to use a substantial proportion of his income from the Duchy estate to meet the cost of his public and charitable work as well as the public and private lives of his family, The Duchess of Cornwall, The Duke and Duchess of Cambridge and The Duke and Duchess of Sussex, and their children,” reads the Duchy of Cornwall website.
Private wealth
But despite the grant and funds from the duchy, Harry and Meghan were already wealthy beforehand with the Duchess having a reported net worth of $7 million prior to marrying Prince Harry.
Prince Harry’s net worth was even more substantial thanks to a hefty inheritance from Princess Diana, an allowance from Charles, his salary from serving in the army and a trust set up by his great grandmother. In 2018 his worth was reported to be between $36 million and $60 million.
Other things to know
Travel costs
The Duke and Duchess will pay for any travel expenses in their private time from their own income, as they pointed out that the royals have never used taxpayer funds to cover travel.
When in the UK, their security team will be paid for by taxpayers, via the royal family as they are considered “internationally protected people”, and as such, security is required.
Frogmore cottage
According to The Times, the couple may be asked to fork out money for rent if they choose to continue living in the $4.6 million Frogmore Cottage after a series of renovations took place on the historic property.
“Frogmore Cottage will continue to be the property of Her Majesty the Queen,” reads a statement on the official Royal Sussex website.
“The Duke and Duchess of Sussex will continue to use Frogmore Cottage – with the permission of Her Majesty The Queen – as their official residence as they continue to support the monarchy, and so that their family will always have a place to call home in the United Kingdom.”
Charities
The two will still remain patrons of the same charities as they were before, but will also launch a new foundation. They will most likely receive a salary from working in the charity.