I recently saw a post on Linkedin about potential economic abuse after a divorce or separation where the more affluent parent may refuse to share the costs of key costs for a child or children, including school trips, school uniforms, hobbies, and club membership fees. The post was about how this refusal might be another example of how an ex-spouse or partner can inflict financial pressure on the other parent by refusing to help with the costs for their child or children.
The sad reality is that this does happen and more often than many would realise. Indeed, I have found myself advising on both sides of the argument.
Why is do parents dispute how to pay the costs relating to their children?
From the paying parent’s point of view, it is not unusual for them to form the view that if they are paying child maintenance, then this is where their financial input towards children should end. This view is often stronger if the parents have previously been through a divorce or separation and divided their family finances at that time. This can create a lot of bitterness and may impact the thinking behind any subsequent financial decisions, even if it is to the disadvantage of the parties’ child or children. There is also the more sinister view that the act of refusing to pay towards things such as school trips or hobbies for the children is a form of control or even punishment in a financial form at the end of a relationship or marriage.
For the parent hoping to receive a contribution towards certain child-related costs, it is common that for there to be a view that less frequent costs should be shared between the parents, even where child maintenance and, in some cases, spousal maintenance is being paid. Their thinking often being that less frequent costs such as school trips and new school uniforms (which can be very expensive) are not what child maintenance is for, instead of forming the view that these payments are for the day-to-day outgoings instead. Furthermore, they may believe that the child or children are the responsibility for both parents and, as such, the costs associated with raising them should be shared as well.
What can be done if there is a dispute around child-related costs?
The issue of child-related costs and how these might be shared or paid for is a complicated legal issue. As such, I have prepared this blog to provide some useful information when dealing with such disputes.
What is not initially obvious to many is that the court is unable to make an order for child maintenance unless both parties agree the amount payable and it forms part of a financial order in their divorce or dissolution. There are some exceptions to this rule but, generally speaking, the court will leave decisions regarding child maintenance to the Child Maintenance Service (CMS for short).
If parties going through a divorce or dissolution do agree on child maintenance, then orders which include the agreed child maintenance will be binding for one year only, after which point either parent can apply for a calculation by the Child Maintenance Service (CMS). This may not be pursued by either parent but, equally, there is little that can be done to prevent either parent from seeking a new calculation that may well benefit them.
If you and the child’s other parent cannot agree on the appropriate level of child maintenance, the parent who lives with the child or children for more of the time can apply to the Child Maintenance Service (CMS) for them to calculate how much child maintenance the other parent (often referred to as the “non-resident” parent) should pay. A fee is usually payable to the CMS unless the applicant is under the age of 18 or they are a victim of domestic abuse.
The process for calculating how much the non-resident parent should be paying in child maintenance is based on a percentage of their income and the number of children they must pay maintenance for.
There is a reduction of 1/7th for each night per week, averaged over a year, that the child or children stay with the paying parent. This will include any holiday contact that the child or children spend with the non-resident parent.
Additionally, there is also a reduction applied if the non-resident parent has any other children in their household or if they are paying child support to more than one parent.
If the non-resident parent earns more than the threshold level (currently £156,000 per annum or £3,000 per week gross), the court can make a top-up maintenance order under Schedule 1 of the Children Act 1989, the Matrimonial Causes Act 1973 or the Civil Partnership Act 2004. Much will depend on whether the parents are or were married or in a civil partnership when considering child maintenance.
In some circumstances, the courts can make orders regarding maintenance to meet a child’s special needs if linked to a disability or for the payment of specific educational or training costs.
The court will sometimes consider making child maintenance orders where a non-resident parent or the child or children is/are resident abroad.
The website, www.cmoptions.org, contains lots of useful information regarding child maintenance, including a child maintenance calculator.
Additional financial support for children and Schedule 1 of the Children Act 1989
Where the parents of a child are or were married or in a civil partnership, the court has the power to order the transfer of property to a child or to order the payment of a lump sum to a child within divorce or dissolution proceedings. Such orders are, however, rare since the finances in a divorce or dissolution will generally remain with the parties themselves rather than be transferred to their children.
An alternative option for seeking financial support and provision on behalf of children is under Schedule 1 to the Children Act 1989 where it is possible for the following persons to apply on behalf of a child or children:
- A parent,
- Special guardian, or
- Person in relation to whom an order has been made providing that a child lives with them (a child arrangements order).
It is also sometimes possible for a child to make an application themselves against one or both parents.
This law is often used for one parent to make an application against the other when they have a child or children but have not been married or civil partners. That said, it is also possible for those who have divorced or dissolved a civil partnership to apply on behalf of a child or children for further financial support on their children’s behalf in certain circumstances.
What financial provision can be sought under Schedule 1 to the Children Act 1989?
The court can make an order providing for:
- A lump sum or series of lump sums. Such lump sum payments could be for any number or reasons, but real-world examples include for the purchase of a family car or to pay for school trips or private school fees. A key element with the lump sum provision is that there is no limit on the number of lump sum applications that can be made on behalf of a child or children. This means multiple applications might be made throughout the course of a child’s life.
- Property to be transferred or held in trust. Such provision is for the benefit of a child until a certain event occurs, usually once the child or children reach the age of 18 or complete their full-time secondary or university education. The property will then usually be transferred back to the paying parent or sold with all proceeds going back to the paying parent.
“Top-up” child maintenance. This can be sought when:
- The non-resident parent’s income is higher than the limit which the Child Maintenance Service deals with (currently £156,000 per annum gross),
- In respect of educational expenses
- For expenses connected with a child’s disability.
Does a parent have to apply?
If a child is receiving or, is intending to receive, instruction at an educational establishment or training, or if there are special circumstances such as a disability or illness, a child over 18 can apply to the court for maintenance or a lump sum from one or both parents so long as their parents do not live together.
Do note, a child can also only apply where a court order providing for maintenance for that child was not in place immediately before that child reached the age of 16. Therefore, the timing of a potential Schedule 1 application is crucial.
What is the procedure for applying under Schedule 1?
Once an application is made by one parent (or potentially the child), a court date will be set and both the applicant and respondent will be asked to provide financial disclosure setting out all of their financial circumstances.
What does the court consider when making a decision under Schedule 1?
When deciding what order to make, the court will consider:
- The income, earning capacity, property, and other financial resources that each parent has or is likely to have in the foreseeable future.
- The financial needs, obligations, and responsibilities that each parent has or is likely to have in the future • the financial needs of the child.
- The income, earning capacity (if any), property and other financial resources of the child.
- Any physical or mental disability of the child, and
- The way the child was being or is expected to be educated or trained.
Are there things to be aware of before making a Schedule 1 application?
One of the key things to note is that the judge has a wide discretion in such cases and the outcome can be difficult to predict. This means that it can be hard to know at the outset whether it is going to be proportionate or worthwhile financially and psychologically making such an application.
If the order being sought is of a relatively modest value, then it may not be proportionate to make a Schedule 1 application since the costs, time, and effort in pursuing such a claim may outweigh the value of the order being sought. Furthermore, if little or nothing is known about the finances of the other party, then there are risks in pursuing such claims if it turns out that they have little, or no, assets for the court to make orders against or where any orders would be difficult, or impossible, to enforce – such as where the paying parent is based in another country.
Another point to be aware of is that cost orders can be made against a party who makes an application which the court deems to be unnecessary or disproportionate. Such orders may also be made against a party if they refuse or fail to negotiate reasonably during a Schedule 1 case.
Are Schedule 1 cases expensive?
Schedule 1 claims can be expensive and time-consuming, particularly if it is not possible to negotiate a settlement away from court and it is necessary to enter into litigation through the court with the other parent.
It is possible for the parent seeking Schedule 1 orders to ask the other parent to pay all, or some, of their legal costs and the court do regularly make orders of this nature to help ensure a balanced playing field with both parties able to receive and pay for legal advice. That said, arguments about costs and cost contributions will often add substantially to the overall costs and time spent on the matter.
Real examples of Schedule 1 outcomes from previous cases
“Top-up” child maintenance/support
- J v C (Child: Financial Provision)  1 FLR 152; F v G (Child: Financial Provision)  1 FLR 261 ; MT v OT (Financial Provision: Costs)  2 FLR 1311 ; H v C  2 FLR 1540, all examples of cases where the court have confirmed that the child or children should be entitled to be brought up in circumstances which bear some resemblance to the paying parent’s resources and standard of living.
- SW v RC  1 FLR 1703, where the father lived on capital rather than income, he was ordered to pay maintenance based on his available capital since he had no substantive income to which a Child Maintenance Service calculation could be successfully applied.
- F v G (Child: Financial Provision)  1 FLR 261, the court decided that there should be no reduction in child maintenance payments by father because of mother’s own income.
- DE v AB  2 FLR 13963, the court made an order which required the father to pay £250,000 for a property (to revert back to him once the child was an adult) plus £40,000 lump sum to the mother, despite the fact it would require him to sell his home, in which he had £358,000 of equity.
- Re P, Lump sum for home moving costs, incidental capital costs and provision of a car.
- Re S (Child: Financial Provision)  2 FLR 94, the Court of Appeal made a financial order to include the costs of the mother’s travel to the Sudan to see the child (where he had been taken by the father without the mother’s consent).
- Re M-M (Schedule 1 Provision) 2 FLR 1391, where the was father ordered to pay £44,600 to discharge the mother’s credit cards. This represented about a third of his cash at bank of £137,000.
What should I do next?
The issue of financial provision and support for a child or children is a complex and often misunderstood area of the law. If you would like to discuss potential financial claims on behalf of your child or children, then we at Summit Law would be happy to talk through your options with you. The family team at Summit Law have experience and expertise in advising on, and dealing with, these types of cases. We will be able to help and support you by providing friendly and bespoke advice tailored to you, your case, and your needs.
Our family team can be contacted on 020 7467 3980 or by e-mail at email@example.com.