Financial Provision for Children
If both parents live in England the court does not have power to deal with child maintenance, but the Child Maintenance Service (CMS, previously the CSA) can make a calculation. If you agree to a maintenance figure, the court can approve the agreement in an order. However, either parent could still go to the CMS once the order is one year old. Whether or not there is an agreement about child maintenance, a CMS calculation or a court order, the court still has the power to make orders for additional maintenance, school fees and for capital and property for the benefit of children. Either parent could bring a claim against the other seeking the transfer and/or settlement of a property and/or a lump sum.
The factors which the court must take into account are all the circumstances of the case, including:
- the income, earning capacity, property and other financial resources which each of the parents has or is likely to have in the foreseeable future;
- the financial needs, obligations and responsibilities which each of the parents has or is likely to have in the foreseeable 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 manner in which the child was being, or was expected to be, educated or trained.
Both parents have a duty to give full and proper disclosure of their financial position so that a proper financial arrangement can be made.
Under the Children Act a parent can apply for the following financial provision for children:
If the CMS has no right to make a calculation because either the parent the child lives with lives outside the UK, the court will probably look at the CMS calculations as a starting point. These could be adjusted, for example, to take into account costs of child contact, which may include international travel.
The CMS rules are fairly inflexible. The court has more flexible powers and can, for example, also take into account that the payer could maximise his income, the income of the applicant (which the CMS calculation entirely ignores) and so on.
The court can order top-up child maintenance if the payer’s income is above the maximum of the CMS limit of £3,000 per week gross taxable income. The level of top-up maintenance will depend largely on the standard of living and the lifestyle of the parents. So for example in the case of a multi-millionaires who have houses in different countries etc. the court may try to allow the parent the child lives with to provide the child with the same standard of living as the other parent would (or does when the child is with them). Child maintenance in these cases in England can therefore be extremely generous by international comparison.
Maintenance for Costs of Disability or Education
Maintenance to cover the costs connected with the disability of a child will always be very case specific.
The question of private school fees can be contentious. Factors the court will take into account include whether the child is already privately educated or was expected to be privately educated, the affordability of private education and so on. Private education is certainly more common in the UK than elsewhere in Europe and the court would make an order in the appropriate case. There is of course no rule that says that the parent the child does not live with should pay for school fees alone. If there is a CMS calculation and the parent the child lives with earns well (or could do so), the parents may well need to share those costs.
Nursery or after-school child care costs to enable the parent the child lives with to go out to work are also included under this heading and could be ordered in addition to a CMS calculation.
Non-Recurring Lump Sums
A parent can apply for a lump sum several times. This is meant to cover things like the costs of buying a car, furniture, appliances and the like. If the non-resident parent does not work and instead lived off savings, this might also be a case for the resident parent to apply for a lump sum to be able to maintain the child.
Settlement of Property
If the resources are available, the court can order one parent to transfer a home or part of a home into a trust. Alternatively, the court could order one parent to pay the other a lump sum to enable them to buy a home for themselves and the child. The payer would get their share in the home back when the (youngest) child is 18 or 21.
In a typical case the unmarried parents would have bought a family home in joint names. Under property law the parent who leaves could insist on a sale to get his half share back. However, if there is a child, the court could order that his share should remain where it is so that the child can continue to live in the home. Of course in some cases, the house may be too large and the court could order a sale, but for all or some of the other parent’s share of the sale proceeds to be used towards the purchase of a new home, so that the mortgage is reduced.
Even if there is no owner-occupied home as yet and the parent the child lives with has been renting, the court can order for the other parent to pay money into a trust to enable a home to be bought, e.g. in the case of a lottery winner or where the parents never lived together.
If house prices rise, such a trust is of course a good investment. On a personal level it may be difficult to enforce a sale once the child has grown up, so some parents regard their share in the home as that child’s inheritance, which then allows them to delegate the decision about a sale to the other parent and the child.
These orders can be for hundreds of thousands or even millions of pounds and are therefore much more generous than in other countries.
If you litigate through the courts about financial issues, this is naturally going to cost money on lawyers (as well as lost wages for days in court and stress etc). The costs could become disproportionate to the money at stake. Mediation is a good and inexpensive way to come to an overall settlement without going to court.
For advice on your specific circumstances please contact a solicitor
24 May 2016 by Andrea Woelke