Maintenance and Other Financial Provisions for Children on Separation

APPLYING FOR MAINTENANCE FOR THE CHILD

Either parent may apply to the Child Maintenance Service for an assessment of the maintenance that the paying parent should pay to the receiving parent, as long as the following conditions are met:

  • the child is living in the UK

  • the paying parent is resident in the UK or overseas but on government service or employed by a UK based company

  • the child is below 20 years old, not in work and not at university.

  • the paying parent is the legal parent of that child

  • any court order for child maintenance is over 12 months old.

You can also agree on arrangements regarding maintenance payments for your child without applying to the Child Maintenance Service. You do not have to apply to the Child Maintenance Service – it is perfectly acceptable to agree arrangements privately, but the amount you agree on will not then be binding.

If you and your ex-partner cannot agree how much will be paid in maintenance for your child, you will have to make an application to the Child Maintenance Service. You begin this application by calling 0800 988 0988.

You can read a summary of all the options by following this link:
http://www.cmoptions.org/en/maintenance/compare-options.asp

The Family Court cannot always make a maintenance order instead of there being a Child Maintenance Service assessment. It is important to note that the family court cannot make a maintenance order unless:

  • the Child Maintenance Service does not have jurisdiction, for example the non- resident parent is habitually resident outside of the UK (although there are complicated rules about how some non-residents will still fall within the jurisdiction of the Child Maintenance Service, for example if they are paid by a UK company and we recommend you consult one of the lawyers from our network if you need more information on this),

  • the order is for a “top up” (this only applies where the Child Maintenance Service has already made a maximum assessment),

  • the parties agree an order by consent,

  • the paying parent has their income assessed by the Child Maintenance Service as more than £3,000 gross a week,

  • the sum requested is for educational costs like school fees. If this is for boarding school fees then the paying parent can ask for a variation to provide a slight discount on the Child Maintenance Service payments, or

  • the child has a disability and the sum requested is to meet the costs of that disability only.

Otherwise the Child Maintenance Service has jurisdiction and the parent with care cannot apply to the court. The Child Maintenance Service simply apply a formula to the non- resident parent’s gross income, which works in most cases. However, the problem is that the information about income is taken from the HMRC records, so people with large amount of capital or who have little onshore income for example can end up with a very small sum of child maintenance to pay, even though they are very wealthy. This is a recognised problem, (see for example the case of Dickson v Ronnie) and there is currently a consultation about how to rectify it.

The Child Maintenance Service can only make provision for children until they are 20, provided that the remain in full time non-advanced education, which means school or college (but not university) as long as they are not in receipt of any benefits or in remunerative work. If a child leaves school at 16 and does not go to college, then the payments will end on 31 August after their 16th birthday.

Where the Family Court has jurisdiction, the order cannot extend beyond the child’s 18th birthday unless the child is or will be in training or education or there are special circumstances (such as disability) (section 29 of the MCA 1973). Education includes University.


CALCULATION OF THE CHILD MAINTENANCE

The Child Maintenance Service will calculate maintenance as set out in this chart:

 

Percentages applied to gross income up to a maximum of £156,000 a year

  First £800 pw Above £800 pw
1 child 12% 9%
2 children 16% 12%
3 or more children 19%  15%

Deductions where non-resident parent has a child in his household
   
1 child 11%  
2 children 14%  
3 or more children 16%  

Deductions for overnight stays with paying parent

52 to 103 nights Deduct 1/7th.
  104 to 155 nights Deduct 2/7ths.
  156 to 174 nights Deduct 3/7ths.
 
175 or more Deduct one-half plus a further £7 each week per child for whom there is shared care (but reducing to no less than £5 a week).

 

For a more exact estimate for your particular situation you can use this online calculator:

http://www.cmoptions.org/en/calculator/

If you apply to the Child Maintenance Service you will pay a £20 application fee and the statutory service will then calculate how much child maintenance should be paid.

MANAGING PAYMENTS FOR THE MAINTENANCE OF THE CHILD BETWEEN THE PARENTS

What happens once the Child Maintenance Service has carried out an assessment? Once an assessment has been carried out, and a specified amount is payable, you can choose whether to use the full collection service Collect & Pay, which incurs further costs, or manage payments between yourselves through Direct Pay, which incurs no further fees.

  • The Collect & Pay system: With a Collect & Pay arrangement, the Child Maintenance Service will collect payments from the paying parent and pass them on to the receiving parent. Both parents will have to pay collection fees. These are:
    • an additional 20% collection fee for paying parents on top of their usual child maintenance amount, and
    • a 4% collection fee for receiving parents deducted from their usual child maintenance amount.
  • With Collect & Pay, the Child Maintenance Service will manage the maintenance payments and can take action to enforce the agreement if the paying parent doesn’t keep up with regular payments. The paying parent may have to pay enforcement charges if this happens.

    Here is an example of how the Collect & Pay arrangement works:

    David is a paying parent. Vicky is a receiving parent. They have a Collect & Pay arrangement.

    The Child Maintenance Service work out that David must pay £50 a week in child maintenance. He must also pay a collection fee of 20% on top of his weekly payment. This fee works out at £10 for each weekly payment. This means David must pay a total of £60 a week.

    Vicky is due to receive £50 a week in child maintenance. The Child Maintenance Service charge a collection fee of 4% each time David’s payment is passed onto her. This fee works out at £2.00 for each weekly payment.

    After the fee is taken away, this means the Child Maintenance Service pay out £48.00 each week to Vicky.

  • Direct Pay System: With Direct Pay, the Child Maintenance Service calculates child maintenance but doesn’t collect it. The paying parent makes payments directly to the receiving parent. Neither parent will have to pay collection fees.

    Once the amount has been calculated, it’s up to you to agree with the other parent how and when money is paid. It’s a good idea to keep a record and receipts of your payments, in case there are any problems in the future.

    The advantage of Direct Pay rather than simply agreeing the amount between yourselves is that in the case of Direct Pay, the Child Maintenance Service decides on the amount – and this means it’s legally binding. If the paying parent doesn’t keep up with payments the receiving parent can ask the Child Maintenance Service to take action to enforce payment.

    If you have a Direct Pay arrangement, and the other parent does not comply with their maintenance obligations, what action can you take? If you made your arrangement through the Child Support Agency or the Child Maintenance Service, it is legally binding. This means that the Child Maintenance Service can take action if payments are not made. In the event of non-payment you need to tell the Child Maintenance Service that you have not received payment from your child’s other parent. They will contact your child’s other parent to request payment. If payment is not made they can move your case to the Child Maintenance Service collection service, called Collect and Pay.

    In Collect and Pay, your child’s other parent will pay the Child Maintenance Service and the service will transfer the money to you. There is a charge for using this service and it will affect the amount of money you receive. The paying parent has to pay an additional 20 per cent on top of the usual child maintenance amount, and your child maintenance amount is reduced by four per cent.

    If your child’s other parent stops paying under the collect and pay system then the Child Maintenance Service can take enforcement action. This can include:
    • Taking money from the other parent’s bank account, wages or benefit
    • Seeking a court order to use bailiffs or force a sale of their property.
  • If these enforcement actions fail then the Child Maintenance Service can use legal enforcement such as disqualifying your child’s other parent from driving, selling any property they may own or imposing a prison sentence.
COSTS OF ENFORCING A CHILD MAINTENANCE ORDER

The Government has introduced enforcement charges to those customers using the Child Maintenance Service who fail to pay in full and on time. These are:

  • £200 if the Child Maintenance Service has to take out a lump sum deduction order

  • £50 if the Child Maintenance Service has to take out a regular deduction order

  • £50 if the Child Maintenance Service has to make a deduction from earnings request (if you are in the Armed Forces)

  • £50 if the Child Maintenance Service has to take out a deduction from earnings order (for all other employers).

CLAIMS FOR FINANCIAL PROVISION (IN ADDITION TO MAINTENANCE)

If you are an unmarried parent you can make an application to court for financial provision for your child from the other parent on behalf of your child as an unmarried parent (Schedule 1 of the Children Act 1989).

You have a few options to bring a claim on behalf of your child. You can apply for:

  • Periodical payments. This is governed by the Child Support Act and carried out by the Child Maintenance Service ('CMS') unless the court has jurisdiction under Schedule 1 in following circumstances:
    • top-up above CMS maximum assessment.This applies where the non-resident parent has annual gross income of more than £156,000;
    • by consent;
    • for educational costs (e.g. school fees);
    • disability;
    • child or parent lives in another jurisdiction.
  • Secured periodical payments (periodical payments secured by a capital deposit). Again, this is governed by the CMS and so the court will only have jurisdiction in the limited circumstances above.
    • Lump sum orders. These are unlimited in number.They are applied for when the non-paying parent needs specific items such as furniture / furnishings / various items a child may need; car purchase (including periodic replacement); debts; legal costs. In contrast to matrimonial legislation, the Court has power under Schedule 1 to award interim lump sum payments.
    • Orders for settlement of property. Here the court orders the transfer of a property into a trust of which the child is a beneficiary. This means that the applicant and child can live there without payment during the child's minority. Only one order can be made. Usual terms include that when the child reaches adulthood (or the youngest reaches adulthood in the case of siblings) the trust property reverts to the settlor (that is; the father).

FACTORS CONSIDERED BY THE COURT WHEN DECIDING ON FINANCIAL PROVISION

The Court is required to consider the following factors when making an award:

  • The income and earning capacity which each parent has now and in the foreseeable future;

  • The financial needs and obligations each parent has or is likely to have in the foreseeable future;

  • The needs of the child;

  • The income and earning capacity of the child;

  • Any physical and mental disability of the child;

  • The manner in which the child was being educated or had been expected to be educated.

Standard of living is not included as specific statutory factor in the legislation, but case law confirms a child has a right to be brought up in circumstances which bear some sort of relationship to their father's resources.

Where the Court's must decide whether to award maintenance where the paying party's income is above the Child Maintenance Service maximum (£3,000 gross a week), the Court should take 'broad brush assessment in determining what budget mother reasonably requires to fund her expenditure in maintaining a home and its contents and in meeting other expenditure external to the home, such as holidays, routine travel expenses, entertainment, presents etc.'.

Who may apply for periodical or lump sum payments under Schedule 1 of the Children Act 1989? The following persons may file the application with the court:

  • A parent or guardian or person with the benefit of a Child Arrangements Order which provides that the child lives with them;

  • A child aged over 18.

Who can orders under Schedule 1 of the Children Act 1989 be made against? The following persons may be ordered by the court to make periodical or lump sum payments under Schedule 1 of the Children Act 1989:

  • Parents (including step-parents) but not against cohabitants.

  • There is no requirement for the parents to have been in cohabiting relationship.

INTERNATIONAL SITUATIONS: CHILD LIVES IN A DIFFERENT JURISDICTION

What are the powers of the court to issue orders under Schedule 1 of the Children Act 1989 when child lives in a different jurisdiction but the paying parent is living within England and Wales?

Historically, the Court's power under Schedule 1 to make financial provision against a parent living in England and Wales where the child resides outside of the jurisdiction was limited to periodical payments and secured periodical payments.

However, that restriction has been lifted if the child lives in an EU country by the operation of the Maintenance Regulation (Council Regulation (EC) No. 4/2009) and Schedule 6 to the Civil Jurisdiction and Judgments (Maintenance) Regulations 2011. This means that now capital provision can be made for a child living outside the jurisdiction of England and Wales.

We do not know what will happen in relation to this upon Brexit.

PROCEDURE TO BE FOLLOWED FOR AN ORDER UNDER SCHEDULE 1 OF THE CHILDREN ACT 1989

Before you can issue proceedings, you must attend what is known as a Mediation Information and Assessment Meeting (“MIAM”). This is a meeting with a specially qualified family mediator, who will explain to you the alternatives to the court process. The purpose of the meeting is to give you an opportunity to find out whether going to court would really be the best way of dealing with the issues that you face following your relationship or marriage breakdown (e.g. children, property and financial issues), and in particular whether mediation could be an effective alternative.

There are exemptions in specific circumstances – if there is evidence of domestic violence or a risk of serious harm to children the family will not have to attend a meeting.

Once you have been to a MIAM, if you wish to continue with your court application, the first step is to complete a “Form A1” application and send it to the court

https://formfinder.hmctsformfinder.justice.gov.uk/a1-eng.pdf

Then a “First Appointment” will be fixed by the court when it processes the application. The First Appointment will be between 12 and 16 weeks from the issuing of the Form A1.

The next step is a formal financial disclosure. This must be made by each party in a "Form E1":

https://formfinder.hmctsformfinder.justice.gov.uk/form-e1-eng.pdf

This form requires specific and quite detailed information about both parties’ finances.

There are detailed notes to help you complete the Form on the court service website:

https://formfinder.hmctsformfinder.justice.gov.uk/form-e-notes-eng.pdf

You have an obligation to provide full, frank and clear financial disclosure to the court and the other party.

If either party is in breach of this duty, whether by failing to share certain relevant facts and circumstances or actively presenting a false case, then the court may set aside the substantive financial order and make a costs order against that party.

Forms E1 have to be exchanged at latest 5 weeks before the date of the First Appointment.

After the exchange of Forms E1, the parties are both required to supply certain documents. These will normally include a Questionnaire to seek additional information and any documents that are relevant to the other party's financial disclosure. Other documents include a Chronology which sets out the relevant history, and a Statement of Issues, which summarises what the main areas of disagreement appear to be.

First Appointment Hearing

The First Appointment hearing is a case management appointment at which a judge decides such practical and procedural issues as:

(i) whether any valuations or experts' reports (for example property valuations) are needed,

(ii) which parts of the respective Questionnaires should be answered.

The court has no power at this hearing to make a substantive order in relation to finances, unless there is an agreement between the parties’.

The next step is to implement the judge’s requests, for example by filling in the appropriate questions in the Questionnaires, and perhaps obtaining valuations.

Financial Dispute Resolution Hearing

Usually the second court hearing is a judge-led hearing at which each party’s lawyers put forward reasoned arguments about what would be a fair outcome, almost like a mediation appointment. It is known as a Financial Dispute Resolution hearing (‘FDR’). It takes place about four to six months after the First Appointment hearing.

An offer of settlement would usually have been made by each spouse before the hearing; these offers would usually be offered on a "without prejudice" basis, which means that they cannot be mentioned again in court outside the hearing. This allows parties to make attractive settlement offers without fear that the offer will be used against them later. The FDR judge is told about all offers, including without prejudice ones.

The FDR judge will also explain what, in their view, a likely outcome at a Final Hearing will be.

There is often some further negotiation and some to-ing and fro-ing in and out of court to have the judge’s further help in trying to resolve the issues. If an agreement is reached, the judge will be told and a binding order can be made. If no agreement is reached, the case is then set down for trial and any necessary instructions from the judge for further preparations for the trial are made. That is the end of the FDR judge’s role in the proceedings.

Most FDRs involve a judge and a court, but there is also the option of “Private FDRs”, where parties agree to appoint (and pay) an experienced lawyer, sometimes a retired judge, sometimes an experienced barrister, to conduct the same sort of process. This is becoming an increasingly popular option. There are a few differences, but the procedure and aim are basically the same.

The advantages of Private FDRs are that you can choose your “judge”, rather than have whoever the court gives you on the day; you can choose your date and have longer than the court may give you (e.g., a day, instead of an hour or so); you choose your venue (typically, one of the lawyers' offices or chambers; not a court). The disadvantage is that you have to pay the “judge”, usually on a 50/50 basis.

Final Hearing

A Final Hearing will take place approximately six to twelve months after an FDR hearing. At a final hearing a judge will read the written evidence, hear some spoken evidence from the parties, and listen to detailed submissions from each parties’ lawyers. The judge would then decide upon the appropriate financial outcome.

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