At Paradigm Family Law we seem to have an increasing number of enquiries from unmarried parents concerning child maintenance and financial provision outside of the remit of the Child Support Agency (CSA) or Child Maintenance and Enforcement Commission (CMEC) – collectively the Child Maintenance Service (CMS).
Schedule 1 Children Act 1989
These are cases where perhaps the income of the absent parent is above the CMS statutory limit of £3000 per week, or as is the case in our ever shrinking global world, where the absent parent lives abroad. If those circumstances apply, then the resident parent, is often left with no option that to bring an application for financial provision under Schedule 1 of the Children Act 1989 – a “Schedule 1” case.
Mention child maintenance and most unmarried parents will say that they are aware of the CSA, and not always in a complimentary way. But is Schedule 1 only for big money cases, or can applications be made for financial provision when the payer’s financial position is not so high as to take them above the CSA limits?
Applications under Schedule 1 can be brought against a ‘parent’ by any one of the following:
- a parent,
- special guardian or
- any person in whose favour a residence order is in force.
‘Parent’ is defined as the biological parent or other persons who are parents by operation of the law. This includes a formerly married parent.
The application is made by filing Form A1, and then the parties must complete their financial disclosure by way of Form E1.
Since 18th June 2011, Council Regulation (EC) No 4/2009 on jurisdiction, applicable law, recognition and enforcement of decisions and cooperation in matters relating to maintenance obligations (“the Maintenance Regulation”) came into force.
Jurisdiction for making decisions relating to maintenance can be established under one of five different grounds as set out in Articles 3 to 7. The default position is found in Article 3, which states that jurisdiction shall lie with the court where:
(a) the defendant is habitually resident; or
(b) where the creditor is habitually resident; or in the court with jurisdiction to entertain proceedings as to
(c) the status of a person (i.e. marital status) or
(d) parental responsibility, where the maintenance is ancillary to those proceedings (unless jurisdiction is based solely on nationality).
How does the court approach Schedule 1 cases?
The Court has discretionary powers and uses them by reference to a six point checklist set out at Section 4(1) of Schedule 1, which is very similar to the Matrimonial Causes Act 1973 Section 25 checklist, but more limited. The court must have regard to “all the circumstances of the case” including:
(a) the income, earning capacity, property and other financial resources which each person mentioned in sub-paragraph (4) has or is likely to have in the foreseeable future;
(b) the financial needs, obligations and responsibilities which each person mentioned in sub-paragraph (4) has or is likely to have in the foreseeable future;
(c) the financial needs of the child;
(d) the income, earning capacity (if any), property and other financial resources of the child;
(e) any physical or mental disability of the child;
(f) the manner in which the child was being, or was expected to be, educated or trained.
Is there an overlap between CMS and Schedule 1 financial provision?
The position was made clear by Holman J in Dickson v Rennie  EWHC 4306 (Fam). In that case, it was held that the Court’s power to order top-up maintenance is only available where the CMS has assessed that the payer’s income exceeds the maximum maintenance assessment of £3,000 gross per week.
The recent case of Re TW and TM (Minors)  EWHC 3054 (Fam) has also brought the issue to the fore, wherein it was clearly stated (in a ‘top up’ scenario) that:
“…the court has no power to make a contested order for periodical payments unless there has been, pursuant to s.8(6) of the Child Support Act 1981, an antecedent calculation by the secretary of state or his predecessor, the Child Support Agency, in the maximum amount as provided for in para.10 of sch.1 of that Act”
But, Schedule 1 applications are not limited to maintenance. The court can make lump sum orders aswell as property orders – settlement or transfers. Under Schedule 1 the court can also make orders for maintenance and lump sums for children over 18 in full time education or where there are special circumstances, such as a disability.
The court can also make costs orders in Schedule 1 proceedings, and Calderbank offers therefore have a role to pay in encouraging parties to make reasonable proposals in an effort to minimise their costs liability.
How does the court decide?
The leading case on exercise of the discretion under Section 4(1) is Re P (Child: Financial Provision)  EWCA Civ 837 and the judgment of Thorpe LJ. The court takes a broad brush approach when considering the amount of the claim – ‘it is not for the court to specify the precise amounts of each category of the claim, but to take an overall sum to make provision for the components that are referred to’.
In big money cases, the court will firstly consider a home for the child, usually ordering that the home reverts to the payer when the child reached 18. The court will consider what lump sum is needed to furnish the home aswell as provide for a car, before then looking at the monthly requirements in meeting expenses and the upkeep of the property.
Even in smaller money cases, there could still be an order made providing for property, perhaps with the resident parent making up any shortfall by way of mortgage or their own funds. In the case of DE v AB  EWHC 3792 (Fam) the mother was permitted to supplement a housing fund of £250,000 by a mortgage, provided she did not place the father’s original investment at risk. Another example is in the case of Re M-M (A child)  EWCA Civ 276. In that case, the court ordered that the father make a lump sum payment to clear the mother’s credit card debt and for repairs to her home. There was no property element, since the mother already owned her own home and supported the child through state benefits. Here despite the father having subsequently married and had three children to his new wife, the court still made provision to enable the mother to meet her debts – but nothing more.
Can the parent with care secure a higher award than by using the CMS?
The case of Re TW and TM (above) makes it clear that whilst there is no strict formula applied for calculating maintenance, the court will start by looking at the CMS approach. In that decision, at paragraph 6 a worked example is used by Mostyn J:
“…If there are two qualifying children the rate is 16 per cent for a gross income up to £41,600 and then 12 per cent on the next £114,400. The effective rate for someone earning the maximum chargeable income of £156,000 is 13.06 per cent. If there are two children living in separate homes with different mothers then the percentage rate will be apportioned equally between them. So, if the gross income is £41,600 the payment for each child is 8 per cent; if it is £156,000 it is 6.53 per cent. The maximum income for the purposes of the formula of £156,000 was found by the deputy district judge to correspond to the father’s basic wage at the time she heard the case”
Mostyn J went on to say that [emphasis added]:
“..where a court is considering issues of child maintenance the formula is not, so to speak, written in marble but supplies only a starting point. There may be in a case a very good reason why there should be departure from the starting point of the formula. In my opinion the formula should apply even where the earnings of the father are in excess of the £3000 per week maximum provided for in the Act and the Regulations. If the earnings of the father were very much in excess of that then there would be a good reason to depart from the formula downwards, but if the income of the father is not unadjacent to the maximum then to my mind, subject to other factors, that of itself is not a good reason to depart from the formula.”
What if the parent with care starts cohabiting?
In matrimonial cases, often where maintenance is paid to a spouse, the impact of a cohabitee can be significant – most likely leading to an application to vary and or extinguish the spousal maintenance completely. Under Schedule 1, the property settlement element if the receiving parent starts to cohabit is unlikely to be affected, provided the child still lives in the house. However, the income element of any provision could be susceptible – see Singer J in F v G (Child: Financial Provision)  EWHC 1848 (Fam).
The Net Result
With the trend for relationships being towards cohabitation rather than marriage (a topic we recently covered in this blog), there are increasing numbers of families who may need to call upon the provisions of Schedule 1 over and above maintenance from the CMS. Hopefully in this post we have shown that the Family Courts are more ready to use the provisions of the Children Act in ever more creative and practical ways to support the welfare of the children and not just for those with extreme wealth.
For more details on child maintenance and financial provision under Schedule 1, please do not hesitate to contact James or Frank. Paradigm Family Law offers a free initial consultation and our fixed fee solutions cover financial proceedings from start to finish. You can call us on 0845 6020422 or email us to [email protected]. You can also follow us on twitter and LinkedIn and Facebook for the latest news and views on family law.