Hughes Fowler Carruthers provide clients with sensitive, considered advice on financial provision for their children. Financial provision for children falls into two main areas: child maintenance and lump sum capital payments. HFC are well placed to advise on both.
Where the parents cannot agree on the level of general child maintenance, and they are both living in the UK, an application will need to be made to the Child Maintenance Service (CMS), formerly the Child Support Agency. The CMS will decide the level of child maintenance which should be paid according to a formula which is based on the prospective payer’s income, the number of children involved and the amount of time they spend with the paying parent. There are various procedures which the CMS will go through in the event that the prospective payer is not providing accurate information.
Where both parents live in the UK, the court can only make an order for general child maintenance where the parties have agreed the amount themselves. The court retains the power to make orders for school fees to be paid and where the paying parent has a gross income in excess of £156,000 per annum, it can order “top up” child maintenance to ensure the children’s standards of living does not vary greatly between the two homes. In addition, if one parent lives overseas, the CMS has no power to make a decision in that case and the court determines the entirety of child maintenance. In practice, many parents agree levels of child maintenance based broadly on the CMS scales.
Children’s housing needs will be met in a divorce by whatever housing provision is decided or agreed for each of their parents. Where the parents have not been married to each other, an application can still be made to the court for a housing fund to pay for a home for the children to live in. This application is made under Schedule 1 of the Children Act 1989 and is specifically a provision for the children and not for the parent who will live with the children.
The main difference between the divorce and Schedule 1 provision is that capital provided under Schedule 1 for the purchase of a house will generally be returned to the paying party in due course. Usually this will be when the youngest child turns 18 or when that child completes secondary or tertiary education. The precise terms of this arrangement, for example whether the property is held on trust, whether the occupying parent will contribute financially to the purchase or running costs of the property, whether the property will become the children’s rather than reverting to the paying parent, can be the subject of negotiation or order by the court.
Paying parties who have a high net worth and/or those with trust provision may be happy to agree housing provision on the basis that it will revert to them or the trust in due course given the historic returns on investment property, particularly in London. The occupying parent must keep in mind that their right to occupy the property will come to an end at some point and so they will need to give a great deal of thought to supporting themselves after their children’s minority ends.
This can be a highly emotive area and Hughes Fowler Carruthers uses its unmatched experience to help clients achieve the best result, for them and their children, swiftly and as harmoniously as possible.