What is Schedule 1 Children Act 1989? Your questions answered

Is child support the only option?

No. Many parents are unaware of the options save for an application to the Child Maintenance Service (“CMS”). If unmarried and not in a civil partnership, parents can obtain limited financial provision under Schedule 1 of the Children Act 1989. Although most reported cases deal with the very wealthy, it is an important issue for all parents to consider.

Here are some issues that every unmarried separated parent needs to consider.

What orders could I apply for?

• Periodical payments (for yourself on the child’s behalf or to the child themselves)
• Secured periodical payments (for yourself on the child’s behalf or to the child themselves)
• Lump sum (for yourself on the child’s behalf or to the child themselves)
• Settlement of property for the benefit of the child
• Transfer of property to you on the child’s behalf or to the child themselves.

If the application is brought to the court by a child, they can apply for periodical payments or a lump sum but not a settlement/transfer of property

What does a periodical payments order mean?

The primary jurisdiction for calculating and enforcing payments of child maintenance remains with the CMS. However, the court can make some orders:

• Top-up orders: If there is a maximum CMS assessment and the non-resident parents’ income exceeds £156,000 gross per annum and the court is satisfied that the circumstances of the case make it appropriate for the payer to pay more than the CMS assessment.
• School fees/vocational fees: If a child is at school or undergoing training for a trade, profession or vocation and the order is made solely to meet some or all of the expenses incurred in connection with the provision of the instruction or training.
• Disability: If the child is disabled and the order is made solely for the purposes of meeting some or all of any expenses attributable to the child’s disability.

What does a lump sum order mean?

The court can make one or more lump sum orders. It is usually an order to meet capital expenditure of a singular nature such as furnishing and equipping a home, clothing and baby equipment or provision for a car.

It is not for costs of living.

The lump sum must be for the child’s benefit.

What is a transfer or settlement of property?

The court can order a parent to purchase or transfer a property to the parent with care of the child for as long as it will benefit the child. Once it is no longer needed, it generally reverts back to the payer.  

Who can make a Schedule 1 application?

This is usually the parent with care, guardian or special guardian or anyone who is named in a child arrangement order with whom a child is to live. The child must live with the applicant and is a person under the age of 18.

However, a child who has reached the age of 18 may apply in their own right, but only for a lump sum or periodical payments if they are or will be in education or training for a trade, profession or vocation. Or if there are special circumstances which would justify making the order.

How long will an order last?

Periodical payments will usually end on the child’s 17^th birthday and not go beyond their 18^th birthday unless the child is or will be in education or undergoing training for a trade, vocation or profession or there are special circumstances such as physical or other disability.

An order will usually state that payments terminate when the child is 18 or ceases full time tertiary education. If the payer dies, then the periodical payments stop but an application may be able to be brought under the Inheritance Act for further provision out of the deceased’s estate.

In the case of a transfer or settlement of property, the property is usually returned to the parent who provided it in the same circumstances as periodical payments would end (save for the death of the payer).

How does the court decide what award should be made?

The court will take into consideration all the circumstances which include:

• The income, earning capacity, property and other financial resources a parent has or is likely to have in the future.
• The financial needs, obligations and responsibilities a parent 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.
• How the child was being or was expected to be educated or trained.

What is the process for claims under Schedule 1 Children Act 1989?

In the flowchart below, we document the process that claims under Schedule 1 Children Act follow.

Schedule 1 claim definitions

Applicant

The person making the court application/asking the court to make an order.

Arbitration

A privately funded, out of court, form of dispute resolution which can provide an outcome if matters proceed on a contested basis. It is highly adaptable process where both parties work with their appointed arbitrator to manage the case. If agreement cannot be reached the arbitrator will make the decision.

Case management

The court has a duty to actively manage each case and as such this procedure may be adapted to the particular circumstances of a case (see Part 1 of FPR 2010: Overriding Objective).

Child Maintenance Service (CMS)

The CMS has jurisdiction for all maintenance cases where the non-resident parent earns less than (currently) £156,000 gross per annum.

Chronology

A timeline of key events to provide the judge with a brief outline and dates relevant to the proceedings.

Collaborative law

A family law process which involves parties engaging their own collaboratively trained solicitors.

Both parties and their solicitors agree in writing not to go to court. All issues are discussed in four-way meetings, whether in person or remotely, through video conferencing.

Consent order

When the parties reach an agreement which resolves the dispute, the agreement is written up into a document (draft order) which is signed by both parties and records the agreement which has been reached. Once this consent order has been judicially approved and sealed by the Court it becomes legally binding.

Court bundle

Documents needed by the court to deal with a hearing regulated by PD27A FDR (2010). Prior to each hearing, the applicant has responsibility to try to agree the contents of the bundle with the respondent and prepare a file a copy of the bundle for the court and parties. If the applicant is not legally represented, but the respondent is, it becomes the Respondent’s responsibility to prepare the bundle.

Court fee

Currently £275 to issue a form A/A1. Additional court fees are required if applications for interim hearings or directions are sought.

Directions

The steps which must be taken and complied with to move a case forward.

Expert advice

May include valuations of property, tax issues, company valuations.

Family Procedure Rules 2010 (FPR 2010)

The rules of court which govern family cases.

Final hearing

The hearing at which the court imposes a final decision on the parties.

Financial disclosure

This is providing the other party with a full statement of your current financial situation, it is documented within Form E/E1 and will include supporting documents i.e. bank statements, mortgage statements, payslips. The court will order exchange of financial disclosure before the first appointment takes place and it will be ordered to be updated on various occasions until settlement is reached and/or a final hearing takes place.

Financial dispute resolution appointment (FDR)

A judge led negotiation hearing used to try and reach settlement.

The hearing is ‘without prejudice’ and the judge cannot impose a settlement on the parties but will offer guidance to the parties and an indication as to the potential settlements that could be imposed if it were to proceed to a Final Hearing. The parties will not give evidence at the FDR. It is anticipated that the parties will use the time at court trying to negotiate a settlement.

The judge who oversees the FDR will have no further involvement in the case and a new judge will oversee the final hearing.

Financial order

A court order that deals with the financial aspects of the application. It may be made by consent if the parties agree.

First appointment

The first court hearing where directions will be put in place to move the case forward.

Form A/A1

Notice of [intention to proceed with] an application for a financial order.

Form E/Form E1

Financial statement. This a detailed form setting out your financial details, including the needs of yourself and any children. Both parties have a duty to provide full and frank, this includes providing details on capital, income and pensions. Any supporting evidence required is identified in the Form E/Form E1 and must be provided.

Form H

Estimate of costs for a final remedy hearing. This is filed no later than 1 day before the first appointment and the financial dispute resolution appointment.

Form H1

Statement of costs (financial remedy). This is filed no later than 14 days before the final hearing.

Interim hearing

During the financial remedy process, one or both parties may file applications asking the court to deal with matters that need to be resolved in the interim period before a final outcome is reached. This may include an application for interim maintenance, legal services order (contribution to legal fees) or to deal with issues regarding allegations of third-party ownership of a resource or asset.

Mediation

A confidential and impartial family law process. Together with your chosen mediator, the parties set the pace and agree topics for discussion and frequency of meetings. The mediator helps facilitate a supported conversation, it is not about relationship counselling, but helps the parties to try to reach an agreement in respect of finances.

MIAM — mediation information and assessment meeting

This meeting provides information about the mediation process. It is conducted by a trained mediator who will assess whether mediation is suitable taking into account the particular circumstances of the case. It should be held within 15 working days of contacting the mediator. A MIAM must be undertaken prior to the issuing of any financial remedy application unless an exemption applies.

Narrative statement

A narrative statement setting out a party’s case and referring to the factors to which the court will have particular regard to when making a final order (see below).

Open settlement offer

Settlement proposal made not on a without prejudice basis so that it can be referred to in Court.

Online portal

An online process for filing financial applications and orders with the court. It cannot be used in all cases.

Part 25 Application

An application made using Form D11 under Rule 25 of the FPR (2010) for permission to instruct an expert in financial remedy proceedings.

Periodical payments

Maintenance payments.

Pre action protocol

Set out in Part 9 FPR (2010), the pre action protocol is to be considered and complied with prior to the issue of court proceedings.

Questionnaire

Each party has the opportunity to put forward a questionnaire, requesting further information, clarification or documents arising from the other parties’ financial disclosure.

Respondent

The person or people receiving the court application.

School fees order

An order to pay or contribute towards the payment of school fees/educational costs. Service of proceedings: Within four days, beginning with the day on which the application was filed, the court shall (unless otherwise requested by the applicant):

1. serve a copy of the application on the respondent; and
2. give notice of the first appointment to the applicant and the respondent.

If the applicant wishes to serve a copy of the application on the respondent and notifies the Court on filing the application, a court officer will return to the applicant the copy of the application and notice of the date of the first appointment and the applicant must then within 4 days beginning with the date on which the copy of the application is received from the court, serve the copy of the application and notice of the date of the first appointment on the respondent and file a certificate of service at or before the first appointment.

Statement of issues

A document that describes the principal issues between the parties, to assist the judge at a first appointment.

Top up maintenance

Maintenance payments that can be ordered by the court to “top up” the maximum maintenance assessment that can be made by the CMS.

Without prejudice offer

An offer marked ‘without prejudice’ that is made in an attempt to settle a case cannot later be used as evidence before the court. The judge deciding the case at the final hearing should not therefore be aware of the parties’ without prejudice offers so their decision cannot be potentially influenced. A judge at FDR is referred to without prejudice offers.

Schedule 1 Children Act 1989

Schedule 1 Children Act 1989 provides the guiding principles that the Court applies when deciding how applications under schedule 1 should be dealt with. The Court has to consider:

• the income, earning capacity, property and other financial resources which each person has or is likely to have in the foreseeable future.
• the financial needs, obligations and responsibilities which each person 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.
• the manner in which the child was being, or was expected to be, educated or trained.

Summary

This is a highly discretionary area of the law and the outcome of each case will depend on the specific set of circumstances. Expert advice is essential.