What is Schedule 1 financial provision for children?
Most unmarried parents seeking financial provision for their children are unlikely to be familiar with Schedule 1 of the Children Act 1989.
Instead, their minds are more likely to turn to the Child Maintenance Service. However, Schedule 1 to the Children Act is not just for the rich and famous.
According to the Office for National Statistics, the fastest growing family type over the last decade is cohabiting couples both with or without dependent children.
We all know that when married couples split up, they can divorce and have the financial claims resolved by agreement or a Court Order.
But what happens to unmarried couples, particularly those with children?
The financial claims between the parents might be limited but Schedule 1 of the Children Act does allow consideration of financial provision for a dependent child over and above maintenance.
Re P in 2003 was the first opportunity for the Court of Appeal to undertake a searching review of the principles underline Schedule 1 cases.
The essential facts of Re P are uncomplicated:
- The mother was young and had little capital or resources of her own
- The father was older and very wealthy
- The child was very young
- The parties had never actually lived together
The Court of Appeal allowed the mother’s appeal and substituted an Order providing for:
- £1,000,000 capital to rehouse herself and the child
- An income of £70,000 per annum
The Factors to be taken into Account
Very quickly, a Court is guided by a six point checklist contained in Schedule 1 (which is similar but narrower than the same factors affecting married couples). Essentially, a 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 has or is likely to have in the foreseeable future;
(b) the financial needs, obligations and responsibilities which each person 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.
Following on from this therefore, the principles in this type of case and the steps to be taken should be:
- First, the appropriate house for the child and cost
- Second, the appropriate lump sum required to furnish and equip the house and the costs of a family car (and replacement)
- Third, the budget for the parent with care to maintain the house, the child and other external expenses
It is therefore very important to prepare the case properly and seek specialist family law advice from a solicitor.
Important Points to Note
The law around Schedule 1 cases is quite quirky and the following points are important but it not an exhaustive list:
- Any property settled to the parent with care of the child to provide housing will revert to the other parent when the child reaches its majority
- There can only be one settlement of property order and any attempt to make a second application would be struck out
- It is therefore very important that the housing secured is sufficient to provide for the child’s long term needs
- If the parent with care chooses in the future to cohabit or remarry it would be unlikely to disrupt a settlement of property so long as the child lived with that parent, although it may affect any level of income provision
Schedule 1 applications therefore are not restricted just to child maintenance or the involvement to the Child Maintenance Service. In addition, the Court has power to make other orders to include a lump sum of money, a transfer and settlement of property.
Traditionally, these types of cases have concerned high net worth individuals and where there is plenty of money to go around. However, there are now examples for the Court where, for example, the father does not have sufficient assets to comfortably meet both his own needs and those of the children.
In light of recent social trends, it is likely that the number of unmarried couples will increase and Schedule 1 therefore has a far wider reach than perhaps people believe or understand. The Government at some point may change the law to give better rights to unmarried couples but for now the Court does have a number of powers to help parties separating to meet the needs of the child.