Breakdown of cohabiting relationships – what financial provision can be sought for children?

There remains a gap in the law where the rights of cohabitees, upon the breakdown of a relationship, are concerned. Despite the much-used term “common law spouses”, the law does not recognise such an entity. The issue of whether cohabitating relationships should attract formal legislation is now perhaps more prudent than ever, especially in light of marriage rates continuing to decline.

This can be further complicated if there are children involved, and the question is often asked “what is my partner obligated to pay towards the kids?”

The Child Maintenance Service (CMS) or the court?

If the unmarried parents cannot reach an agreement between themselves as to what the maintenance liability should be, most turn to the CMS who will calculate the award payable by the non-resident parent (i.e. the parent who does not live with the child), on the basis of their gross weekly, monthly or annual salary.

The CMS only has jurisdiction to calculate a child maintenance liability on a salary not exceeding £3,000 gross weekly (£156,000 gross, per annum), therefore in cases of higher net worth, the resident parent will apply to the court to make an order.

Top-up maintenance

In practice, whilst the courts have very limited powers in respect of awarding child maintenance, it is possible to apply to the court for a top-up order under section 8(6) of the Child Support Act 1991.

Holman J’s judgment in the case of Dickson v Rennie [2014] provides invaluable guidance on when it is appropriate to make such an application, namely, that the court will not have jurisdiction to make a top-up order unless the CMS has themselves first calculated the income to be in excess of the maximum level.

Mostyn J went even further on this point in his judgment in CB v KB [2019] and he criticised the changes to the child maintenance regime, resulting in the asset-based ground being removed. Mostyn J highlighted his concern that such changes would result in a greater number of parents being left without suitable financial provision and/or being left to pursue the same through the court. Mostyn J concluded by confirming that when calculating child support for those earning over the CMS threshold, the starting point should be the result of the CMS formula and, in the present case, found no reason to depart from it.

It should be noted that there is no specific sum of money that will be awarded in top-up cases – the amount will vary on a case-by-case basis and is wholly at the discretion of the court.

Schedule 1 proceedings

It is possible for the resident parent to make an application to the court under Schedule 1 of the Children Act 1989, for additional financial provision in the interests of the child.

Whilst such applications are far more common in cases where there is greater wealth, orders can also be made in more modest cases. The size and nature of such awards will simply reflect the financial “pot” that is available and the non-resident parent’s standard of living.

Financial provisions commonly ordered under this legislation include (but are not limited to) the following:

i) Lump sum(s) (of which more than one application can be made during a child’s minority)

ii) Purchase/transfer of property to the resident parent (often to be returned to the transferor upon a trigger event e.g. the child/children completing full time education)

iii) Payment of school fees, and

iv) Allowance for child care costs, for example, fees for a nanny (of which only one application can be made, unlike lump sum(s)).

However, the judgment in CB v KB [2019] noted that pursuing capital claims under Schedule 1 should not be used as a “back door” to “making a capital award which rolls up expenditure which would ordinarily be met by a periodical payments order”.

Holman J also made plain in Dickson v Rennie [2014] that an applicant cannot seek a lump sum which are merely dressed up income orders. The applicant mother in this case was “…frankly no more than seeking to recoup or recover the difference between the ordered maintenance and the Child Maintenance Service calculated maintenance.” Holman J explained “I simply cannot entertain that limb of this application. To do so would be very blatantly to flout what I have described as the barrier or shutter erected by parliament between the functions of the Child Maintenance Service and the court.”

Whilst the court has a wide discretion when making such awards, it is guided by the checklist set out in paragraph 4(1) of the Act, as follows:

i) The income, earning capacity, property and other financial resources each party has or is likely to have in the foreseeable future

ii) The financial needs, obligations and responsibilities that each party has or is likely to have in the foreseeable future

iii) The financial needs of the child

iv) The income, earning capacity (if any), property and other financial resources of the child

v) Any physical or mental disability of the child, and

vi) The way the child was being, or expected to be, educated or trained.

Whilst proceedings of this nature may be daunting, it is sometimes the only way to obtain the necessary financial provision for the benefit of the child/children.

As for the risk of costs, the general rule for Children Act applications of “no order as to costs” does not apply to Schedule 1 matters, so there is, of course, a risk of being ordered to pay some or all of the opposing party’s costs.

That being said, there are mechanisms in place to ensure “equality of arms” and justice throughout such proceedings, as per the judgment given in Gudanaviciene v Director of Legal Aid Casework and Lord Chancellor [2014]. This is to ensure that each side is afforded a reasonable opportunity to present his or her case under conditions that do not place them at a “substantial disadvantage vis-à-vis their opponent”. Such assistance can even take the form of one party ensuring the payment of the other’s legal fees on a pound-for-pound basis. A claim for assistance with costs is commonly referred to as a Legal Costs Funding Order.

The outcomes of applications of this nature are highly dependent on the circumstances of each case and expert advice is nothing short of essential in these matters.