child periodical payments

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Child maintenance and cohabitation should not be linked

August 16, 2014 in child maintenance, spousal maintenance by Alan Larkin | No comments

 

Postbox

 

My virtual postbag brings me a question from P: a common question about the relationship between the payment of child maintenance and cohabitation.   P obtained a consent order dealing with financial matters arising out of divorce.  The only problem being that her ex has interpreted the terms of the consent order in a way that has a detrimental financial impact upon P.  She tells me:

“Paragraphs 2&3 are relevant. My ex-husband believes that because I have been cohabitating with my new partner for 12 months (2c) he has no legal obligation to pay child maintenance (paragraph 3).”

There is often confusion on the part of maintenance payers between spousal maintenance and child maintenance.  Spousal maintenance is paid by one spouse to the other after divorce.  Lawyers refer to it as spousal periodical payments.  Let’s have a look at the relevant paragraph in P’s consent order that requires her ex to pay her spousal maintenance:

screenshot of consent order

 

OK.  So we can see here that there is a reference in paragraph 2 c to P’s spousal periodical payments terminating in the event that she cohabits with another for a period of 12 months.  Cohabitation with a new partner can be a common terminating event for spousal maintenance.   Let’s then look at an entirely separate paragraph dealing with child maintenance (referred to as periodical payments):

 

screenshot

 

The order requiring P’s ex to pay child maintenance to her for the benefit of their child is entirely separate (as I would expect) from the paragraph dealing with spousal periodical payments.  The payments of child maintenance cease when the child reaches age 18 or ceases full time secondary education.  The payments of child maintenance DO NOT CEASE if P cohabits with another for a period of 12 months.  Unfortunately, P’s ex has misunderstood the terms of the order.  He has linked the child maintenance and cohabitation.  It is P’s spousal periodical payments that have ceased (or will cease) upon 12 months of cohabitation.  This has nothing to do with child maintenance.  But that misunderstanding has a serious financial impact upon P’s child.  The payment of child maintenance and cohabitation are not linked in this consent order.

Perhaps P could refer her ex to this blog post so he can see how the confusion has arisen.  He should then reinstate the payments of child maintenance for his child.  At the end of the day, these payments of child maintenance are not for P’s benefit but for the child.

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Inheritance Act Claims

January 10, 2014 in child maintenance, spousal maintenance, Uncategorized by Alan Larkin | No comments

 Inheritance Act 1975

My virtual post bag brings me a very sad enquiry involving potential Inheritance Act claims. I will refer to my enquirer as ‘C’ – who tells me:

My ex husband died by suicide a couple of weeks ago, I have custody of our 2 children 14 and 16 years old. We had a maintenance agreement for many years, however last year he lost his job so my maintenance payments stopped. However in our divorce/maintenance papers it states that a provision has to be made in his will to support his children should he die.

Now I have never seen his will and have no idea what it states or even if there is a will. He remarried a few years ago. I nor my children has NO relationship with his wife to the point where his children have not been invited to his invitation only funeral. Due to the lack of maintenance for the past year I have no funds to engage a solicitor to help me, so I have been reading as much as possible online where I came across your site. How can I

1) Find out if a provision in his will for his children has been made

2) What can I do if there is no provision or will?

I know you cannot give me personal advice but any suggestions of where I can start would be gratefully received.

What an awful situation for all involved.  It is particularly sad to read that C’s children will not have the opportunity to say goodbye to their father at the funeral. The death of a parent at their age will be very hard on them and the particular circumstances of the death doubly so.  I sincerely hope that the children will be able to make their farewells in due course in a manner appropriate and helpful for them.  C and her children may obtain assistance from the Childhood Bereavement Network which has a helpful directory of local services across the country.

Inheritance Act Claims

As C recognises, I don’t provide legal advice on this blog.  And, in this case, as in so many others, I am not in possession of all the information.  But I can make observations of a general nature which may help C, her children, and others who find themselves in similar positions.  It is likely that a number of potential Inheritance Act claims arise.  By Inheritance Act, I am referring to the Inheritance (Provision for Family & Dependants) Act 1975.  Have a look at my previous post on a query involving the Inheritance Act for more details.

  • It appears that that both C and her children could have Inheritance Act claims. But, in relation to C, she may only make a claim if she has not re-married. C may claim because she is an ex-spouse of the deceased who had the benefit (even if not being paid) of a spousal maintenance agreement still in existence at the point of death.  The children had child maintenance agreements of some sort.  It is, of course, very important to know whether the maintenance agreement was a private arrangement between C and her ex (perhaps in the form of a deed) or whether the family court gave an order, even by consent, setting out the terms of the maintenance payments.
  • The fact that the deceased may not have been making payments before and at the time of death does not stop C making a claim on her own behalf as a dependant.
  • C’s children, being minors, would need a Litigation Friend (someone who can step into their shoes for the purposes of legal proceedings) in order to take advice about any possible claim or to ask solicitors to take steps on behalf of the children in any court proceedings.  It is likely that C could also act as Litigation Friend in any proceedings on behalf of her children.  There can sometimes be a potential for a conflict of interest between a parent who is claiming against an estate and that parent’s children who are also claiming.  This may mean in some cases that there are separate solicitors for the ex-spouse and her children.  And the Litigation Friend may be another relative who can exercise judgement independent of the parent.
  • Whilst the court may allow Inheritance Act Claims to be brought, it does not mean that they always succeed.  Crucially, much will depend upon the size of the deceased’s NET estate (i.e., what is left after all the debts have been paid).  If it is relatively small, it follows that there will be little to go around and a court may be reluctant to interfere with the Deceased’s Will by diverting funds away from the widow and towards an ex-wife.  The children’s financial position would, however, still deserve serious consideration even in a small estate.
  • Whether a claim will be successful does not just depend upon the value of the estate.  The court will have to look at the circumstances of C, her children, as well as the widow, and any other beneficiaries under a Will who may lose out if C makes a claim.
  • C is not sure if her ex had a Will.  The quickest way to find out (but I’m not saying it’s the easiest) is for someone to ask the widow.  I have no idea if the relationship between C and the widow is a good one.  Let me guess, from what C tells me, that the relationship is poor or non-existent.  But the widow could be asked, perhaps sensitively by a third party if necessary, about the Will.  But, otherwise, I’m going to presume that C will get little or no information or response from the widow and therefore has to consider how best to protect herself and her children.
  • C tells me that in the “divorce/maintenance papers” it states that provision had to be made in the deceased’s Will to support his children in the event of his death.  I haven’t seen the agreement (or the court order if this is what it is).  It is possible to give an undertaking (a form of solemn legal promise) to make provision in a Will for somebody else on certain terms.  Such provision may even be irrevocable – that is, once you have made the change to your Will, you can never undo it.  If you tried to undo it or, after your death, your estate tried to retreat from your undertaking, the person or persons with the benefit of the undertaking can apply to the court to enforce that benefit.
  • I don’t know if the provision agreed to be made by the deceased in his Will was for a specified amount for the children – it it was for a specific sum and the Deceased’s last valid Will does not contain this provision then at the very least, the children should recover that sum from the estate.
  • C needs to find out if her ex has a valid Will.  The deceased re-married of course, which would have had the effect of revoking his prior Will (unless it was drafted in a certain way).  I wonder how many people know that?  So, there is the possibility that the deceased made the provision in his Will, as agreed with C, for his children, but then re-married without being aware that he had revoked his Will.  So, after the remarriage, it is to be hoped that the deceased then made a new Will and remembered to include the provision for his children.  The question is whether that provision is reasonable.  If the NET estate is worth £100,000 and he has left £100 to each child, it may be imagined that a court would not regard that as being “reasonable provision”.
  • But what if C’s ex did not make a new Will after re-marriage?  In this case there would be an intestacy.  The present rules on intestacy mean that ex-spouses do not benefit at all.  Children will only benefit if the estate is worth £250,000 or over.  If the estate is worth less than this then only the widow will benefit.  But remember that Inheritance Act claims can be brought where the operation of the intestacy rules means that reasonable provision will not be made for a claimant.  So if the deceased estate is intestate, and is worth less than £250,000 meaning the children get nothing, they can claim under the Inheritance Act.  As can C.
  • One issue that can arise is the value of the deceased’s home.  If it is jointly owned legally and beneficially with his widow then upon his death the property would be automatically transferred into her name.  If this is news to anyone then have a look at my post explaining the crucial difference between beneficial joint ownership and a tenancy in common.  If the property has automatically been transferred to the widow by the death of the deceased, then its value (which may of course be significant) will not appear in the NET estate.  It is possible in certain circumstances when applying under the Inheritance Act, to ask the court to exercise its powers under Section 9 of the Act to bring the value of the property belonging to the deceased (nominally 50%) back into his NET estate so any claimants can have their claims satisfied.

Next steps for C?

It would be prudent for C to consider the following action:

  1. Contact the widow, preferably in writing  so there is a dated record, to enquire about her ex’s Will and the provision that has  been made for the children, as previously agreed, and putting the widow on notice (respectfully and politely) about C’s possible claim as a dependant.
  2. If the children are beneficiaries under any valid Will, then the executors must let C (as the parent) know that the interest is in place and the value of any specific legacies (a fixed monetary sum or item of property).  If the interest is in the residue of the estate (what is left after all the debts are paid and the specific legacies have been met, then C will be informed in due course.  It is likely that the ex will have left the residue of the estate to his widow but, again, I simply don’t know.
  3. Straight away, C should look back at her divorce papers to see what record she has of her ex’s pensions and the addresses of the trustees or administrators.  I don’t know whether C had any pension sharing orders or not at the point of divorce.  In most pension schemes it is possible to make a nomination of a spouse or children to receive death in service benefits should you die before receiving your pension.  Although no longer a spouse, C should advise any relevant pension schemes of the existence of her minor children in case her ex made a nomination to their benefit.  Even if her ex did not make such a nomination, pension trustees can exercise their discretion in favour of spouses (probably not ex spouses but you don’t know if you don’t ask) and children.  This step needs to be taken quickly in any event.
  4. The suicide may have invalidated any insurance policies – I don’t know.  But in some cases, parents who have to pay maintenance agree to take out insurance to cover the loss of the payments in the event of their death.  This agreement would normally be detailed in a court order.  If such an agreement, and a subsequent policy, is invalidated by the suicide, then it should act to strengthen the likelihood of successful Inheritance Act claims, provided there is still a reasonable amount of value left in the estate.
  5. C can make an application for a Standing Search of the probate registry.  This will tell her when an application had been made and granted for her ex’s estate to be administered, either under a Will or under the intestacy rules.  If an application has been made, C will receive a copy of the Grant and a copy of the Will.  It is unlikely that a grant will have been applied for already but the usefulness of the standing search is that it stays in place for 6 months so if a grant is given in the next 6 months, C will find out about it.  C can renew her standing search for a further 6 months each time.  C has six months from the date of the grant of representation to make any claim against the estate.  A claim outside of this time may not be successful.  This is called a limitation period and should not be ignored.  The standing search is a nominal fee – £5.00 the last time I had to use it for a client.
  6. C should try to obtain legal advice.  This area is complicated but C may be able to get a free consultation with solicitors local to her.   C will have to make sure that they have experience of Inheritance Act claims.  If it appears that there is a potential claim on C’s  behalf and/or her children, her lawyers may be able to obtain funding from a litigation provider or may be prepared to fund the case and take their fees at the end if it is successful. As far as I am aware, there is no longer any legal aid funding for such cases so it is necessary to think through what other funding options may be available.  Although legal aid is  still available for mediation, I have not heard of many mediators dealing with Inheritance Act claims.  Even the mediators who are also family lawyers, probably have little experience of Inheritance Act disputes.

I hope this post provides C with some assistance.

 

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Divorce calculator for simple interest

April 26, 2013 in child maintenance, cohabitation by Alan Larkin | No comments

 

Divorce calculator simple interest

 

As I confessed in an earlier post, I can’t resist a good divorce calculator.  I was talking then about a divorce calculator for journey costs.  The thingymajig  below calculates simple interest on a given sum. I know, you could probably do the maths in your head, but in a lighthearted way, I want to highlight the usefulness of interest in divorce and separation cases.

 

A divorce calculator for interest

 

  • In a divorce settlement, your spouse may offer to pay you a lump sum.  The lump sum may be to compensate you for, as an example, transferring over the interest in the matrimonial home.  But the problem is, your spouse says you will will have to wait for the whole sum or part of it.  If you agree to wait then the money is not sitting in your account earning interest.  Yes, I know that savings rates are rubbish but, in the legal world, cash is king.  If I am going to agree to my client waiting to get their hands on an agreed lump sum I will ask for interest at the court rate.  That, by the way, is 8%.  Yes, I do mean 8%.  If you can find a savings account offering anything near 8% then I’m a monkey’s uncle.  So demand interest.
  • You have separated from the partner of your children.  You want to agree child maintenance.  You realise that inflation will eat into the value of the payments as time goes by.  So, you agree to increase the payments on an annual basis by a set percentage.  The figure is up for agreement although you can of course vary it each year.  Inflation last year was 2.7% so you would want to agree at least 3% to keep pace with inflation.
  • In a divorce or a co-habitee separation one of the parties pays off a joint debt.  It is agreed that half of the sum paid out will be reimbursed but there is a worry that the commitment to repay may fade with time.  You can agree to apply a relatively high rate of interest on the unpaid sum so there is an incentive not to delay payment.  Example: John has a credit card debt of £7,000.  It is agreed with his ex-partner, Sue, that at least £6,000 of that sum was for joint spending.  John agrees to pay off the whole sum but Sue will owe him a ‘credit’ of £3,000.  Sue does not seem very focussed on when or how she will re-pay John the £3,000.  So, before paying off the credit card liability, John and Sue agree that he will be paid back the £3,000 within 28 days.  But in the absence of payment at day 28, interest will run at 8% until it is paid off.  Sue therefore needs to get a move on.

I will try to track down some other calculators that I think might be useful in a family law situation. Don’t knock it – it keeps me off the streets.

 

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Child support: arrears of maintenance

November 27, 2012 in child maintenance, spousal maintenance, Variation maintenance by Alan Larkin | No comments

I have visited the topic of child support on many occasions. My virtual postbag this week has several examples of one common scenario: where the husband and wife start off by getting it very right, with an appropriate order for child maintenance upon divorce, but then, somehow, it goes very wrong.  The sad thing is, it goes wrong, very often, because of a basic misunderstanding. Most of this should be avoidable.

To the postbag…

Suzanne writes:

 

I have a court order (payable by standing order monthly) which has been running for 8 years. After the first year my ex husband refused to pay the yearly increase, and has been paying the same amount ever since. I have now requested that he increases the maintenance but he still refuses to do this.  Can you please advise what the yearly increase should be as I have no alternative but to take this back to court.
Also will he have to pay the arrears?

I have re-married two years ago, would this affect the payments?

Child maintenance

Suzanne later confirmed to me that this is a case of child maintenance.  In which case, Suzanne’s re-marriage is of no consequence whatsoever.  The child maintenance must be paid in accordance with the terms of the court’s order.  It is a great pity that the ex-husband has failed to observe the increases each year ordered by the court.  In the first place, the order for child maintenance would only have been in a court order if the husband agreed to the family court having jurisdiction for dealing with child maintenance (instead of the CSA).  Secondly, he would have agreed to the yearly increases (normally by reference to inflation measures like the Retail Prices Index) as he must have recognised that the cost of living – especially in relation to kids – only goes up and never down.  So his refusal to honour the increases he agreed is disappointing.  As I have commented before, the costs of bringing up children is usually underestimated.

Suzanne has asked me what the yearly increase should be.  Unfortunately, I cannot calculate that without knowing the amount of the original award, the date it was awarded and the mechanism used in the court order to determine the yearly increase.  But, I have laid out in previous posts how to calculate the yearly increase and also how to calculate the amount of arrears that have arisen when the yearly increase is ignored.  Click on “RPI” in the Tag Cloud on the left hand side of the web page: this will bring up all my previous posts on this issue. 

One issue here, if this is a child maintenance order, is that in the case of a disagreement over the amount of child maintenance, the family court responsibility comes to an end and the parents will have to look to the CSA.  The usual scenario is that one parent wants to receive more or one parent wants to pay less.  This would require a variation of the original order for child maintenance and this variation must also be by agreement.  But, in Suzanne’s case, she is not talking about changing the amount of the original order but rather simply requiring that her ex pays the yearly increases he promised. Suzanne, if she gets legal advice, may be told to apply back to the court to enforce the payment of the arrears.  But you have to get the court’s permission to recover more than the last 12 months of arrears.  The application is made on Form D11 (Family Procedure Rules, 2010, Part 18).  Suzanne would need to set out her calculation of how those arrears had arisen.  This is not that easy but look at my previous posts in the Tag Cloud for “RPI” and “Child Maintenance”.

The alternative for Suzanne if she wanted, would be to refer her ex-husband to the CSA so they could carry out a fresh assessment of the amount of child maintenance to be paid.  The CSA would not be able to recover the arrears for Suzanne under the court order but I suspect the ex-husband would end up paying more towards his child or children under a CSA assessment than under the court order which is now 8 years old and has not been increased each year.  The CSA may refuse to act though if Suzanne’s child or children are too close to the age of 17 (when CSA responsibility comes to an end).  I don’t have enough detail here to make any further comment.

So, if Suzanne took legal advice, it may well be that she should apply to the court to enforce the arrears.  Remember, that her ex could refer himself to the CSA and if they took responsibility for the situation then the family court order dealing with child maintenance comes to an end, and with it, any prospect of recovering any arrears.  So Suzanne may want to get her application into the court for enforcement first, and recover as much of the arrears as possible.  Since her ex will then have to disclose his present income in those proceedings, she can ask her legal advisers to calculate how much he would pay if the CSA were involved. She can then take advice upon whether to refer the child maintenance to the CSA from that point onwards if the award would be higher than she presently receives under the family court order.

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Divorce calculator: Journey Costs

October 26, 2012 in child maintenance, Form E, spousal maintenance, Variation maintenance by Alan Larkin | No comments

Journey cost calculator for Divorce Finance Toolkit

I like calculators. They are really useful when you’ve run out of fingers to count on.

This is a journey cost calculator. In many divorce and separation cases the earned income has to stretch a long way. Here are a few scenarios where this calculator may prove useful:

    1. If you are divorcing and making a financial claim you will probably have to complete a financial disclosure questionnaire called a Form E. It asks for all sorts of information on people’s finances and one of the sections in particular is called income needs. Invariably, at first attempt, many people underestimate their true levels of expenditure. This calculator can help to focus on the true cost of the mileage that may be clocked up in getting to work.
    2. Or, you are negotiating with your ex over the amount of spousal maintenance or child maintenance that should be paid. One of you may require a car to get to work. That wage may be providing for maintenance payments. The cost of getting to and from work can be significant with the cost of fuel at the moment. This calculator may help to show just how much is being spent. This unavoidable cost could be factored into the discussions.
    3. Or a level of maintenance has been agreed and in place for a number of years but the paying or receiving party has a change of circumstances involving more motor travel, perhaps in relation to a work relocation. So the calculator could assist in showing why the change of circumstances means an adjustment in maintenance is required.
    4. Another scenario is where contact to children is being discussed. One of the parents may have to do a fair bit of mileage over time picking up or dropping off the kids for contact. It is a cost that could demonstrate why the parent paying maintenance will struggle unless this essential expenditure is taken into account. Or, for instance, if it is a mother working part-time and doing most of the motoring around to allow contact, why the maintenance she is receiving may need to have an element in it to cover this cost of travelling.

Ideally, I wish I could find a calculator that would allow road, tax, servicing and insurance to be incorporated but no luck so far.

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Childcare costs and minimum needs

September 10, 2012 in child maintenance by Alan Larkin | No comments

Signposts for future childcare costs can be confusing

It is really important for spouses or partners, when separating or divorcing, to consider the needs of their children.  Most family solicitors will focus on the childcare costs and ensuring that these costs, which are significant, over the years of a child’s minority, are met.

One of the difficulties in brokering such agreements is the perception sometimes encountered from the payers of maintenance that they are paying far too much.  Surely a child can’t cost that much to house, clothe and feed? The data available to lawyers is not always helpful and tends to focus on higher income families who may be looking at private school fees.

It is therefore timely, in light of present and future austerity planning that The Child Poverty Action Group (CPAG) has just published research (with the help of the highly respected Joseph Rowntree Foundation) highlighting the costs of meeting a child’s minimum needs up to age 18.

Summary findings from the research

  • It costs £143,000 in total to bring up a child to age 18 and meet their minimum needs, which is around £150 a week (averaged for a child across all ages and including childcare costs and housing).
  • The basic cost of raising children has risen faster than inflation (CPI) in recent years, meaning that with wages falling behind and benefits being cut, Britain is moving backwards for the prosperity of our children. 
  • Childcare can add as much as £60k to the total cost of childhood. Childcare is one of the factors most responsible for the costs of children’s needs rising faster than inflation. The main state support for childcare costs is through tax credits and it was cut by 12.5% in April 2011. 
  • State support fails to ensure basic physical needs are met, leaving many families lacking sufficient funds for a healthy diet for the whole family and living in unhealthy housing conditions with problems like overcrowding and damp. The maximum support available only meets between 73% and 94% (depending on family composition) of basic costs for children.
  • A full-time job on National Minimum Wage is not enough to meet minimum costs for children. For single parent families, NMW leaves them with 89% of the basic requirement; and for couple families it is just 82% of the basic requirement (this is after benefits and tax credits have been included).
  • Child Benefit meets only 20% of childhood costs on average for couple families and just 18% for single parent families. Child Benefit has been frozen since 2010 and will have lost 10% of its value by 2014. Since the war, universal support with the cost of a child, first through family allowances and then child benefit, has been our national public commitment to all children. This universal arrangement will come to an end next year.
  • Having children leaves adults on benefits worse off. Additional state support for families with children is lower than a child’s minimum needs, so families face a growing shortfall with each child. Parents react by spending less money on themselves; in some cases parents will even skip meals so that their children don’t go without. If a single parent of three children used his/her adult benefit income to top up the child-related benefits so the minimum needs of the children are met, they would have just £12 a week to meet their own basic needs.
  • The cost of a child rises as they get older (excluding childcare costs). This is because of increased consumption needs – e.g. more food – and also because people believe children are less able to share a room with younger siblings once they reach adolescence. 
  • Costs are higher for single parents and, since cuts were implemented in 2010, the deterioration in income for single parents is worse than for couple families. A single parent has £107 less than they need and £166 less if they have three children.
  • Parents have modified their own expectations since the recession with fewer meals out and fewer presents for each other. Parents clearly prioritise children’s needs over their own. All acknowledge that life changes when you have children, you make more sacrifices, eat out less, life is less spontaneous and holidays abroad often come to an end. Parents also have less time available.

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Child support and the Lottery

June 19, 2012 in child maintenance by Alan Larkin | No comments

Simple childhood pleasures - sometimes free

 

Child support issues and the CSA feature heavily in my postbag nearly every week. Disputes about child support occur whether the context is one of divorce, or separation following co-habitation. Children are expensive.  One of the difficulties is that the economic circumstances of both parents can change, sometimes dramatically, during the minority years of a child and the CSA or the family court can struggle to keep up.

I received an interesting enquiry from Joan:

Hi….wondered if anybody could help. I have a daughter who is now 15, when she was 18 months old her father & I split up. He saw her a handful of times after that & has never paid any maintenance.

In 2004 he won the lottery. I separated from my ex husband & made contact with my daughters father & she started to see her dad. The CSA did an assessment at the time (it was automatic as I was on Income Support)but they said they could not trace any income even though he had properties interest from his earnings!…Being non confrontational & then finding a job I decided not to push the situation plus I felt uncomfortable with the fact that people may think that I was out for his money!

He has helped with paying for her holiday a couple of times but that’s about it (all in all approx £1000 max-Coutts & co cheques!) Things have moved on and financially we’re struggling and think it’s about time now that he helps out. Don’t know which way to play it, contacted him but had no response….surprise surprise!!…advice please 🙂

Well, as usual, I must emphasise that I do not offer ‘advice’ on this blog.  I can’t: simply because it would dangerous to do so when I do not have possession of all the facts.  But I can offer some observations.

The CSA are presently dealing with your daughter’s maintenance.  You can talk to them about any concerns you have about your ex’s non-disclosure.  But I could indulge in a bout of speculation to the effect that once he had his lottery win he may have organised his finances in such a way that the CSA could not take into account all the interest he earned from certain sources.  In some cases, business assets (rather than investment properties) can be excluded from the deemed income or interest regulations.

Your ex banks with Coutts.  Well, that’s rubbing it in, isn’t it? Coutts used to require new customers to have investible assets (i.e. money knocking around that could be placed with the bank) of at least £500,000.  It went up to £1M recently.  Whilst Coutts will say that this criterion is only a guideline, the key is that your ex must have had significant funds (non-business assets) to invest or hold with Coutts to have obtained an account.  Did you tell the CSA he was banking with Coutts?  That should have at least raised eyebrows at the CSA.  Your ex may demonstrate a lifestyle inconsistent with his declared income.  Perhaps he is married and has diverted the lottery capital or income to his wife?  Press the CSA again and consider a complaint if they are not taking you seriously.

Regardless of whether the CSA will take steps to properly investigate your ex’s financial means, you could make an application on your daughter’s behalf under Schedule I of the Children Act 1989 for lump sum orders and property adjustment orders.  You have probably left it too late to ask the court to consider an order requiring your ex to buy or provide a property for you and your daughter to live in as she will shortly be coming to the end of her minority.  (But I don’t know all your circumstances or your daughter’s so you must take advice).  But you can apply for multiple lump sums for various needs your daughter may have, to do with health, disability or education, for example.

An application to the court on your daughter’s behalf would require your ex to provide financial disclosure which may be very interesting.  The family court can take into account all of your ex’s assets and income in deciding the appropriate orders.

However, you should take advice upon the timing of any application.  Because, your daughter, when she attains the age of 18, can make an application on her own behalf under Schedule 1 of the Children Act, for periodical payments (maintenance), property adjustment orders and lump sums, if she is in education or vocational training and providing she did not have immediately before her 16th birthday a periodical payments order in force for her benefit.  So, it may be worth just waiting until your daughter is 16 before you think of applying on her behalf so you do not prevent her applying in her own right later on.

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Child support: excluding the CSA

May 26, 2012 in child maintenance, Self-Representation, Variation maintenance by Alan Larkin | 1 comment

Child support: excluding the CSA

Full of cheer? The Christmas Order

Self-represenatation in family proceedings is difficult.  Many litigants in person, or ‘self-reppers’ find it hard to fund legal advice from a family specialist.  This is particularly so where the only dispute may be about an income claim such as child support because it is not as if you may recover a valuable asset or receive a lump sum out of which you can repay your legal fees at a later date.

When faced with a self-repper, a family solicitor (who, we must remember is an officer of the court) should try to assist the litigant in person to understand the process or the proposal being made.  This is not to say, that the solicitor must advise the self-repper: they cannot do that as it would be a conflict of interest with their role as an advisor to their own client.

I have a great deal of sympathy for self-reppers, as may be evident for any regular readers of this blog.  When facing them in court I go out of my way to be courteous and helpful, mindful always of the stressful nature of the proceedings in which we are all involved.  I have sometimes had self-reppers throw doubt upon my parentage, but I don’t mind as I know, in most cases, it is just the pressure of the situation getting to them.

Unfortunately, this pressure of the occasion at court can cloud the judgment or even hinder the understanding of self-reppers.  This is presuming of course, that the lawyer on the other side of the self-repper and the judge have sufficiently explained the situation to the self-repper.  This is the subject of a recent enquiry from a ‘troubled mum’:

My son settled in court to pay a woman he had a one night stand with £750.00 per month. This was at a stage 2 meeting. My son had to represent himself because he could not afford the legal fees. The barrister representing the applicant explained the order was a “christmas Order” which meant it could be looked at again if my son were to win the lottery or found himself without a job ( I was there I heard the barrister say this) We now have received a typed up copy of the court order that we agreed on the 3rd May to let a legal person look at it. We have been informed the words “Christmas Order” means it automatically goes up each year which we were definately not informed that this was the case. Can we ask the court to take out that clause because we were informed wrongly of its meaning please help this is a nightmare regards very troubled mum

As ever, with many of the enquiries I receive, I do not have all of the detail but my initial thoughts are as follows:

  • I wonder why this matter was not dealt with by the CSA.  The child’s mother could simply have referred the case to the CSA to make a maintenance assessment and fix the amount of child support.  No need for her to pay for a barrister (unless she had public funding – or legal aid).
  • Since the CSA were not involved I am presuming the case before the family court was under Schedule 1 of the Children Act 1989 which can provide for financial orders between unmarried parents for the benefit of their biological child.  Such orders usually being:
    • Periodical payments (or child support)
    • lump sum orders (there can be more than one)
    • a property adjustment order (the provision of a house for the child and mother to live in) although the property will in most cases revert back to the father when the child reaches the age of majority.
  • If this case was being brought under Schedule I Children Act proceedings, then the father in this case could have referred himself to the CSA and the family court would no longer have the ability to make a periodical payments order.  The family court could still have made a lump sum order or a property adjustment order but whether the father had the financial means to meet such orders is not mentioned in the enquiry.  I suspect not.
  • The father has agreed (remember that the family court can only approve a child support order if it is with the consent of both parents) to a ‘Christmas Order’.  I have used such orders before but from memory I have only done so when my client’s spouse or partner has had legal representation.  This is because the Christmas Order attempts to oust the jurisdiction of the CSA (which, technically speaking, is against public policy).  Readers of this blog may remember that a court-approved child support order may only have a shelf life of just over 12 months because either parent can then refer the case to the CSA to take over and the family court order bites the dust.  A ‘Christmas Order’ is designed to automatically renew itself just before the 12 month period lapses so it is as if a new order is born out of the ashes of the preceding order each year.  Because the order never quite gets to be one year old before being renewed each year the CSA never gets to have jurisdiction.  The month of automatic renewal is usually December: hence the Christmas connection.   Clever. Unless you did not understand what you were signing up to.
  • A Christmas Order can be quite helpful in some circumstances but, as I mentioned earlier, I am troubled if the father of this child did not have a clear understanding of what he was agreeing to.  Without his consent this order could not have been made. Even if the barrister had not explained it clearly enough, I would have thought the judge, who approved the order, would have explained very clearly to the father what the Christmas Order entailed.  After, all it is an unusual order so the burden upon the barrister and the judge to assist the self-repper in this case is, in my view, even higher than normal.
  • The ‘troubled mum’ behind this enquiry and her son then consulted a ‘legal person’  with the result being: “We have been informed the words “Christmas Order” means it automatically goes up each year”.  That’s not right.  The Christmas Order operates as I have explained above: it automatically renews itself each year in such a way as to prevent the CSA having jurisdiction.  It would only go up in value each year if there was a specific clause saying that it will increase in value.  The normal mechanism for this to happen is to link the child support payments to the increase in the Retail Prices Index (RPI).  I have tried to explain how this operates in a number of posts on this blog. Again, I am troubled if the father in this case did not know he was agreeing to an automatic increase in the value of the payments each year.  Don’t get me wrong, I think such automatic increases can be a good thing but it is essential that all the parties (especially self-reppers) understand what they are agreeing to.)

Although I must reiterate again that I cannot advise anybody on the pages of this blog, one option open to the father is an appeal against the court order.  It will be an appeal against a consent order which makes it difficult to say the least but it may be worth a try if the father is certain that the order was not explained to him by the judge and that if it had been explained to him, he would not have agreed to it. The guidance for making such an appeal is here.  However, the usual time period for making such an appeal is 21 days from the date of the order so that time period has already passed.  It is, however, still possible to make the application to appeal (out of time) and the father may be given more leeway because he is unrepresented.

BUT: remember that such an order is variable.  That is, if there is a significant change in the father’s circumstances such as the loss of a job or a significant pay cut then it is possible to have the amount of the maintenance varied downwards on an application back to the family court.  At the same time the court could be asked to simply drop the automatic renewal (the Christmas Order) aspect of the child support so that it could, if either parent wanted to, fall back within the jurisdiction of the CSA in the future.

My inclination, if this father needed to vary the order in the future, would be to invite the mother of this child to mediation.  Much less stressful than contested proceedings.

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Enforcement of maintenance orders abroad: USA

May 20, 2012 in child maintenance, Enforcement, International famlly law, spousal maintenance by Alan Larkin | No comments

Child support enforcement

Over the hills and far away

It is not uncommon for divorce proceedings in the English jurisdiction to involve a spouse who lives abroad and child support issues are usually one of the main concerns.  How do you obtain a divorce financial settlement including child support if your ex is not willing to negotiate? The Maintenance Orders (Reciprocal Enforcement) Act 1972 may help.

This is the subject of a recent enquiry from Sarah (not her real name)

I am divorcing my husband who lives in USA – the divorce case is in UK. I first contacted my solicitor last year in may and this has been taking a year now just to get divorce – i am not asking anything financially from my husband even knowing how much i am entitled to, however i want him to start paying child support which is 15% from his income as i have been advised from my solicitor. i tried to negotiate but my soon to be ex husband is not paying. how long will it take if i issue proceedings? thank you!

To be honest, I don’t know how long it would take if Sarah issued proceedings.  It depends upon the type of proceedings, the foreign jurisdiction she is dealing with and the speed of her lawyers,  but I suspect it will not be quick for reasons I will explain shortly.  International claims for financial relief are a notoriously difficult area to navigate even for highly experienced family lawyers.

Back to basics…

It sounds as if Sarah has done the right thing first which is to try and negotiate the level of child support.  Unfortunately, her spouse is not playing ball.  There are few things more unattractive than a man who won’t take financial responsibility for his child or children.  So what can Sarah do?

In the English jurisdiction, for the great majority of cases in the family courts involving child support, the court only has power to give an order if the spouses are in agreement.  In the absence of agreement, the CSA has the power to carry out a determination of the absent parent’s net income and demand payment on the basis of a formula.  In Sarah’s case, since her solicitor advises she should seek 15%, I deduce that Sarah has one child with her husband. (The CSA will seek 15% of net income for one child, 20% for two and 25% for three or more children). In general terms, the CSA only has jurisdiction for parents who live in England and Wales.

But the CSA can still retain jurisdiction for the absent parent if:

  • the absent parent is in the armed services; or
  • working for the UK government; or
  • employed by a UK registered company

I’m presuming that none of these categories apply in Sarah’s case.  So if Sarah can’t negotiate with her husband and the CSA don’t have jurisdiction, then she will just have to issue in the English court to get child support, right?  Not necessarily.

 Transmission of a claim?

If Sarah issues financial proceedings in the English courts – and it would normally be in her local Magistrates’ Court (also called a Family Proceedings Court) and obtains an award of maintenance (for child support) against her husband then she will need advice upon how to enforce it in the USA.  But Sarah should consider, if she has not already, the ability to transmit her claim for maintenance rather a final order for maintenance to the USA and to ask the court there to initiate the claim for child support against her husband.  To my knowledge, the American states give the choice of transmission of the claim or the enforcement of an English order.  It may be more advantageous to Sarah to transmit the claim to the American jurisdiction rather than have her English lawyers pursue it here and then seek to enforce in the States.

Sarah should test the water by googling family law attorneys in the state where her husband resides and then sending an email to several of them asking them to weigh up for her the benefits of transmitting her claim for child maintenance or enforcing a final order for that maintenance from the English Court.  This feedback will assist her English lawyers to decide the best course of action for Sarah.

Enforcement of final order

Whether Sarah is advised to transmit her claim for child maintenance or whether she obtains a final order first in England and then seeks to enforce in the USA, she will have to follow pretty much the same procedure.  Her solicitors will need to contact the REMO (Reciprocal Enforcement of Maintenance Orders) unit at the Office of the Official Solicitor and Public Trustee.  REMO is a central authority for international maintenance claims in England & Wales.  The good news about this approach is that most of the enforcement is undertaken by way of liaison between governmental departments (in the English and foreign jurisdictions) so it will often be free.

Since Sarah is looking to get financial support from a husband in the US, I’m sure her solicitors will have regard to the Reciprocal Enforcement of Maintenance Orders (United States of America) Order 2007 which allows for a UK order for maintenance to be enforced provided the payer is resident or has assets there.  Equally, if Sarah and her advisers conclude that the transmission of her maintenance claim to the US is the better option then they will consider The Recovery of Maintenance (United States of America) Order 2007.

Finally…

Sarah states that she is not asking for anything financially from her husband (apart from child maintenance).  I’m not sure why not, if she really needs it and if her husband can pay.  The Maintenance Orders (Reciprocal Enforcement) Act 1972 deals with spousal maintenance as well as child maintenance.  I’m just saying…

 

 

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Child maintenance orders and the CSA

April 28, 2012 in child maintenance by Alan Larkin | No comments

Equality of arms and divorce outcome can be undone by a CSA assessment

Every divorce should result in a clear financial settlement.  Whether the family court order is given by consent or handed down by a judge at final hearing, each spouse should have negotiated a divorce settlement that makes sense in the round.  No one wants a coach and horses to be driven through a delicately balanced court order just months after it is given.  It wouldn’t be fair, surely?

This is the situation facing Jane, who asks me:

Please can you tell me whether I am able to take my ex husband back to court to enforce the court order for child maintenance that the CSA have reassessed and reduced.  There has been no change in his circumstances other than a salary increase but he no longer wants to pay what was agreed in our settlement and has reduced payment by £300 per month. He only pays for the children, I have no claim on pensions etc. and he does not pay me maintenance. I gave him £20,000 on divorce based on what he would pay for the children. He has now been able to disregard the court order but, of course, has not returned any of the money I gave him. It just seems unethical to me and leaves us in dire financial straits.

I would like to know whether the CSA have the final say on this matter or whether I can go back to court to challenge their decision.

Jane’s child support enquiry reflects one of the great problems for divorce clients who have reached what is hopefully a carefully balanced divorce settlement taking into account capital claims and income claims, including spousal maintenance and child maintenance.  The problem is this: even if there has been a family court order for child maintenance made at the time of divorce, provided the order was made after 3rd March 2003 and has been running for more than one year, then either spouse is able to ask the CSA to deal with the child maintenance aspects.  The child support element of the family court order is therefore made redundant.   The family court can no longer deal with the child maintenance element.  That carefully crafted and balanced family court order is now in danger of looking very lop-sided.

It would appear from what Jane tells us, that the £20,000 lump sum she agreed to pay her ex-husband was more than she would have agreed to, if she had known that the amount of child support maintenance she would receive in the short to medium term would be reduced.  I do not know how much Jane was receiving under the original court order but I’m guessing that the reduction of £300 a month is an absolute killer.

Jane`s ex-spouse will now be assessed to pay child support by the CSA until the children reach the age of 17 (or 19 if they are in education or vocational training).  The family court will have no further role to play on child maintenance – unless there are some exceptions, such as the costs of meeting the needs of a severely disabled child, which do not appear to arise in Jane’s circumstances.

Jane tells us: I gave him £20,000 on divorce based on what he would pay for the children. He has now been able to disregard the court order but, of course, has not returned any of the money I gave him. It just seems unethical to me and leaves us in dire financial straits.  I have not seen the order Jane obtained from the family court, I do not know whether it was given after a disputed final hearing or by consent.  If solicitors were involved then as advisers for Jane they should have warned her of the possibility of her ex-husband being able to involvethe CSA at a later date.  Clearly, Jane`s ex had calculated that he would pay less under the CSA regime than the amount of child maintenance he had agreed to meet under the family court order.  It is important to note that the family court cannot give an order for child maintenance unless both parents are in agreement for the order to be made.  So, if I understand Jane correctly, there may well have been an arrangement for the payment of 20,000 provided that child maintenance at the agreed level continued to be made.

The value of (good) lawyers?

This is where the lawyers are meant to earn their corn.  If Jane had divorce lawyers (and was not self-repping) she should have been told in words of one syllable that her ex-husband could go to the CSA.  Those same lawyers should have explored with Jane certain arrangements that could have been recorded in the family court order that would have protected Jane against the possibility of the CSA becoming involved.  One such mechanism would have been for Jane’s ex-husband to agree to make up, on a pound for pound basis, any shortfall in the amount of child maintenance ordered by the court once the CSA became involved.  There are a number of solutions that could have been explored but if Jane had divorce lawyers at the time and is unclear how she has been left so exposed she should contact them and ask for an explanation.

In short…

So, on the facts known to me, Jane cannot go back to the family court.  The CSA deal with matters now.  However, Jane is entitled to ask the CSA to check that her ex-husband has given full financial disclosure to the CSA.  I do not know the details of the case.  The CSA assessments are based, in the main, solely upon the net income of the non-resident parent.  But Jane may want to ask the CSA to investigate further, and ask for what is called a ‘variation’, if any of the following scenarios apply:

  • Her ex has capital assets (but not business assets or equity in his home) over £65,000.  If so, the CSA may deem the asset to produce an income of 8% per annum and this will be factored into overall income and increase the maintenance assessment.
  • He is taking dividends through a company rather than a wage or retaining significant capital in his company which could be taken as income
  • He is diverting income elsewhere, such as through a new partner
  • Her ex has a lifestyle that is clearly inconsistent with his declared income to the CSA.

 

 

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