First of all, what is a Schedule 1 application?
Well, most parents seeking financial provision for their children are likely to turn to the Child Maintenance Service. The Child Maintenance Service has jurisdiction for all maintenance cases where the paying parent earns less than £156,000 gross per annum (£3,000 gross per week).
If the paying parent earns more than £156,000 gross per annum, then it is possible for the parent with care of the child(ren) to make an application to the Court under Schedule 1 of the Children Act 1989 for further financial provision for the child(ren).
You could seek, by way of example only:
1. A lump sum;
2. Periodical payments;
3. The purchase of transfer of a property to the parent who cares for the child(ren), which will be returned to the parent who funded it when it is no longer needed to house the child(ren), i.e. when they reach the age of majority, which is usually 18, or finish their education (tertiary or higher);
4. Payment of school fees; and
5. A carer allowance, which could pay for childcare cost, a nanny, a vehicle to transport the child etc.
The Court also has the power to make orders for periodical payments and lump sum payments for the financial benefit for the child(ren) over the age of 18, however, these are only in very rare special circumstances, such as the child having a disability.
The recent case of DN v UD [2020] EWHC 627 (Fam) is the first reported case to which the Court extended its powers to ordered long-term financial provision for a child, even when the child reaches independent adulthood.
Mr Justice Williams had made a unique decision to award capital sums to two children to allow them to purchase their own respective property outright in the future, and once they reached adulthood.
By way of background, the case involved two parents who were Russian nationals. They had never married but they had cohabited for over 20 years. For the sake of completeness, and during this time, the father had married three other women, two of which he divorced, and fathered children with.
However, the parties to these proceedings, the parents, had three children, of whom were aged 22, 19 and 14 years of age.
The father was very wealthy and had built a business empire per se. The father had funded the lives of the mother and the children throughout the relationship.
The father persuaded the mother and the children to move from Russia to England and in 2010, they finally did, but without the father.
However, and throughout the relationship, the father had made numerous payments to the mother and the children, including providing the eldest child with £600,000 to buy his own property once he reached adulthood.
Mr Justice Williams, however, described the father’s payments to the mother and the children as his “financial muscle” which he used to manipulate the mother and the children into getting what he wanted and had even threatened to evict the mother and the children from their home. The father would also refer to these payments as loans and not gifts, but after the event.
Once the parents separated, the mother made a Schedule 1 application to the Court, but the Court faced difficulties with the father providing full and frank financial disclosure.
To conclude, the Court decided that:
1. The mother and children should remain in the home that they currently live in until 6 months after the youngest child finishes tertiary education;
During the case, evidence was put forward to show that the mother and the children could live comfortably in a circa £3m home, yet the Court decided that the mother and the children should remain in their current property, which was worth circa £10m.
The father’s position was that by providing the property in trust, he would have huge tax implications.
The Judge concluded that, although this may not financially be the best route, that the children’s welfare and needs were paramount.
2. Thereafter, the two youngest children shall receive capital sums to allow them to purchase their own properties;
As explained above, it is very usual for financial provision to be provided to a child over the age of 18 and that these would usually be in special circumstances only, which could include the child having a severe disability.
Of interest, however, the Judge determined that this was a “special” case, in particular referencing the father’s emotional conduct.
Upon reading the Judgement, the Judge had in particular questioned what a “special” circumstance was, save for a disability.
3. In relation to the eldest child, any financial provision was refused on the basis that the eldest “child” had been an adult child when the application was made.
In relation to this final point, the mother’s position was that the eldest child was subject to discrimination on this point as, the law relating to married couples under the Matrimonial Causes Act 1973 allows parents to make an application to the Court seeking financial provision for their adult child too, the Children Act 1989 does not. As mentioned above, these parents were not married.
This has been a very interesting Judgement to examine and it will be interesting to see if this marks a new era for Schedule 1 applications.
The information provided in this article is not intended to constitute legal advice and you should take full and comprehensive legal advice on your individual circumstances by a fully qualified Solicitor before you embark on any course of action.
Emma Aslett
0207 183 4595