A Case Study – How Schedule 1 Can Assist Unmarried Parents

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This blog addresses the potential differences in how, during a separation or divorce, the law approaches cases where a couple are unmarried, married/in a civil partnership and/or have a child together. It also considers how Schedule 1 can be used in cases where the separating couple are not married but have a child/ren and the main carer requires financial provision to meet their child’s needs, aside from any child maintenance provisions.

Under Schedule 1 the court is able to make orders for periodical payments (in limited circumstances – this will normally fall under the jurisdiction of the Child Maintenance Service), lump sums (to maintain a child, for example, a car to transport the child) or settlement of property for the benefit of a child.

Schedule 1 of the Children Act will not place someone in the same position that they would have been in if they had been married or in a civil partnership.  That is not its purpose.  However, as a by-product of meeting the children’s needs, it may place the financially weaker party in a better position than they would have been in had the couple not had children together, at least whilst the child/ren are under 18.

Background

Jack and Jill are both aged 40.  They have lived together for 20 years.

They live in a property worth £1.5 million owned in Peter’s sole name.  Jill has not made any contribution to the property (whether to the purchase price or through making improvements to it) and Jack has never indicated that Jill has (or will have) an interest in this property by virtue of their relationship.

Jack earns £200,000 per annum (gross) and has investments of £8 million held in his sole name but which he has built up during his relationship with Jill.

Jill has not worked since they started living together but before that, she earned £18,000 per annum (gross).

Scenario A

For the purposes of this scenario, let’s assume that Jack and Jill are not married and do not have any children together.

If the relationship ends, then Jill has no financial claims against Jack and has no right to continue to occupy the property.

Scenario B

For the purposes of this scenario, let’s assume that Jack and Jill are not married but they have a 5-year-old child together (Peter).  Jill has been Peter’s main carer and is likely to continue to be in the future, although Peter will be spending regular time with his father

Jill is likely to have a claim under Schedule 1 of the Children Act for the benefit of Peter.  This can include provision for her and Peter to be housed in a suitable property and for this property to be appropriately furnished.

However, there are limitations to this.  The claim is for the benefit of Peter, not Jill.  Therefore, any property will not belong to Jill outright and is likely to revert to Jack’s ownership when Peter either finishes secondary education or university.  There are some circumstances where the property could pass to Peter at this stage but that is dependent on various factors and is quite rare.

Jill will also have a claim for Child Maintenance.  Given Jack’s income is more than £156,000 per annum (and following a maximum assessment by the Child Maintenance Service) Jill would also be able to apply to the court for a top up order [link to the blog about top up orders].

 Scenario C

 For the purposes of this scenario, let’s assume that Jack and Jill have been married for the 20 years that they have lived together (but have no children together) and there is no pre-nuptial agreement.

The minimum claim that Jill would have in this scenario would be for her housing needs and day to day living costs to be met.  However, it is entirely possible (indeed I would suspect more likely) that Jill would have a claim for 50% of the capital that was accumulated during the marriage regardless of it being in Jack’s sole name.

Summary

The above illustrates the stark difference between a couple who are unmarried or not in a civil partnership and do not have a child together with a situation where a couple do have a child together or circumstances where a couple are married (or in a civil partnership).

If your situation is similar to any of the above scenario’s or you would like to discuss your unique circumstances with us, please contact us.

 

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