On the breakdown of a relationship, you are both responsible for financially supporting the children irrespective of where they are living. (If you are married, you can also apply for spousal maintenance or financial support, whether you have children or not. If you aren’t married, then your ex doesn’t have to pay you maintenance for your own benefit except in very limited circumstances), even if you’ve given up work to look after the children or your home, but will still have to pay child support.)
You can apply for maintenance through the courts, the Child Maintenance and Enforcement Commission (formerly, the Child Support Agency) or you can agree your own arrangements. C-MEC is the body responsible for assessing and collecting payments for children who are under 16 years (or in full-time secondary education).
When a marriage ends you can apply for what is known as ‘a financial remedy’ which can take the form of regular payments (maintenance), one-off payments (lump sums), transfers of property or a share of your spouse’s pension. Some divorcing couples can sort out their own financial issues on a split between themselves. They might need some help to know what arrangement is fair. There are wide parameters within which a judge can make an order so different views are likely to be taken as to what is appropriate. Further complications exist because the court will expect to see the agreement written up in technical language in a particular way. If nothing is done to formalise the agreement then the claims might be left open to be pursued at a later date. It is a good idea to instruct solicitors for help and so that any agreement is drawn up properly.
The legal processes of divorce and sorting the finances may not be resolved at the same time or speed. When people complain about divorces dragging on for years, they generally mean that finances take a long time to sort rather than the relatively short length of time to obtain the divorce. So, it could be that there is a decree absolute and your finances have yet to be finalised. A spouse’s right to apply to the court for maintenance only (not capital orders) is lost on remarriage and so you must be careful to apply for a financial remedy before remarrying.
The legal principles that govern finances on divorce are covered in the Matrimonial Causes Act 1973, section 25 – see below. There is no straightforward formula for financial settlements post-divorce. Professional advice should be taken.
There has been much in the media about ‘big money’ divorces and, in particular, the theme of divorcees increasingly winning a half-share of their former partner’s capital and part of their future income. A few years ago the House of Lords shook up British divorce (in the 2000 case of White v White) when they established the principle that the contributions of a ‘homemaker’ spouse were equally valid to the building up of assets by the breadwinner. The Whites were a wealthy farming couple who built up £4.6m business over 33 years by working physically hard on the farm and contributing equally to domestic tasks. After the split, Mrs White claimed an equal share of the business so she could continue to work. However the court viewed her as a conventional housewife and gave her less than a quarter of the assets. On appeal, the Law Lords ruled that payouts had to reflect the circumstances of each case, but suggested that courts arrive at their assessment and then compare this against ‘a yardstick of equality’. Since that ruling, the papers have followed ‘big money’ divorces, often featuring mothers who sacrificed careers for family. For example, the former City lawyer who was married for 16 years to a senior partner at an accountancy firm earning over £750,000 a year. The couple agreed she should give up her own high-flying career to raise their three children. The Laws Lords agreed that she was entitled to £250,000 a year for life as well as having child maintenance of £60,000. The reality is that these rulings concern a minority of the very wealthy. Most couples who break up are of ‘limited means’, this means there isn’t enough cash for the housing and living needs of both husband and wife and such a division is not possible.
The principle of financial provision on divorce is equality of division of all resources. However, fairness may require that there are good reasons to depart from that principle– especially, if the accommodation needs of the parent with primary care of the children require more than 50%. Otherwise if needs are met by sharing, resources are divided into two categories. Those assets acquired during the marriage (income through employment and growth in property values) will often be divided equally. However, for other assets – for example, those acquired pre-marriage, inheritances, gifts and some post-separation assets – it will be easier to depart from the principle of equal division if good reason can be demonstrated. If one departs from equality depends on many factors.
Matrimonial Causes Act 1973, section 25
It shall be the duty of the court in deciding whether to exercise its powers … to have regard to all the circumstances of the case, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen. As regards the exercise of the powers of the court…, the court shall in particular have regard to the following matters:
(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future…;
(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
(c) the standard of living enjoyed by the family before the breakdown of the marriage;
(d) the age of each party to the marriage and the duration of the marriage;
(e) any physical or mental disability of either of the parties to the marriage;
(f) the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family;
(g) the conduct of each of the parties;
(h) the value to each of the parties to the marriage of any benefit (e.g. a pension) which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.
Thanks very much to Punam Denley, a partner at the International Family Law Group LLP for reviewing and to David Hodson, also partner at the International Family Law Group LLP, who reviewed an earlier version which appeared in A Parent’s Guide to the Law by Jon Robins (LawPack , 2009). Stephen Lawson, a litigation partner at Forshaws Davies Ridgway LLP assisted with the section on the CSA.