Sophie Pike: Sing A Song of Sixpence – nursery fees and child maintenance
Sophie Pike explores the cost of childcare and how that should be shared between separated parents.
The cost of childcare in the UK is reported to be amongst the most expensive in the world, with an average full time nursery placement costing nearly £15,000 per child per year. In Scotland, funding of up to 1,140 nursery hours per year is available for every child aged three and four, and means-tested funding is available for two-year-olds whose parents meet the financial criteria.
Notwithstanding this financial support, childcare remains prohibitively expensive for many families and can impact on whether and how people return to work after having children. There may be a very real predicament about whether there is any financial benefit in the children’s primary carer returning to work versus remaining at home on a full or part time basis.
In the context of a marriage or cohabitation where there would still be one income coming into the household, that decision may be slightly easier to make than in single parent households.
If we view this from a family solicitor’s perspective of dealing with the breakdown of a relationship, there are two different perspectives each with their own issues consider.
You will likely have the parent who has given up a career or reduced their hours to care for the children, and the parent who has been providing financially. If the parent who has not been working will continue to provide the majority of care for the children, there may be difficult decisions to be made around balancing the cost of childcare and return to work part or full time, and also considering the level of financial support required.
In many cases there is a desire on both sides for the parent to return to the workplace as soon as reasonably possible, but what each person considers “reasonable” may vary significantly. In addition, when factoring in the cost of the childcare required to allow both parents to work part or full time and how that ought to be funded, you will often find parties do not see eye to eye about this.
Looking at the scenario where a resident parent is returning to work and needs childcare, what is the non-resident parent required to pay towards the support of their children and the support of their soon to be ex-spouse or partner?
The requirement of the non-resident parent to pay child maintenance is well established. The Child Maintenance Service provides an online calculator which can be used to calculate the baseline figure of maintenance. The level of maintenance is calculated based on a percentage of gross weekly income.
It factors in the number of children and the amount of overnight time the non-resident parent spends with the children. Child maintenance is designed to cover a share of the living costs of your child – such as housing, food and basic clothing needs.
As noted, this figure is a baseline figure and has not been calculated directly in relation to the substantial – and rising – cost of childcare.
In the majority of cases, child maintenance as calculated by the Child Maintenance Service will not be sufficient to meet one half share of childcare costs alongside the required assistance with living cost. It is absolutely possible to agree to pay a higher level of child maintenance specifically in relation to childcare costs and many people do that. However, if that cannot be agreed, is there a further obligation of support over and above this figure which people ought to be aware of?
Where parents are married – spousal support
This area of law is covered by the Family Law (Scotland) Act 1985. In some cases, it may be argued that an additional payment of spousal support is necessary to assist with funding childcare. Spouses have an obligation to support one another post-separation where it can be demonstrated that there is a financial need on the part of one, and the ability to meet that need on the part of the other.
If a resident parent would be able to demonstrate a deficit in their income each month, that may justify the court awarding them an award of interim aliment (support prior to divorce) or periodical allowance (support after divorce). The court would only do so if it can be shown that one spouse has sufficient income to support their own reasonable outgoings and the other has surplus which could help alleviate the deficit.
Childcare costs would be considered a reasonable and necessary expense, especially if both parents rely upon childcare in order to work. In such cases, we would actively encourage parties to reach an agreement about this rather than going to the additional expense of having a court make that decision for them.
Where parents are married
Another approach to correcting any financial imbalance may be to look at the overall division of the matrimonial assets. The Family Law (Scotland) Act 1985 governs this area of law in Scotland. The starting point is a “fair” division, which may be an equal sharing. During negotiations, it sometimes becomes clear that the person whose career was halted during the relationship is in a financially worse-off position than the person who remained in employment. Therefore, a person who has been out of the workforce or working part-time whilst caring for children may have an argument in relation to their own economic disadvantage which could justify a larger percentage sharing of the overall matrimonial property in their favour.
If that person is also the parent who will continue to have primary care of any child/children of the relationship then, depending on the financial support provided by the non-resident parent, they may also have a financial claim in relation to the ongoing burden of caring for a child of the relationship. This is known as a Section 9(1)(c) claim. In many cases, this centres around the resident parent’s ability to return to work whilst balancing care of the children and the cost of professional childcare. Again, if an agreement has not been reached about sharing this cost then there may well be an argument that the resident parent ought to receive a larger percentage of the overall matrimonial property to take account of this.
Where parents are not married – Section 28 claims
Although there is no equivalent to “spousal support” available to cohabitants, the Family Law (Scotland) Act 2006 does provide scope for a court to make a financial award in respect of economic disadvantage and the ongoing burden of caring for any children of the relationship.
Depending on the circumstances, a court would be able to consider making an award of a capital sum payment or ongoing instalment payments. It is very important to note that any claim arising out of the end of a cohabitation must be raised and served within one year of the date of separation or the claim will expire. There are no exceptions to this rule and therefore you should explore this with a solicitor as quickly as possible after separation to avoid any issues.
In cases where both parents will benefit from childcare – i.e. – where both parents work – we would encourage non-resident parents to consider voluntarily agreeing an additional figure of support to take account of a share of childcare costs where there is a demonstrated need. Without the childcare, neither parent would be able to work and it would therefore be a fair approach to take towards these unavoidable costs. Childcare is often an unavoidable expense and it is in the best interests of everyone to try to deal with these costs without the involvement of the court, wherever possible. If agreement cannot be reached without solicitor involvement, consider whether you would want to try a collaborative approach using solicitors, or a solicitor led mediation process. Failing that, there is scope to address matters in the Sheriff Court.
First Minister Humza Yousaf pledged to extend free childcare to one-and two-year-olds during his recent leadership campaign, and the UK government announced future plans to expand the free childcare scheme for parents in England in their Spring Budget 2023.
If these pledges become a reality, they may go some way to relieve the burden of childcare costs, but in the meantime, it would be beneficial to take a holistic approach to these matters, particularly as the cost of childcare is a temporary issue and will inevitably lessen as your children grow up.
Sophie Pike is an associate at Balfour and Manson