It has been reported that following divorce or separation, mothers and children tend to be the group that is the hardest hit, financially speaking. Recent research shows that one in 5 mothers fall into poverty following a split. The research carried out by the Institute for Social and Economic Research at the University of Essex also found that 19% of children fall into relative poverty after their parents separate. The results do not only apply to families where there are children – it would be easy to assume that as mothers often remain the primary carer for children after separation, that this is the causing factor. Actually, the results show that this is not the case and that one third of women over 50 with either independent children or no children are also falling into poverty after divorce.
Family separation has a huge impact on family finances. Of course each individual’s circumstances are unique but generally speaking, the income that used to fund one household, now has to stretch to two. It is not as simple as splitting that income down the middle. One party often earns more than the other, whether that be through employment or via pension payments. Although not in every case, it is generally true to say that the higher earners tend to be men as they have not had to take a career break to have children and raise a family, which of course has a significant impact upon a woman’s income, future earning capacity and pension size.
The research reveals that the group who see the largest drops in living standards are those from high income families. This is because the loss of the man’s income is in no where near compensated by child maintenance, spousal maintenance and benefits and tax credits.
According to Gingerbread, the charity for single parents, there are 2 million single parent families and only two fifths of those receive child maintenance payments. With the arrival of the new child maintenance regulations, which see the introduction of the application charge of £20, there has been a dramatic reduction in people applying for child maintenance – a 38% drop. This will undoubtedly compound the problem of poverty post-separation.
From our point of view as family solicitors, we regularly see people, often women, suffering financially soon after separation. Where necessary we work to improve that situation by applying to the court for Maintenance Pending Suit. This can be applied for only after divorce and financial proceedings have been initiated by one party. It means that the court can make a temporary order that one party has to pay a monthly sum to the other by way of maintenance until the main issues in the case have been settled or the Judge has made a final order. Legal arguments in this sort of scenario revolve around what is necessary and what is reasonable to pay and to receive. Evidence about the person’s standard of living, earning capacity and financial resources are provided to the court and often argued in great detail. Judicial comments such as ‘cutting your cloth accordingly’ are often heard.
Of course, applications such as these do cost money. Legal expenses will always be taken into consideration and as such an application to court is the last resort. The disappearance of Legal Aid has had a real impact upon these cases. The introduction of the Legal Services Order goes some way to rectify the problem. This type of order requires one party to pay the other an amount specifically for legal services.
In conclusion, there are ways to alleviate the poverty that can be caused by separation such as child maintenance, spousal maintenance (temporary and on going), Legal Services Order and tax credits and other benefits. We can and will advise on all of these to reduce the potential impact that a separation can have. The reality is that when one household splits into two, there will be a significant financial impact, no matter how high up or low down the income scale you are. Making sure that the financial arrangements are fair and do not leave one party in financial hardship is absolutely key, particularly where children are involved.
To speak to one of our specialist family lawyers about the options open to you, please contact us to make an appointment on 0161 969 3131.