Schedule 5 – Financial relief in the High Court or a county court etc.
560.Schedule 5 provides for financial relief when a civil partnership is brought to an end and provides corresponding rights to those available to married people.
Part 1 - Financial provision in connection with dissolution, nullity or separation
561.This Part outlines the circumstances in which the High Court or a county court (with jurisdiction) can make an order for financial provision. A court may award financial provision when making a dissolution, nullity or separation order or at any time afterwards. When making financial provision the court has a number of orders available to it. They are listed in paragraph 2. The court may, for example, make an order for a lump sum or for periodical payments to be made from one civil partner to the other or to a child of the family, or to a particular person for the benefit of a child of the family. The court can order periodical payments to be secured by means of a charge or other arrangement. Similarly a court may order a lump sum to be paid by instalments and for the instalments to be secured by a charge on property.
Part 2 - Property adjustment on or after dissolution, nullity or separation.
562.This Part allows for property adjustment orders to be made on or after dissolution, nullity or separation. In the case of a dissolution or nullity order the property adjustment can only take effect after the dissolution or nullity order has been made final.
Part 3 - Sale of property orders
563.This Part provides for orders for sale of specified property in which either or both civil partners have a beneficial interest. The sale of property order can contain supplementary or consequential provisions, in particular it can include provision for payments out of the proceeds of the sale or for the property to be offered for sale to a particular person or group of people. In the case of a dissolution or nullity order the sale of property order can only take effect after the dissolution or nullity order has been made final. Where an order for sale of property contains a provision that the sale of the property can be used to secure regular payments, then such an order would cease to have effect on the death, re-marriage of or formation of a subsequent civil partnership by the civil partner in whose favour the order had been made. The court can direct when the order for sale should take place and there are provisions for third parties with interests in the property to make representations.
Part 4 - Pension sharing orders on or after dissolution or nullity order
564.This Part provides for a pension sharing order to be made so that both civil partners share the benefit of the value of a pension that had previously been held by only one of the civil partners. The value of the pension is effectively split and the court specifies the amount (in percentage terms) transferred to the other civil partner. The court can apportion any charge made by the person responsible for a pension arrangement. A pension sharing order cannot be made in respect of a pension that is, or has already been, the subject of a pension sharing order between the same two civil partners, or where there is already in force an order under Part 6 in relation to the same pension. The order can only take effect after the dissolution or nullity order has been made final. The Lord Chancellor, in regulations, can set a minimum period before a pension sharing order can take effect.
Part 5 - Matters to which the court is to have regard under Parts 1 to 4
565.This Part sets out the matters which the court must consider when deciding whether to exercise its powers to make orders under the preceding four Parts. Whilst all the circumstances of the case have to be considered the first consideration has to be given to any child of the family under 18 years old. The criteria the court must consider under this Part are parallel to those contained in section 25 of the Matrimonial Causes Act 1973 and reflect the relative financial positions of the civil partners, their current and future obligations, their age and the duration of the civil partnership and the contributions each civil partner has made to the welfare of the family, whether in financial terms or by caring or looking after the home. The conduct of each civil partner will be taken into account if it would be unfair to disregard it. When exercising the powers in relation to a child of the family the court has to consider the financial needs and resources of the child in addition to the financial position of the civil partners. Where a child is not a child of one of the civil partners the court needs to look at any responsibility that civil partner had assumed for the child and the duration of such responsibility. The court has to consider the appropriateness of the orders under Parts 1 to 4 in respect of termination of financial dependence or involvement.
566.This Part makes further provisions about orders under Part 1 relating to pensions. The effect of this Part may be summarised as follows. When deciding what orders to make the court must take into account pension arrangements. A court may order the person responsible for a pension arrangement to pay a civil partner a percentage of the payments due to the other civil partner. A civil partner with pension rights may be ordered to exercise any right of commutation that he has under a pension arrangement. The court has power to make orders about the payment of lumps sums payable in respect of a civil partner’s death.
Part 7 – Pension Protection Fund compensation etc.
567.This Part contains provisions concerning Pension Protection Fund compensation, which apply where financial relief has been applied for or granted in accordance with the Schedule. It provides that:
when the court is deciding what orders to make in relation to financial provision following a dissolution, nullity or separation order, it is to take into account any compensation from the Pension Protection Fund (PPF) to which a civil partner is or might be entitled;
the PPF Board is to implement pension sharing orders made before the Board took over responsibility for the pension scheme, including those orders made during the Assessment period (when the pension scheme is being considered for being taken over by PPF);
the PPF will implement attachment orders made before the PPF took over responsibility for the scheme including those made during the Assessment period, when the pension scheme is being considered for being taken over by the PPF;
where the court makes a pension sharing order or a pension attachment order and the PPF Board subsequently assumes responsibility for the scheme, that does not affect the powers of the court to vary or discharge the order or to suspend or revive any provision of it. Also, the assumption of responsibility by the PPF Board does not affect, on appeal, the powers of the appeal court to affirm, reinstate, set aside or vary the order;
where an order under Part 1 of the Schedule includes a provision requiring the civil partner with pension rights to exercise his right of commutation under an occupational pension scheme to any extent and the PPF Board has assumed responsibility for the scheme before the requirement is complied with, then the order has effect with modifications as may be prescribed by regulations;
it is to be possible for provision to be made in the future for the court to make an order relating to death benefits during the Assessment period which is conditional on the scheme coming out of the Assessment period and the PPF Board not taking over responsibility for it;
regulations may make such consequential modifications of any provision of Schedule 5 (or of any provision made by virtue of Schedule 5) as appear to the Lord Chancellor necessary or expedient to give effect to the provisions of Part 7;
The court does not have power to make an attachment order or pension sharing order against the PPF.
Part 8 - Maintenance pending outcome of dissolution, nullity or separation proceedings
568.This Part allows for the court to order one of the civil partners to make periodical payments for maintenance for the other civil partner before the final outcome of the dissolution, nullity or separation proceedings has been determined.
Part 9 - Failure to maintain: financial provision (and interim orders)
569.This Part allows either civil partner to apply to the court because the other civil partner has failed to maintain them adequately or has failed to provide for, or make a proper contribution towards, the welfare of any child of the family. The court is empowered to make a range of orders, including orders for periodical payments for a set period of time, a lump sum payment and an order to secure payments. The court may make an order in favour of the other civil partner, the child of the family or another person for the benefit of the child. An order for a lump sum payment can be made to cover reasonable expenses and liabilities incurred in maintaining the applicant or any child of the family before the application was made. Where there is immediate need of financial assistance an interim order can be made. The Part sets out the matters the court must consider when deciding whether proper maintenance has been provided, which are the same as used in other financial provision cases as set out in Part 5 of the Schedule.
Part 10 - Commencement of certain proceedings and duration of certain orders
570.This Part establishes that, subject to any rules of court, applications for financial provision can be commenced at any time after the application for a dissolution, nullity or separation order. The Part also contains provisions about the circumstances when orders will cease to have effect or are not available, for example when a child of the family reaches the age of 18 and where a civil partner in receipt of periodical payment marries or forms a subsequent civil partnership. It also deals with applications for periodical payments where a maintenance calculation is still in force.
Part 11 - Variation, discharge etc of certain orders for financial relief
571.This Part confers various supplementary powers on a court in respect of an order made under Schedule 5. The court may vary or discharge the order, suspend any provision of it or revive the operation of any suspended provision. It may also remit (cancel) arrears. Part 11 contains a number of further detailed provisions about the exercise of these powers.
Part 12 - Arrears and repayments
572.This Part deals with arrears and repayments and provides that arrears cannot be enforced without the leave of the court. In certain circumstances the court may order repayment of a sum which ought not to have been paid. For example, if a periodical payments order has ceased to have effect because the recipient has married or formed a new civil partnership the court may order the repayment of any money overpaid by mistake.
Part 13 - Consent orders and maintenance agreements
573.In this Part provisions are made for civil partners to reach agreement on the terms of financial orders and for the court to make an order (a consent order) on terms as set out by the parties and presented to the court. There are also provisions for agreements to be altered by the court during the lives of the parties, restrictions on applications to magistrates’ courts for maintenance and provisions relating to the duration and limits of periodical and secured periodical payments where those provisions are inserted into an agreement to alter it. This Part also provides for agreements to be altered after the death of one of the parties, if an agreement for maintenance allows for payments after the death of one of the parties.
Part 14 - Miscellaneous and supplementary
574.This Part provides: for the court to make orders overturning transactions carried out in an attempt to defeat financial orders under the Schedule; provisions for a settlement to be overturned on the bankruptcy of the person who made it; for orders for payments made to a person suffering from a mental disorder to be paid to another person and; for appeals when a pension order has taken effect. This Part also defines a number of terms used in the Schedule.