The Labour Party has confirmed its intention, if elected, to levy 20% VAT on independent school fees. Few schools are likely to be able to absorb this additional expense. With household budgets already stretched, many families will be grappling with issues of affordability. This can be a particularly challenging in separated families where there is less ongoing transparency about finances.
So what happens if one party decides that they can't, or won't pay any more?
First of all, where payments for school fees are made under court order, the issue must be resolved by agreement, and evidenced in writing, or both parents might find themselves back in court. Where agreement is not reached the paying party cannot simply stop paying – the order must be varied to avoid enforcement proceedings.
What happens if one party decides to stop paying?
Enforcement proceedings following non-payment will be successful if the paying party has the funds to pay. This will be an objective decision of the court. The person applying sets out details of unpaid amounts in their application. The debtor must complete a short financial statement.
Next, both parties attend court. Having decided whether the debtor has the means to pay, the court can secure payment in a number of ways including charging orders against property, deductions from earnings and orders against third parties. Interest and court costs will be added to the sums owed. All of this can take some time; court listing are delayed by months at the moment.
In the meantime, the parents may find themselves pursued by the school for non-payment of fees. Ultimately, schools can turn children away if their fees are not paid or there is no payment plan in place.
What happens if the paying parent can no longer afford school fees?
If a parent believes that they can no longer reasonably make payments under a court order for school fees or any other agreed payments, they should apply to the court to vary – or discharge – the order.
This application will necessitate both parties producing financial disclosure and, if the matter does not settle, written statements, to enable the court to assess whether it is appropriate for the original order to stand.
What factors determine variation applications?
A change of circumstances needs to be proven so as to convince the court that the original assessment of circumstances is now obsolete. The imposition of VAT on school fees may not be enough to meet that threshold. Orders impacting children will also always be assessed against the best interests of the child(ren) involved and variation application will enable more nuanced factors to be taken into account, such as timing decisions around key milestones in a child's education.
Choosing a new school
If a decision is reached that fees are no longer affordable, parents must be careful to give notice to the school in compliance with their schools' terms and conditions to avoid finding themselves liable for additional fees.
A new school for the children will be uppermost in parent's minds. Taking time to visit schools and read reports is perhaps an obvious step but more challenging for busy parents than it sounds. If parents cannot agree on a school, the court can consider this matter as a specific issue and will make a decision based upon the best interests of the child(ren) concerned. A parent wanting to convince the court that their proposed school is the right one for their child(ren) will need to present carefully collated evidence of the reasons why that school works for their child.
Note that these applications can be made at any time during a child's education, whether or not there are orders in place.
Planning for every outcome
With the possible increase to school fees and cost of living pressures, it is really important that parents plan ahead now and consider all options – including that they may not succeed in their application for a variation.
In circumstances that are already difficult, a last minute scramble for a new school place only adds to the pressures faced by the family and can impact the parents' ability to ensure a smooth transition for the children. An early discussion with your family lawyer can help you navigate this delicate process and avoid unintended disruptions to your children's education.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.