The question of how assets and finances will be divided upon divorce is one of the key issues in family law, and is often a major concern for those about to commence divorce proceedings.
Many people will be worried about how they will be able to support themselves after a divorce becomes finalised, especially if they are the main carer for the children of the marriage and cannot easily slip back into full-time employment. For others, the uncertainty of how long financial ties last between spouses after divorce, and how significant these obligations are, can be very unsettling.
This article will help to shed some light upon the questions surrounding spousal maintenance, and the general principles it is governed by.
‘Spousal maintenance’ refers to payments made by a husband or wife to their ex-spouse before or after divorce. It usually comes in the form of monthly payments, either for a fixed period, known as a ‘term order’, or otherwise on an open-ended basis known as a ‘joint lives order’ (more on this later).
Spousal maintenance is not always payable, however. It will only be ordered by the court if it is necessary, and where a ‘clean break’ between the parties is not possible. In a clean break scenario, an overall agreement is made as to how the finances will be divided, and both parties’ financial dependence on their spouse is ended. Click here for more information regarding clean breaks.
If a clean break is not feasible immediately, but will be in due course, then the court will make an order for term maintenance. This will be the case when one spouse does not have the capacity to support themselves adequately going forward, because, for example, he or she receives a lower income or is currently out of work and unable to rejoin the workforce. This can often be the case where one party is caring for both parties’ children for the majority of the time. It is important to note, however, that spousal maintenance is a separate issue to child maintenance. Child maintenance focuses solely on the financial needs of the children of the marriage, rather than their parents.
As the name suggests, term orders last for a defined period, with the payee spouse only receiving maintenance for as long as may be necessary to achieve financial independence ‘without undue hardship’. Note that some hardship is permissible: it is a question of degree. In other words, the clean break is delayed until it is appropriate for it to take place.
Exactly how long the term of maintenance payments will last varies from couple to couple, depending on their circumstances. For example, maintenance might be very short-term, until the payee commences an already-identified good new job. Alternatively, it could last a number of years if re-training is required , or until childcare responsibilities have diminished to an extent that full-time work is once again feasible. Term orders state on their face how long they are to last. Joint lives orders, which are comparatively rare, last indefinitely until the death of either spouse. In making a joint lives order, the court is essentially saying that there is no currently identifiable future point at which the payee is likely to be financially independent.
Any spousal maintenance order, whether term or joint lives, will automatically end if the payee remarries. Mere cohabitation does not have that effect, however: maintenance payments do not automatically cease because the payee is living with another person (unless the order has specifically provided for that). The extent to which cohabitation is relevant will depend on the circumstances of the case.
Again, the amount of money that one party will pay to their ex-partner in spousal maintenance varies greatly between couples. Courts have a duty to take into consideration all circumstances of the case as well as the factors listed in section 25 of the Matrimonial Causes Act 1973. Click here to find out more about the section 25 factors.
It is a relatively common misconception that income will be divided upon a divorce in a similar fashion to other assets. This is not the case. Spousal maintenance exists so that both parties can meet their needs upon separation and for no other reason. There is no rule that separating parties will divide an available income stream equally upon divorce. How much a payee will receive depends on the couple’s unique circumstances: the sum required to meet ordinary monthly outgoings on the one hand, and on the other, affordability for the payer.
The order will also reflect the way in which the payer earns his or her living. For example, the court will treat basic income and bonuses differently. Where possible, the everyday aspects of a maintenance claim will be met from the payer’s basic income, with less essential items being met from bonuses if they are eventually received. The treatment of bonuses and other discretionary or uncertain future income is a complex area, in which The Divorce Surgery has significant experience.
Yes, both as to the amount payable and also – usually – as to the term of the order. The courts recognise that circumstances change over time. People lose jobs, change careers, or move elsewhere. The right to seek a variation of maintenance is an important protection for both payee and payer.
As to varying the amount, if this cannot be agreed, then either party may apply to the court to change the sum payable, up or down. Note that, on an application to vary, the court will again consider whether a clean break is achievable. Indeed this is often the payer’s motivation in bringing the application. In considering the arguments, the court has the power to order a payer to provide a capital lump sum to the payee instead of ongoing maintenance if appropriate in the circumstances of the case. It can also make orders against the payer’s pension funds.
In most cases, the payee can also apply to extend the length of the maintenance term provided that…
If either of those things has happened, it will not be possible to apply to extend the maintenance term.
Nominal maintenance is a form of spousal maintenance where the payer pays only a nominal sum (perhaps £1 per year) to the payee, either for a term or joint lives. The court might consider making such an order in circumstances where substantive payments are not merited at that time, but where it does not consider a clean break to be achievable either. An example might be where one spouse has the care of very young children and is unable to work in the medium-term, but at the same time the other spouse simply does not have the means to contribute anything material. Another example might be where the court considers that in principle maintenance should be paid, but the payer’s ability to do so is dependent on some uncertain future event, such as selling a business.
The point of a nominal maintenance order is to keep the payee’s financial claims open, to allow for a future variation application to be made if circumstances change.
As mentioned above, variations to maintenance orders can only be applied for before the expiry of the order. Nominal maintenance orders therefore provide security that more generous spousal maintenance payments can be secured through a variation if they are needed.
Our barristers at The Divorce Surgery are experts in family law and deal with matters of maintenance on a daily basis. They are therefore in the perfect position to offer impartial advice to couples on whether spousal maintenance will be necessary upon the dissolution of a marriage, and if so at what level. They can offer assistance in coming to a fair settlement without the need for a lengthy and expensive litigation process.