What is spousal maintenance? It is income payable by one spouse or former spouse to the other, in their own right and in addition to, not instead of, any child maintenance.
But when there's a change in either person’s situation, it may become appropriate to vary a Spousal Maintenance Order by either increasing or decreasing the amount of the payment. What does this mean in practice?
Upon making of a financial remedy order in respect of matrimonial finances after divorce, it is mandatory that the Family Court consider effecting a “clean break” whereby each parties’ financial claims against each other are finalised completely, and other than any child support payable, neither party is able to return financial matters to court.
However, if the needs of one party are such that a contribution from the other is still required to fill any gap between income and reasonable expenditure, the court can make a spousal maintenance order either for a specific term, or in much rarer cases, for life. Legal terms you may have heard of include:
- joint lives maintenance - usually, a joint lives order will remain payable until the death of either party, the remarriage of the recipient, or a further order
- specific periods of maintenance - spousal maintenance can be agreed and paid subject to an order for a specific number of years, commonly referred to by the court as a term order covering a variety of situations, such as payment of maintenance until the children leave full-time education, or to allow for a period of re-training by the recipient, or until the recipient draws a pension.
In certain circumstances, this term order can be extended, but this will depend on what was agreed or directed by the court at the time the order was made. An order may contain a “Section 28” bar, which means that the term of maintenance cannot be extended past the period specified in the order. Otherwise, an application to extend a maintenance order must be made before the term provided for expires.
Can a maintenance order be varied and in what circumstances?
Either party to the order, whether the payer or recipient can make an application to vary any order for spousal maintenance pursuant to Section 31 of the Matrimonial Causes Act 1973, whilst the order remains in force.
Each parties’ circumstances need to be considered carefully before making such an application as the application to vary may end up with a result they were not expecting. Someone seeking more may get less or see a “clean break” imposed. Someone seeking a reduction may end up paying more. And the unsuccessful party could be ordered to pay the other’s costs at the end of the application.
The court will require the parties to provide financial disclosure to the other so that it can consider each party’s financial position in accordance with the parties' needs, resources, age, any disabilities, earning capacity and whether a party intends to retire and the effect of this retirement. The court can look at how the person receiving the maintenance payments has managed their finances during the term and determine whether that party is able to adjust to financial independence without undue hardship.
How will the parties’ capital resources be considered?
An application to vary is not a “second bite of the cherry” and the court will only consider capital as a resource to meet income needs. The court does however retain the right to impose a lump sum or pension sharing order (providing none was made in the original order) upon varying and/or discharging a maintenance order. Therefore, if the recipient cannot meet their day-to-day income needs without ongoing maintenance, and the payer has capital available, the court may order that the maintenance claim be capitalised and replaced by a capital payment, upon which all the claims for income will be ended.
On the other hand, if the recipient has enough capital to meet their needs, this can be considered in any variation. The court would not expect a payee to liquidate all of their assets and diminish them completely to meet their monthly living costs but neither will it allow a party to retain substantial cash savings, without applying some cash to meet their income needs.
Where there is on-going maintenance payment, and a party’s financial position has or is likely to change, an application to vary the original order will need to be considered, for example, if the payer is going to retire and an earned income is to disappear, or income be reduced considerably. On the other hand, if the recipient of maintenance cannot meet their own needs because of a change of circumstances, such as if they have lost their job, or because of a serious illness which reduces their own earning position, they may want to rely on an application to increase the maintenance payable.
If you are a party to such an order and you believe your financial position is likely to change, you should consider obtaining early legal advice as any application to court is likely to take months rather than weeks and you will need time to enable you to engage with the other party and have discussions about whether any changes can be agreed, avoiding the costs and stress of any application to court.
If you are affected by any of the issues raised in this blog, please get in touch with us today. We're here to help.