Spousal Maintenance:Are you at risk or entitled?
What is spousal maintenance?
The term spousal maintenance is often thrown around in the context of a property settlement after separation. Depending on which side of the separation fence you are sitting on, spousal maintenance may be a good thing or a bad thing. Simply speaking, if you’re the person paying spousal maintenance to your former spouse you may be subject to an ongoing responsibility to maintain the other person but if you’re the one receiving spousal maintenance you have financial assistance with rebuilding your future.
Let’s look at spousal maintenance and what it is exactly? I like to think of it as financial support for grownups. I say this because most people can rationalize the concept of child support being maintenance for children well with spousal maintenance you are maintaining your former spouse either for a period of time with periodic payments or in a lump sum payment or transfer of assets.
If you’re looking for a technical definition, spousal maintenance is defined by the Family Court of Australia as “financial support paid by a party to a marriage to their former husband or wife in circumstances where they are unable to adequately support themselves”. Whichever way you look at spousal maintenance it is effectively payment to your former spouse to put them in a situation where they are able to support themselves financially moving forward.
The key threshold question that the Court will ask when considering a spousal maintenance Order is whether a party is able to support herself or himself adequately.
Consideration for Spousal Payments
The Family Law Act 1975 (“the Act”) specifically details matters that are to be taken into consideration when it comes to spousal maintenance following the breakdown of a marriage. A list of twenty-five or so factors in section 75(2) of the Act details the matters taken into consideration by the Court when assessing whether a person is entitled to spousal maintenance. I won’t put you through the burden of having to read all the factors (this is where legal advice is necessary) however, the first few factors are:
- The age and state of health of the parties;
- The income, property, financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
- Whether either party has care and control of a child of the marriage who has not attained the age of 18 years;
- Commitments of each of the parties that are necessary to enable the party to support: themselves and a child or another person that the party has a duty to maintain;
- The responsibilities of either party to support another person;
- The eligibility of either party for a pension, allowance or benefit;
- Where the parties have separated and divorced, a standard of living that in all circumstances is reasonable;
- The extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or establish themselves in a business or otherwise to obtain adequate income;
- Th effect of any proposed order on the ability of a creditor of a part to recover the creditor’s debt, so far as that effect is relevant;
- The extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
- The duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
- The need to protect a party who wishes to continue that party’s role as a parent; and
- If either party is cohabitating with another person – the financial circumstances relating to the cohabitation.
If we delve deeper into the Act and the legislative requirements for spousal maintenance section 90F of the Act relates specifically to de facto spouses. Section 90SB details specifically the elements which need to be satisfied for a de facto spouse to apply for spousal maintenance. Broadly speaking the person applying for spousal maintenance must:
- Have cohabitated with their former spouse for at least two years;
- Have a child of the relationship; or
- Have made substantial contributions during the relationship (financial and/or non-financial); and/or
- A failure to make a spousal maintenance order would result in a serious injustice; and/or
- The relationship was registered under state or territory law.
It is a common misconception that both persons are entitled to the same standard of living as when they were together. This is not always the case. While the standard of living during the relationship is a consideration it is not an obligatory factor.
Time Limits on Applying for Spousal Maintenance
To apply for spousal maintenance there are strict time limits in which an application should be made, that is – for married spouses an application must be made within one year of the date a divorce order is made – for de facto spouses an application must be made within two years of the date of separation. The Court may in its discretion give permission for a person to apply for spousal maintenance out of time if failure to make a spousal maintenance order would result in hardship to a child or the person applying.
In general terms there are two forms of spousal maintenance that is, periodic and lump sum. For periodic spousal maintenance, payment of weekly, monthly or yearly amounts is required. For lump sum spousal maintenance a lump sum is paid to the person receiving the maintenance. The Court can also make an Order requiring the transfer of property or assets to a person as payment of spousal maintenance.
Periodic spousal maintenance is usually for a fixed period of time say, three years as an example however a spousal maintenance order can be made for the life of a person. This is in very rare circumstances. Spousal maintenance can continue even after final property Orders have been made which give both parties a clean break from the other financially.
A spousal maintenance order will end once the fixed period has lapsed or when one of the following occurs:
- Death of the person making the payment;
- Death of the person receiving the payment; or
- Remarriage of the person receiving maintenance.
The Court in its discretion may also vary spousal maintenance orders at any given time on application by a person. To vary a spousal maintenance order the court must be satisfied that since the order was made the circumstances of one or both parties have changed, the cost of living has changed enough to warrant a change, the amount payable under the Order is not proper or adequate (only if the Order was made by consent) or there were relevant facts which were not available to the court at the time of making the original spousal maintenance Order.
If you are concerned that you may be subject to a spousal maintenance application or believe you may be entitled to spousal maintenance, it is the first steps is to seek legal advice from an experienced family lawyer. At Forge Legal, our family lawyers have decades of combined experience and are well-versed in the complexities of spousal maintenance Orders. We can help you assess whether you are at risk of paying spousal maintenance or whether you are entitled to spousal maintenance. We strive to achieve outcomes for our clients that secure their financial future and enable them to move forward. Call Forge Legal now for a no obligation strategy session with one of our experienced family lawyers on 1300 0 FORGE.