The purpose of this post is to answer the key questions that often arise in spousal maintenance matters.
What is spousal maintenance?
Spousal maintenance is financial support paid by a party to their former partner in circumstances where that party cannot adequately support themselves.
This may be the case where one party’s income during the relationship was used to primarily support the family. In contrast, the other party predominately cared for the children or was unable to support themselves because of:
- Having the care of a child under the age of 18;
- Age or physical incapacity which impacts on the other party’s ability to work; or
- Any other adequate reason.
If this is the case, the higher income earner may be liable to pay this maintenance to the other party.
Spousal maintenance can either be paid for a short period of time (usually until a property settlement has occurred, or until the other party is able to financially support themselves). In some rare cases, it can even continue indefinitely.
Am I entitled to spousal maintenance?
To determine if one party is entitled to spousal maintenance, they must establish a need and demonstrate that:
- They are not able to support themselves; and
- There is a shortfall between their income (if any) and their reasonable weekly expenses.
Some factors a Court would consider include the age and health of the party, their income or income earning capacity, the care of children, as well as the property and financial resources available to them.
I think I have a need – what next?
Not only must a party be able to establish that they have a need for spousal maintenance, they must also be able to establish that their former spouse has the capacity to pay.
The Court will therefore also consider the income and reasonable weekly expenses of the former spouse, and whether or not there is a surplus of funds available.
Unfortunately, it is not uncommon for people to limit their income and inflate their expenses during this time. As part of any claim, a forensic review of both parties’ financial documents can be undertaken. This will evidence the actual extent of the income and expenditure to determine whether or not it is reasonable. There is a saying in family law, and that is “bank statements do not lie!“.
How is it awarded?
Spousal maintenance can be paid:
- By agreement between parties. This can be an informal agreement or an agreement that is then made legally binding by entering into Consent Orders; or
- Pursuant to a Court Order, where an agreement cannot be reached and a Judge is left to decide the outcome and makes an Order.
It is important to note, however, that if an agreement has been reached and spousal maintenance payments stop, without Consent Orders or a Court Order requiring the payment, it cannot be legally enforced by a Court.
If no agreement can be reached, you may need to commence an Application in the Federal Circuit and Family Court of Australia seeking orders for spousal maintenance.
In practice, the majority of experienced family lawyers will always attempt to negotiate an agreement. Why? Significant unnecessary time and costs can be incurred by both parties if they are forced to have the matter heard by a Judge.
Can I still receive spousal maintenance after my property settlement?
The same limitation date applies in spousal maintenance as it does in property settlement matters. That means that an application must be commenced within two (2) years from the date of separation for de facto relationships. For divorced couples, it is one (1) year from the date the divorce becomes final. The obligation can continue indefinitely if parties are married and do not get divorced; however, it is unlikely in most situations.
If the Court is asked to make an order for spousal maintenance after a property settlement, the Court would consider the assets that each of you receive under the agreement, and whether that is sufficient to support either party. If there are insufficient assets to distribute between you, the Court may order spousal maintenance.
How can I limit or prevent my ex from claiming?
A party’s right to claim spousal maintenance can continue after a property settlement, unless:
- The limitation date (referred to above) has lapsed; or
- It has been specifically dealt with in the Consent Orders (for example, if there is a transfer or an asset to a party and that asset represents spousal maintenance); or
- Where parties have entered into a separate document, called a Binding Financial Agreement which is a legally binding agreement that can provide, amongst other things, the spousal maintenance that is payable. It can also state that neither party will make a claim for spousal maintenance against the other.
Spousal maintenance is a complex area of family law which arises often and is addressed as part of resolving financial matters at separation.
Given the complexity, we strongly encourage you to engage an experienced family lawyer if you think this may arise in your situation.
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By Alana Pointon
The information contained on this site is for general guidance only. No person should act or refrain from acting on the basis of such information. Appropriate professional advice should be sought based upon your particular circumstances.