Solicitor Rebecca Ledgerwood, in our Family Law team, explains what spousal maintenance is and how it may be calculated.
When considering a financial settlement following a divorce, one of the Orders which a Judge can make is for spousal maintenance, also known as periodical payments. This is where one spouse makes payments, typically on a monthly basis, to the other.
In England and Wales, we don’t have a prescribed formula for calculating the level of maintenance payable; instead we look at the financial need of one spouse who may be earning less or not working at all, and assess whether the other higher-earning spouse can afford to support them.
You can apply to the court for ‘interim’ spousal maintenance, which is payable whilst your divorce is being finalised. The test is the same as the factors applied to assess long-term maintenance, namely whether there is a financial need on one side and a corresponding ability to pay on the other.
Budgets are therefore very important when preparing an application for spousal maintenance, and each spouse must consider carefully how to present their monthly needs. Details as to income must be disclosed on both sides to allow the court to make an assessment of the affordability of maintenance.
In carrying out this assessment, the judge has to consider whether it would be appropriate for the parties to become financially independent of each other, sooner rather than later. This is known as a ‘clean break.’
If a Judge is satisfied maintenance is payable, there are various formats which it could take:
- Joint lives maintenance: Where substantive maintenance is required and the Judge cannot reliably foresee that a spouse can adjust to their new circumstances, maintenance can be ordered on a joint lives basis. These orders are less common than they were, as it means the paying spouse has to support the ex-spouse for the rest of his/her life. It may be appropriate in cases where the marriage has been very long, and one spouse has a restricted ability to work.
- Term maintenance: If the judge is satisfied that there is a need for substantive maintenance, but considers that the receiving spouse will in time be capable of becoming financially independent, a fixed term maintenance order can be made. This means that maintenance is payable for a specified period of time, and the order records when it will end. This could be a fixed time period, or on the occurrence of an event such as the youngest child finishing school.
- Nominal maintenance: Nominal maintenance is an order providing for maintenance of 5p or £1 per annum. This can be ordered on a term or joint lives basis. No actual maintenance is paid, but the recipient spouse retains the ability to return to court and apply for the ‘nominal’ order to be increased. This provides a ‘safety net’ in cases where no maintenance is needed now, but we can’t be sure if it will be needed in future.
Variation of spousal maintenance
Spousal maintenance is always capable of being reviewed, both upwards and downwards, on application by either party to the court, or by voluntary agreement. The assessment of whether to vary is made based on the parties’ current financial circumstances.
Spousal maintenance will always terminate on the remarriage of the receiving spouse or on the death of either party. Child maintenance is usually paid separately in cases where there are minor children, but can be combined with spousal maintenance to form a ‘global order.’
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This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.