When people separate, they often find themselves struggling financially now that they are only living off one income. Statistically speaking, at the point of separation and the creation of two separate residences for the family, an average family needs to either reduce its expenditure by 30% or increase its income by 30% to make financial ends meet. This all has to happen at a time of enormous emotional upheaval as well as the physical demands of a relocation and juggling children transitioning from one household to another. If a couple have been working in the same business, this creates added financial pressure as one steps out of a tax effectively paid role, with income splitting available to the couple, to the business having to find another salary to cover the costs of the exiting spouse.
Often the parent who has been primarily responsible for the care of children, has been either working part time or indeed has been engaged full time in non-remunerated work by being at home caring for the children and family as a whole. For this parent, the idea of returning to paid employment or having to upskill in order to find work, without any idea about how to juggle children and the demands of retraining, and all the while trying to make reduced household finances last -can be overwhelming, to say the least.
When a couple, be they married or de facto, separate, the financially dependent person has a potential claim for spousal maintenance from their former partner. The Court has power to make interim orders for spouse maintenance (which is the term used for de facto or married couples) pending a final order in relation to property and spouse maintenance. That interim order can include an order for the transfer of real property or other assets as well as or instead, recurring periodic payments from one spouse to another. In short, a lump sum, asset or periodic amount can be orders although in most interim cases – it is periodic payment which is assessed based on one person’s ability to pay the maintenance sought and the other person’s need to receive that maintenance. Where one spouse has a significantly higher income than the other, the payment is most likely to come from the excess of income v personal expenditure. Where it is a line ball call, the Court will observe that it cannot “get blood out of a stone” and an interim part property settlement may be agreed between the parties in which they both receive a fixed some to use how each of them sees fit.
As many couples struggle financially post separation, they are often unable to reach an agreement between themselves about who should get what pending a final settlement or Court order. Where they cannot reach agreement, separating couples can obtain legal advice to enable at least an interim agreement be reached. In the absence of a negotiated outcome, when a separating couple cannot agree as to who should receive what income, the Court can make orders for interim spousal maintenance payments.
An application for spousal maintenance can be made by a party to a marriage or someone who was in a de facto relationship. When an application is made, the Court considers certain factors when establishing whether someone has the right to spousal maintenance. The Court looks at the financial needs of the person making the application and the capacity to pay any maintenance of the person who payment is being sought. Whether that be a lump sum or a periodic payment.
The is no precise formula to determine the sum of maintenance to be paid as each case is decided on its own facts and hence you should obtain legal advice which is relevant to you. It is important not to listen to family or friends who may have been through the Family Court system before as their case or facts are unlikely to mirror yours. The Court will make an order based on one person’s needs to receive maintenance and the other party’s ability to pay. When assessing eligibility for maintenance there is a very long list of factors the Court takes into account when being asked to make an order for maintenance. These are listed in s75(2) for married couples who separate and s90SF for separating de facto couples. Some of the factors the Court may take into account may include the following:
- Whether the applicant has care of a child of the relationship who us under 18 years old;
- The age and physical and mental health of the parties;
- The capacity for employment of the parties;
- Whether either party is responsible for supporting another person;
- How much the applicant party has contributed to the other parties’ financial resources.
(This is not an exhaustive list and advice must be sought in each case to determine which of the long list of factors might apply to you)
Separation is difficult for everyone, made even more complex by the financial stress that a family feels they are under which often accompanies separation. At Caroline Counsel Family Lawyers, we can assist you and work with you to help you understand any spousal maintenance you may be entitled to.
The information in this blog does not constitute legal advice and cannot be relied upon by you. If you require advice specific to your situation you must contact Caroline Counsel Family Lawyers for legal advice. The contents of this blog are relevant as at 19 August 2019. We recommend you obtain specific advice relevant to you and your family’s situation.
By Caroline Counsel and Sean Robertson