Spousal Maintenance: Practical Tips
The Family Law Act provides that a spouse may have a right to obtain maintenance for themselves from the other party to a marriage or a defacto relationship after separation.
A party may be found to be liable to maintain the other party after they separate to the extent that they are reasonably able to do so if the person seeking the maintenance is unable to support themselves adequately because of:
Their care of a child of the relationship under the age of 18 years;
Their inability to be gainfully employed by reason of their age, physical or mental incapacity; or
Any other adequate reason, which could include
Powers of the court in dealing with a spousal maintenance application
The court has wide powers in hearing a spousal maintenance application. The orders the court can make include:
An order that a lump sum amount be paid;
An order of weekly, monthly or yearly spousal maintenance payments;
An order that a property or asset be transferred to one party as a spousal maintenance payment.
An order for spousal maintenance continues until the remarriage of the recipient, the death of the payer or recipient or the change of financial circumstances for the payer or recipient. If a party starts a new de facto relationship, the court will take into account the financial relationship when considering whether a person is able to support themselves adequately.
Whilst courts have the power to make an order a permanent order, the more common orders made by the court are interim orders, which remain in place until a final property settlement order has been made or for a fixed period whilst a spouse is studying or upskilling.
Limitation period for commencing a spousal maintenance application
A married spouse must make an application within one year of the date on which the divorce certificate becomes final. A former defacto spouse must make an application within two years of the end of the relationship.
There is discretion for the court to extend this time if the applicant can show that failing to do so would cause hardship to the payee or a child of the relationship.
How to extinguish any future applications for spousal maintenance
The only way that a party is able to extinguish any future application for spousal maintenance is by entering into a financial agreement. These agreements are outside of the jurisdiction of the court and are binding and enforceable if the agreement complies with the requirements under section 90G of the Family Law Act. Before signing the financial agreement both parties are required to obtain independent legal advice as to the nature and effect of the agreement upon their rights and the financial advantages and disadvantages of entering into the agreement.
Practical tips for a party seeking orders for spousal maintenance
Attend upon a financial planner or an accountant to have them assist you calculating your weekly expenses.
This accounting exercise is likely to be better suited to your financial planner than your solicitor. They will be able to assist you in providing a reasonable calculation of your weekly expenses (to avoid criticism from the court that estimates have been exaggerated) but also to ensure that no expenses are missed, which can occur if an expense is a one-off expense per year and not a regular payment.
Collate the source documents to verify your reasonable expenses.
This will mean keeping copies of receipts or invoices of all purchases. If possible, payments should be made by card and not by cash to help easily identify how funds are spent.
Try and obtain documents from the other spouse about their capacity to pay.
The court will only be able to make an order for spousal maintenance if the court can point to a source for the payment to be made from. Obtaining copies of bank statements, tax returns and pay slips will assist to pointing to a source of income. A personal name search to identify any companies owned by the former spouse may point to an entity in which a spouse holds an interest.
Mitigation of any reasons why income cannot be generated.
In considering spousal maintenance applications, the court must look at the reasonable steps that a payee has made to mitigate their need for spousal maintenance. Therefore, if a party is unable to work due to health concerns, a report should be obtained from the treating doctor about their health and capacity to work. If a party requires upskilling for them to obtain a job, evidence should be collated about the further study required, including costs and length of the study.
Practical tips for a party opposing an order for spousal maintenance
Do an accurate assessment of your reasonable expenses to work out if there is any capacity to pay spousal maintenance.
A court can only make an order for spousal maintenance if a source of income can be identified. Therefore, if after payment of your reasonable expenses there is no surplus income from your salary the application for spousal maintenance will fail.
Seek disclosure from the other party.
This includes but it not limited to disclosure of their assets, their attempts to obtain employment and medical reports. Seeking disclosure allows your solicitor to assess whether the amount of spousal maintenance sought is reasonable or if the payee is not doing all things possible to mitigate their need to seek spousal maintenance.
Consider making an offer. The costs that you may pay in defending a spousal maintenance application may be greater than the spousal maintenance you may be assessed to pay.