A marriage breakdown can come with serious financial consequences. Careful consideration should be made for discussions pertaining to mortgage, rent and bills. In cases where one party lacks the financial capacity to meet their needs, spousal maintenance is crucial to ensure a reasonable quality of life. Payments from one spouse to another can alleviate the financial pressure caused by relationship breakdowns
Spousal maintenance can be defined as the financial support of a partner who is unable to financially support themselves. An order for payment can be on a lump sum, periodic or third party basis.
An application for spousal maintenance can be made any time after the date of separation but must be made within twelve months of a divorce order. Where leave has been granted, the requirement to apply within twelve months may be waived. For de facto relationships, an application must be made within two years of separation, with no exceptions.
Generally speaking, spousal maintenance is a short term measure designed to allow the other party to develop the financial capacity to live independently and without support.
Spousal maintenance: An obligation or an option?
Spousal maintenance is an obligation.
The Court has the power to order a spousal maintenance if the applicant is not able to meet his or her own reasonable needs; and the respondent has the capacity to pay or to contribute to those needs.
When faced with an application for spousal maintenance the Court will consider the following:
- The reasonable needs of the applicant. When determining the “reasonable needs” the Court can have regard to the standard of living enjoyed during the marriage.
- The capacity of the applicant to meet their own needs. For this, the Court will look at their income and earning capacity if they are not currently employed.
- The capacity of the respondent to contribute to the needs of the applicant.
The Court will also consider (amongst other things) all the issues set out in s 75(2) of the Family Law Act 1975. These considerations include:
- the age and state of health of the parties;
- the income, property and financial resources of each of the parties;
- whether either party has the care of any child under 18 years of age;
- the commitments of each party; and
- the cost of a “reasonable” standard of living.
The liability of a party to pay for the financial support of their spouse will depend on their capacity to contribute to the reasonable needs of that party. However, after satisfying a need and ability, Australian Courts can refuse spousal maintenance if they consider it proper to do so.
Determination of the Amount to be Paid
When determining an application for spousal maintenance the court will have regard to:
- the reasonable expenses of the applicant
- the applicant’s income is to meet expenses
The Court will also have regard to child support being paid, or reasonably payable.
Moreover, the Court does not however have regard to an income tested pension.
Furthermore, when determining an application’s reasonable needs, the Court will also consider their ability to earn an income. An applicant who cannot earn an adequate income, may be given an order or opportunity to maintain themselves and to enter a training course to enable the applicant to obtain an adequate income.
When a party is unable to financially support themselves, the Court must then determine whether the other party has an ability to assist with financial support by having regard to the:
- income of the respondent;
- reasonable expenses of the respondent; and
- what remains after the respondent meets their own expenses.
When considering the respondent’s ability to pay spousal maintenance, the Court will not make an unreasonable order that requires the applicant to resort to their own capital.
The Court does not need to ensure that a party to a marriage retains the same standard of living during the marriage. Nonetheless, the Court will have regard to the standard of living and will make orders accordingly, if the respondent’s wealth permits it.
If a long term application is sought, the Court will also consider the entitlement of that party to property settlement. Usually, the result of a final determination of property will remove the need for spousal maintenance.
Who is entitled to spousal maintenance in Australia and who is obliged to pay?
A person to a marriage is obliged to pay spousal maintenance to the other party where the paying person can do so and the person receiving the financial support is unable to adequately support themselves for the following reason of:
- taking control and care of a child of the marriage under the age of eighteen years;
- age, physical or mental incapacity to attain employment; or
- for any other adequate reason, with examples ranging from family income and resources to commitments to support oneself and children, and the
- standard of living that is reasonable and to be expected within familial settings.