Having just caught the end of that episode of Friends in which Janice talks about “riding the alimony pony”, we at CFLP thought that it might be a good time to focus on the part that maintenance plays in a financial settlement on divorce or civil partnership dissolution.
Maintenance, or “periodical payments” (or “alimony” in the USA), is one of a number of tools that the law carries to enable people to divide up their finances and property on relationship breakdown. Periodical payments are regular payments made by one former spouse/civil partner to the other, usually each month. The intention is usually to assist the receiving party to pay living expenses. If you want to know more about the tools the law uses to make a comprehensive financial division, have a look at our factsheet which you will find here.
There are two types of maintenance: child maintenance and spousal maintenance. Child maintenance is usually dealt with by an application of the child support formula to the income of the parent who lives apart from the children for more of the time. You can find the formula at www.cmoptions.org. The formula does not apply to non-resident parents earning more than £104,000 per year, in which case the court is also able to make orders. Spousal maintenance is available to former spouses and civil partners, but is not available to people who have lived together without being married or in a civil partnership. Spousal maintenance is separate from child maintenance, and isn’t dependent on having children. Its aim in most cases is to enable the less economically successful former partner to meet their lifestyle needs, or those of the family, by payments from the other former partner if they do not have enough income themselves.
Spousal maintenance orders always last for a length of time. If maintenance is agreed or ordered to be paid on a “joint lives” basis, it lasts until either party dies, or the person receiving the regular payments remarries. Maintenance can also be agreed or ordered to be paid for a specific term, which may be as little as a few months or as long as until the youngest child finishes tertiary education, or until retirement. A term may be expressed to be non-extendable, in which case there will be no opportunity for the recipient to argue that payments should not end at the contemplated time. If the term is not stated as non-extendable, it is up to the person receiving the periodical payments to apply to the court for an extension to the timescale if needed, with a good reason, before the timescale expires.
All maintenance orders are variable, and it is open to either the payer or the recipient to ask for payment levels to be altered if circumstances change. There would be grounds to make a variation application if, for example, a maintenance recipient starts cohabiting with a new partner, although there is no principle of law that says maintenance payments from a former spouse should finish in those circumstances. There is also the opportunity for either party to apply to have the regular payments turned into a lump sum instead, if there is enough cash to enable this to happen. This is called capitalisation, and lawyers or the court will usually look at tables developed by actuaries to establish the level of payments that need to be made to enable the recipient to have enough money to last for the remainder of the order’s duration.
It used to be the case that joint lives maintenance orders were made in the majority of divorce cases, particularly where there were young children. However, recent case law has indicated that court practice is changing, and it is by no means certain these days that the court will award maintenance at all, let alone for joint lives. A recent High Court case has established that the court has an obligation to consider whether a term should be imposed on a maintenance order, to enable the court to bring the parties’ financial obligations to each other to an end as swiftly as possible. Another recent High Court case made it clear that the recipient must need maintenance for it to be ordered; maintenance cannot be used as a method simply of sharing resources. It is clear that maintenance orders are harder to justify that they used to be. The courts now seem to want a good reason before ordering periodical payments beyond a reasonably short term, perhaps to enable the recipient to retrain or gain skills for entry/re-entry into the employment market.
Interestingly, this shift in perspective is occurring as a new generation of judges is coming through to the High Court. Many of these judges are working women who find the idea of joint lives maintenance to be anachronistic at a time where men and women are educated equally, the demands of parenthood affect both genders (particularly after divorce) and many families have two wage-earners. Nevertheless, it is firmly written in statute that the court must consider all the circumstances of the case before making an order for financial division on divorce, and at CFLP we understand that every case is unique: just because joint-lives maintenance is not appropriate for all does not necessarily mean that it won’t be in your case.
Do give us a call if you would like to talk through any of the issues raised in this blog.
*This blog is written for informational purposes as a free public resource. Nothing in this blog or elsewhere on this website should be construed as legal advice. Although we welcome discussion, please note that CFLP is unable to give legal advice in response to comments left under this article.