Spousal Maintenance

Married and de facto couples have a legal obligation under the Family Law Act to provide financial support to one another. If that financial support is not forthcoming, then either party to a marriage or de facto relationship is entitled to apply to a Court for orders that the other party pay maintenance to them.

 

Spousal Maintenance is not child support. It is paid to a spouse or de facto spouse for the maintenance of that person.

There are two requirements that must be satisfied before a Court can make a Spousal Maintenance Order:

 

  • That the Applicant has a financial need for the support. That is, that the Applicant does not have sufficient resources to meet their reasonable living expenses. Any entitlement of the party to an income tested pension is ignored in determining the Applicant's income for this purpose;

 

  • That the other party has the capacity to pay any Order for spousal maintenance. That is, the other party has excess income after their reasonable living expenses are taken into account.

 

An obligation to pay Spousal Maintenance cannot be avoided by avoiding income. In determining a party's capacity to pay spousal maintenance the Court can consider a person's potential earning capacity and not just their actual income For example, where a person leaves gainful employment to avoid an obligation to pay spousal maintenance, the Court can take into account the potential income and has the power to order the sale of the other party's assets to pay spousal maintenance.

 

Similarly, a respondent to a spousal maintenance claim can challenge the need aspect of the claim if the Applicant is not working to their full capacity.

The court has the power to make lump sum or periodic payments for spousal maintenance. For periodic payments the Court will ordinarily set a fixed period for the payments to provide the receiving party with an opportunity to establish themselves in the workforce, to complete studies and the like.

Lump sum orders can also be made and are often linked with a property settlement whereby a party may receive a greater proportion of the net assets than they would otherwise be entitled to receive.

 

If the court is satisfied that there is a need for the Applicant to receive spousal maintenance and the Respondent has a capacity to pay spousal maintenance, the Court may order maintenance to be paid on a periodic basis having regard to the need of the Applicant and the paying party's capacity to pay. The amount to be paid may be limited to the paying party’s excess income after paying their own reasonable expenses.

For lump sum spousal maintenance there are a number of different approaches available to the Court depending on what assets are available. One approach involves calculating the Applicant's need over a given period of time (for example a whole year) and paying to the an additional lump sum from the property settlement. Another option is for the Applicant to receive an additional percentage component from the property settlement as spousal maintenance.

The Court can also make urgent spousal maintenance orders called interim Orders. Interim spousal maintenance orders can be made by way of periodic payments and lump sum amounts.

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