When would you or your ex-partner be required to financially support one another? The formal term for this is called spousal maintenance (when referring to a married couple) and maintenance (when referring to a de facto couple).
The Family Law Act provides that a spouse or party to a de facto relationship must maintain the other spouse or party to a facto relationship provided that one party cannot support themselves, and the party has the capacity to support the party seeking maintenance. To receive maintenance, the Family Law Courts have held there is a four-stage process:
The Applicant’s ability to support themselves adequately
The applicant (the person seeking maintenance) must firstly be unable to support themselves adequately because:
- They have care or control of a child of the relationship; or
- There have an age-related or physical or mental incapacity for appropriate gainful employment; or
- For any other adequate reason.
In assessing a maintenance claim, the first step is to compare the applicant’s weekly income vs. their weekly expenses. If their expenses are greater than their income it is good evidence that the person is unable to support themselves.
However, the term “adequately” is also important as it does not mean the bare minimum to survive and if possible, should return both parties to their pre-separation standard of living.
Recently, the Court heard an appeal against an order for spousal maintenance based on the future anticipated financial circumstances of the Wife which was worded to commence upon her moving out of the former matrimonial home. The Husband appealed on the basis that the Court made no findings about when the Wife would leave the home and there were no findings about what the financial circumstances of the parties would be when she actually left the home.
The appeal was ultimately dismissed and the maintenance order upheald. The Court noted that:
- The primary purpose of maintenance is to provide for the future needs of parties.
- It is quite common and invariably the case that orders for spousal maintenance are made based on anticipated but not yet incurred expenses.
- The Wife gave evidence of inquiries into the availability and likely costs of rental accommodation and had given evidence that she would shortly move out.
- If the Wife did not move out of the home, the Husband could bring the matter back before the Court.
The Future needs of the Applicant
The second stage involveds a consideration of the Applicant’s needs – Those are needs are defined as:
- The age and health of the parties.
- The income, property and financial resources of the parties and their capacity for appropriate gainful employment.
- Whether either party has care of a child of the relationship.
- The commitments of each of the parties which are necessary to support themselves and their children.
- The responsibilities of either party to support another person.
- The eligibility of one party to receive a pension, allowance, or benefit (e.g. Centrelink payments). Importantly, the Act provides that an income-tested pension, allowance or benefit is to be disregarded.
- A standard of living that in all the circumstances is reasonable.
- The extent of whether the maintenance would increase the earning capacity of the other by allowing them to undertake training or education.
- The effect of the order on the ability of a creditor to recover debt from the parties.
- The duration of the relationship and the effect it may have had on the earning capacity of one of the parties.
- If one party is now living with someone else, the financial circumstances of that person.
- Whether a party is bankrupt.
- Any child support assessment in place.
- Any formal binding financial agreements entered into by the parties.
- Any other circumstances the Court considers should be taken into account.
The Respondent’s capacity to pay
Many applicants are able to show they cannot support themselves but they must also show that the respondent have the capacity to meet the shortfall. Similarly this is assessed by comparing the respondent’s income and expenses. If there is a surplus, it is good evidence in support of maintenance being ordered. Capacity is not limited to just income and includes property and capital. For example the Courts have held that if the Respondent has control of a company with significant assets they should have the capacity to borrow funds in the interim to meet a maintenance order.
Discretion of the judge
In determining a maintenance application, “reasonableness in the circumstances” is the guiding principle. For example, the Court has held that the applicant should not have to use up all of their capital and assets to support themselves adequately. However, where the line should be drawn will depend on the circumstances of the individual cases.
There are time limits for seeking spousal maintenance. 12 months after a divorce order has taken effect for married couples and 2 years after separation for a de facto couple. If you are considering seeking maintenance from your ex-partner or you are disputing the need for maintenance, please contact our office on (02) 4944 3322 to make an appointment with one of our family law solicitors.
