Spousal maintenance payments are there to help spouses who do not have sufficient funds to meet their income needs and the paying party has enough income to make this affordable for them. But what if circumstances change? Are these taken into account and what affects payment of spousal maintenance?
Spousal maintenance payments are there to help spouses who do not have sufficient funds to meet their income needs and the paying party has enough income to make this affordable for them. But what if circumstances change? Are these taken into account and what affects payment of spousal maintenance?
If you have a family law issue and you require legal advice to understand your options, contact specialist family law solicitor Joanne Major. Joanne is the founder of her specialist family law firm and has spent her 25-year legal career specialising in family and matrimonial cases.
How much is spousal maintenance?
There is no set amount of spousal maintenance because it largely depends on the couple’s financial situation which is unique to them. If the matter has progressed to court, then the amount of maintenance will be considered what is “fair” depending on the assets available and the needs of each party. However, the court has wide discretion on what it constitutes as fair.
There are many factors that the court uses to determine the amount of spousal maintenance. This includes:
- Who the children live with
- The income needs of the parties
- Whether both parties are working
- The total marital income before separation
- The length of the marriage
- The ages of the parties
- Both parties earning capacity
- Whether either party can manage without help from the other
- Assets within the marriage
- Standard of living enjoyed during the marriage
Are spousal maintenance payments guaranteed?
Spousal maintenance payments are not guaranteed and a change in circumstances of either party can lead to it being varied or dismissed entirely. If there are no changes, then spousal maintenance will last for as long as both parties agree it is needed, or determined by court order.
What circumstances can cause spousal maintenance to be varied or dismissed?
Life is unpredictable, and it is simply impossible to build every scenario into a maintenance agreement or order. Fundamentally, if the money is not available, then someone’s ability to pay maintenance will be affected. Therefore, spousal maintenance may be ended or varied in the following circumstances:
- If the recipient remarries or cohabits. If the recipient remarries, then spousal maintenance will automatically cease. However, this is not automatic if they cohabit, unless this is stipulated in a maintenance order.
- If the recipient can either support themselves or their financial needs are reduced. For example, this could happen when the children finish school or university, or they leave home
- If the recipient receives a sum of money, this could be from an inheritance or redundancy payment
- If the paying party loses their job or their income is reduced in some other way
- If the paying party becomes ill and this hinders their ability to pay
- If the paying party receives a promotion which increases their salary
Spousal maintenance stops automatically if either party passes away. Significantly, if the paying party remarries or enters into a civil partnership, it does not end spousal maintenance, which remains payable. If this change in circumstances reduced their income, an application for variation would need to be made.
Will receiving spousal maintenance affect income or tax?
No income tax is payable on any spousal maintenance received because the paying party will already have paid tax on it. This has been the case since 1989. However, it may affect the amount of universal credit and other benefits you are entitled to.
Can someone hide their income to avoid paying spousal maintenance?
Your ex can certainly try to hide their income to avoid paying spousal maintenance, however if the matter proceeds to court, you will both be required to complete full financial disclosure on a Form E. If they do not provide a true and accurate picture, then they may commit fraud for which the court is likely to take a dim view and sanction them accordingly.
Can I stop paying spousal maintenance?
As referred to above, spousal maintenance automatically ends if the receiving party remarries or if either party dies. In every other situation, once spousal maintenance has been established, the payer cannot stop it until the agreed period of payments had ended.
If you cannot agree on a change via mediation, then you can apply to court to have the maintenance reduced or terminated altogether. However, there is no guarantee the court will agree with you, particularly if reducing or stopping the payments causes the other party undue hardship.
What circumstances might require a variation application?
Significant changes, alongside those mentioned above, to either party’s financial position might also include a new job with a much higher salary, or inheriting or winning a huge sum of money. What is clear is that neither party should apply to court for a variation without being able to demonstrate that there has been a change from when the original order was made.
There are potential risks when applying for a variation of spousal maintenance which may affect the outcome. This includes:
- Uncertainty – because the court has wide discretion, predicting what will happen is very difficult
- Timing – if a variation application is made too soon after the original order, it may be hard to justify why it should be changed, unless there has been a significant (typically unexpected) change in circumstances
- Costs – these can be significant and can quickly become disproportionate to the amount of maintenance in issue
- Court proceedings are intrusive and emotionally draining
- Payments may increase or decrease, so obtaining legal advice at the outset as to the merits of the case is crucial
- The court’s attitude to long-term spousal maintenance is hardening, so those receiving maintenance ordered many years ago may face a less generous approach if a variation comes before the court
On an application for variation, the court can consider “capitalising” spousal maintenance. This means that the paying party pays a lump sum to the other in order to achieve a clean break. If this is a viable option, the court would consider whether the original order for maintenance should be varied downwards or upwards. A formula is used to calculate what would be an appropriate lump sum, and depends on whether the original order was intended to be paid for a specific period or for the parties joint lives.
Financial problems can create great anxiety for both paying and receiving parties. The key is to communicate clearly with one another and to seek legal advice early in order to reach an acceptable arrangement.
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