Is Spousal Maintenance a “Meal Ticket” for Life?
As a result of some recent decisions in the more senior courts we have seen a move away from life time maintenance awards and a replacement with fixed term maintenance orders. In a recent case the court refused to allow a wife’s appeal against the period over which maintenance was paid keeping an end date for the payment of maintenance. In June 2018 the Supreme Court ruled that a husband should not have to make life long payments to his wife.
What is spousal maintenance?
Spousal maintenance or periodical payments are regular defined payments following separation and/or divorce. These payments are made from the greater earning spouse to the financially weaker spouse to bridge an inequality in income and the meet the financial needs of the spouse earning less. Although spousal maintenance payments are sometimes made following an informal agreement between the separating couple, more often than not they are paid following an Order of the Court.
What about a clean break?
A clean break means that your financial claims against each other are dismissed which means that neither spouse can make a claim on the other ever again. For a court to order a clean break on the payment of maintenance it must be satisfied that a spouse can survive financially after the divorce without undue hardship. A clean break might place unreasonable hardship on the spouse who has been at home with the children, or who has given up their income in order to support the financially stronger spouse.
In rare circumstances, generally where the assets available far exceed the needs of the parties, it may be possible to capitalise maintenance in to a one off lump sum payment instead of the ongoing smaller monthly amounts. In reality this is not common.
Is spousal maintenance available to help with the cost of children?
There is a difference between spousal and child maintenance. The latter is based on a statutory formula and based on the gross income of the paying parent regardless of their outgoings. Spousal maintenance is based on the reasonable needs of the receiving spouse and the paying spouse’s ability to meet that need. Child maintenance is intended to cover the costs of a child to the carer parent but more often than not it’s not enough and an element of spousal maintenance also needs to be taken into account especially in terms of the cost of providing a home. Child maintenance can be resolved by agreement or alternatively dealt with by the Child Maintenance Service who are able to force payment in line with prescribed rates. These rates are shown at https://www.gov.uk/calculate-your-child-maintenance.
How does the Court decide whether to Order Spousal Maintenance?
Courts in England and Wales have a reputation for awarding generous divorce settlements to the financially weaker party, having previously been termed ‘the divorce capital of the world’ for this very reason. English law says that wealth should be split equally between a divorcing couple even if one spouse is the main breadwinner. Spousal maintenance has been interpreted generously in the past but judges are clearly making moves to limit this ‘meal ticket for life.’
Whilst previously, Judges have indicated a willingness to Order spousal maintenance until one of the parties dies, this is falling out of judicial fashion. In two key cases, judges have signalled they are opting to place time limits on life-long post-divorce maintenance payments and now expect the financially weaker spouse to eventually go out to work. The court will seemingly hold the view that people have some earning capacity unless they are a few years off retirement and thus can go to work and earn money, even if they had not previously done so.
How does the approach taken in England compare with the rest of the world?
Whilst other countries seem to accept that spousal maintenance is an essential tool in bridging the difference in income, it is unusual to award open-ended maintenance orders. In Scotland, maintenance is only usually payable for three years following a divorce, in France the maintenance period lasts eight years and in Norway and Greece it is usually three years. The spouse is expected to generate their own income after this time.
What legislation allows the Court to adapt their approach?
The Matrimonial Causes Act 1973 is the relevant law in this area and governs financial settlement upon divorce. The law does not provide a term for maintenance, it has been said to be unclear on this point and as such judicial discretion comes in to play. Baroness Deech, a cross-bencher in the House of Lords, is seeking urgent reform of the law. Her Divorce (Financial Provision) Bill includes a provision that would limit maintenance payments to five years except in exceptional circumstances. Of course, to limit maintenance in this way brings it’s own difficulties. A wife who has not worked for 20 years is unlikely to match her husband’s income in just 5 years, this limit could therefore result in a result that is grossly unfair.
How can the law be both consistent and fair?
Lady Hale, president of the Supreme Court, said in an April that she sees the goal of divorce settlements as being “to give each party an equal start on the road to independent living.”
Lady Hale has expressed support for lifetime payments in some situations, she said that settlements cannot ignore the fact that someone who has given up work to concentrate on family responsibilities will never make up what they have lost and an equal start “is bound to involve, for most couples, an element of compensation for the disadvantage”.
Perhaps the best way forward would be to clearly prescribe limited and exceptional circumstances whereby a Judge can order joint lives maintenance. It is accepted that this would involve some discretion, however this would seem preferable to a decision that left a financially weak party left to fend for themselves financially when it is clear that this would not achieve fairness or equality.
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