What is Spousal Maintenance?
Spousal Maintenance is financial support paid by one party to a marriage/de facto relationship to their former partner/spouse in circumstances where they are unable to adequately support themselves.
Under the Family Law Act 1975, a person has a responsibility to financially assist their former spouse/ de facto partner if that person is not able to meet their own reasonable living expenses from their own income or assets.
Generally speaking, for a person to have an entitlement to spousal maintenance, there needs to be a significant disparity in each party’s income.
What does a court consider when making a decision?
The necessary elements that must be proved for a person to have a right to the payment of spousal maintenance, under s72, are:
- Capacity – That one party is reasonably able to support the other party;
- Need – the other party is unable to support themselves adequately from his/her own income earning capacity or financial resources by reason of:
- having care/control of a child of the relationship/marriage under 18;
- physical or mental incapacity to be employed;
- any other reason.
In the exercise of discretion by a court to make an order for the payment of spousal maintenance, the court may have regard, per s75(2) of the Family Law Act, to the following kinds of factors about both of you:
- your age and health;
- your income, property and financial resources;
- your ability to work;
- what is a suitable standard of living; and
- if the marriage/relationship has affected your ability to earn an income.
Upon the Court being satisfied that a person is unable to support themselves adequately from their own income and resources, and that the other party has the capacity to support the first person, the Court can make such orders in relation to the payment of spousal maintenance as it considers proper: section 74 Family Law Act 1975.
In determining the amount of spousal maintenance to be paid, reasonableness is always the guiding principle.
Is there a time limit for applications for spousal maintenance?
If you were married, you must make a spousal maintenance application within 12 months of the divorce becoming final.
If you were in a de facto relationship, you must make a spousal maintenance application within 2 years of the breakdown of the relationship.
However, these time limits do not apply in circumstances where a party is seeking the ‘revival’ of a previous spousal maintenance order that was made. This means that if a spousal maintenance order is made during proceedings, a party may pursue a further spousal maintenance order even after the time limitation lapses.
Furthermore, section 44 of the Family Law Act, which provides that an application for spousal maintenance/property settlement must be made within 12 months of the date of the divorce) will not of itself prevent a person from pursuing a spousal maintenance claim after the time limitation has lapsed, as leave can be granted by the Court under s44(4) or s44(6) to institute proceedings out of time if the Court is satisfied that:
- Hardship would be caused to a party to the marriage/relationship if leave was not granted; or
- If at the end of the time limitation period, that applicant was unable to support him/herself without an income tested pension/allowance/benefit: s44(4) and (6) Family Law Act.
The case of Bodilly & Hand highlights the possibility of one party being required to pay ongoing spousal maintenance for years after final property settlement.
Case Study: Bodilly & Hand
In the recent case of Bodilly & Hand [2019] FamCA 210 the Wife was able to renew a spousal maintenance order seventeen years after separation in circumstances where the Husband had a new family and was heading towards retirement.
BODILLY & HAND – THE FACTS
The parties separated in 1998. In 2000 the parties reached agreement that the Husband pay to the Wife maintenance of $500 per week.
There was little contact between parties for many years. The Husband remarried, had 2 more children, worked hard & accumulated significant assets and enjoyed a high income. The Husband’s new assets were all registered in name of his new wife.
The husband had at the time of the application to the Court, paid spousal maintenance to his former wife for 17 years.
In 2012, the Wife successfully sought an increase in spousal maintenance payable by the Husband to $3,323 per week.
Her application to the court now sought further spousal maintenance orders, and approached the application as a variation (as opposed to a renewal) of those spousal maintenance orders made in 2012, such that the Husband pay to the Wife $3,000 per week.
The Husband sought a discharge of the previous spousal maintenance orders and a fresh consideration of the necessity of any order being made in favour of the Wife.
At the time of the application, the Husband was 62 years of age & he wanted to retire from the work force. The Wife was 61 years of age and was suffering from a medical condition. By November 2009, the Wife was housebound with a diagnosis of multiple sclerosis and, unlike at the time of her last application, she was now in receipt of benefits from NDIS.
LOOPHOLES WHEN THE TIME LIMIT HAS LAPSED: SECTION 44, 81, 83 FAMILY LAW ACT
Spousal maintenance is generally ordered to adjust for any disparity between the incomes / earning capacities of the parties. It is usually paid for a relatively short period after separation in which time the person in receipt of the spousal maintenance has the opportunity to retrain, re-enter the workforce or re-establish themselves.
This follows the ‘clean break’ principle set out in section 81 of the Family Law Act 1975 which provides that ‘as far as practicable, [the Court] make such orders as will finally determine the financial relationship between the parties to the marriage and avoid further proceedings between them.’
Section 81 of the Family Law Act 1975 (FLA) is not a barrier to a party making an application for spouse maintenance, even some 17 years after separation, if the applicant can satisfy the requirements for the making of such an order.
Furthermore, section 83 of the Family Law Act allows the Court to revive or vary a spousal maintenance application. In this case, the Wife relied upon this section as she was seeking a renewal of her spousal maintenance order.
Importantly, section 81 (clean break principle) was not a barrier to the Wife making an application for spousal maintenance, even some 17 years after separation, as the Wife satisfied the requirements of making such an order.
Furthermore, section 44 of the Family Law Act, which provides that an application for spousal maintenance/property settlement must be made within 12 months of the date of the divorce) will not of itself prevent a person from pursuing a spousal maintenance claim after the time limitation has lapsed, if at the end of the time limitation period, that person was unable to support him/herself without an income tested pension/allowance/benefit.
In this case, the Wife’s application was considered a new application (not a variation or renewal) and so section 83 did not apply, however, the Wife was granted leave under s44(4) to institute proceedings out of time as hardship would have been caused to her if leave was not granted and furthermore, at the end of the time limitation period lapsing, she was unable to support herself without an income tested pension.
BODILLY & HAND – THE DECISION
In determining the application, the Court was required to consider the following issues:
- Whether there exists a point in time where it is no longer proper for an order to continue such as retirement or anticipation of retirement;
- Can a court order a party to liquidate assets to pay spousal maintenance?
- Must a payee liquidate her assets to support herself?
- What impact does NDIS have on spousal maintenance payments?
- How should the court treat expenditure of the Husband towards his second family? Is there priority between families? What should the court do when all of the assets of the second family are in the name of the payer’s spouse and there is an acknowledged equitable interest in those assets?
The sources of income for the wife included NDIS payments and the possibility that the Wife could draw down on her superannuation entitlements.
The Court held that the Wife had a need for spousal maintenance as she was unable to support herself adequately from her own income and resources and husband had capacity to support her.
Nonetheless, the Husband asserted that it was not reasonable for spousal maintenance payments to the Wife to be continued because he was transitioning towards retirement and he had his own health issues by the time of the hearing.
The Court held in Bodilly & Hand that notwithstanding that the former husband’s financial position was contracting, that he should continue to pay spousal maintenance to his former wife. The Court ordered that maintenance be paid to the Wife in the sum of $500 per week. There was no date upon which that order would cease.
How do I obtain spousal maintenance? / protect myself from a spousal maintenance claim?
If you are unable to support yourself adequately from your own income and financial resources, we recommend that you seek urgent legal advice about your entitlement to support.
We can make a proposal to the other party regarding the payment of spousal maintenance to you to help you cover your living expenses for the time being, until more final arrangements are made regarding the division of your assets.
Alternatively, if an agreement cannot be reached, you may need to file an application to the Court to obtain spousal maintenance payments from the other party.
If you are worried you may be liable to pay spousal maintenance to your former partner, you should seek legal advice about your spousal maintenance obligations as soon as possible.
The case of Bodilly & Hand illustrates the significance of proper consideration being given by parties when settling financial cases, as to:
- How long spousal maintenance is to be paid for and a realistic termination date being included in the order/agreement;
- Whether a spousal maintenance order is required, so as to avoid the risk of an application to renew/vary the order in the future.
- What protection mechanisms can be put in place to limit/protect against an ongoing financial obligation to pay a former spouse spousal maintenance into the future.
More Information
For more information in relation to similar topics, see our article:
- Spousal Maintenance
- Do I have to support my ex after divorce?
- Going back to work after divorce
- Why you should formalise your property settlement
- When can future inheritances be taken into account
- How do I apply for property and financial orders
- Am I in a de facto relationship
Contact Us
Have you recently separated and are you concerned about the payment/receipt of spousal maintenance? Contact us on 3465 9332 for a reduced rate initial consultation to discuss your rights.
