Case law: Court gives guidance on maintenance payable to ex-spouses, including when they fail to get a job
Thursday 13th August 2015
Ex-spouses paying or receiving maintenance should consider whether the maintenance could be ended or varied following comments in a recent ruling. They should also consider whether they can apply to reduce maintenance on the basis that their ex-spouse should go and find a job.
The media recently gave significant coverage to a legal case in which a husband applied to reduce maintenance payable to his ex-wife. The media took an interest because the court told the ex-wife she should go out and get a job rather than rely on her ex-husband for financial support. The judge said: “There is a general expectation… that once a child is in year two, most mothers can consider part time work consistent with their obligation to their children”.
A subsequent legal decision has provided further guidance on the factors that courts should take into account when deciding whether to award (or continue to award) maintenance to an ex-spouse, how much it should award and for how long. The guidance also covers the vitally important issue of whether and when ex-spouses receiving maintenance should take steps to become financially independent – which often means getting a job. They include the following:
maintenance should only be awarded on the basis of need
it should not usually be awarded for the joint lives of both husband and wife, but for a defined term – perhaps with an option to apply for an extension when the terms expires
arrangements should encourage the payee spouse’s transition to independence
In this case, a wife claimed maintenance of £60,000 per annum for 27 years, with a right to apply for an extension at the end. She also claimed 30% of her husband’s net bonus each year, capped at £70,000 per annum.
The husband offered payments of £24,000 for 12 months, decreasing to £18,000 per annum for the next four years, then £12,000 per annum for a further six years, with no extension.
The Court awarded maintenance of £30,000 per annum for an extendable term, to expire after 11 years when the couple’s youngest child reached 18. It also awarded her 20% of the net bonus, capped at £26,500 per annum. Maintenance was to meet an ex-spouse’s needs, not to allow them to enjoy the same standard of living as when they were married. The Court ruled that the amount it had awarded was enough to meet the wife’s needs, and was a fair division of her husband’s income, net of school fees and the maintenance itself.
The Court also gave the following guidance:
Maintenance should aim to meet only those needs of an ex-spouse that arise because of choices made during the marriage - such as how long the couple were married and whether they had children. If an ex-spouse’s needs are not the result of such choices, maintenance should only be awarded to the extent it reduces significant hardship.
Awards should be limited in time, to encourage an ex-spouse’s transition from dependence to independence as soon as just and reasonable, unless this would cause ‘undue’ hardship (it had to be undue hardship – mere hardship is acceptable)
If the circumstances mean the court could either award maintenance for an expendable term or make a ‘joint lives’ award, it should favour the former.
An ex-spouse’s standard of living can be relevant when assessing levels of maintenance but is merely one factor, to be considered against the overall aim of encouraging a transition to independence.
Maintenance should not amount to an unfair proportion of the paying spouse’s available income.
If the paying spouse’s income includes a discretionary element, the maintenance can be structured accordingly, with strict needs funded from the basic salary, and discretionary needs funded from the discretionary element (subject to a cap).
If an ex-spouse applies to extend their maintenance at the end of the original term the court should investigate why they have not become independent within that period.
When deciding whether a maintenance award should be extendable or not, the court should usually favour the financially weaker ex-spouse.
Ex-spouses paying or receiving maintenance should consider whether the maintenance could be ended or varied following a recent ruling, and whether an ex-spouse receiving maintenance needs to go out and get a job.
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