Entitlement to spousal maintenance is a question frequently raised by clients when discussing financial matters arising from a divorce or civil partnership dissolution.
Spousal maintenance is maintenance paid by a husband or wife to their ex upon divorce/dissolution, and is also known as spousal periodical payments. It is entirely separate from child maintenance and there is no automatic entitlement to receive it.
Usually paid on a monthly basis, spousal maintenance can be set for a limited period of time (a term of months or years) or until one of the parties dies (known as a joint lives order).
In some cases, it is possible to have a nominal order where no substantive amount is paid but there is no clean break so in essence the door is left open for claims to be made in the future. Spousal maintenance ceases if the recipient remarries or if either party dies.
The purpose of spousal maintenance is to meet the ongoing financial needs of the financially weaker party. The court must consider whether it is possible to achieve a clean break or whether the needs of one party require maintenance to be paid to ‘top-up’ their income from other sources to meet his or her needs.
It is a misconception that separating spouses should have parity of income upon divorce. In fact, spousal maintenance is generally only paid where the lower earning spouse cannot support themselves financially without it.
The court will always consider making a clean break order where possible to do so. In some situations maintenance payments can be capitalised which means the recipient is paid by way of a lump sum order instead of receiving ongoing monthly payments. When considering this option it is essential to consider carefully any remarriage prospects of the recipient first.
Where a higher earning spouse receives a base salary and a discretionary bonus, the approach of the court tends to be that the receiving spouse’s needs are met from the base salary and that additional discretionary items are met from the bonus on a capped percentage basis determined on a case-by-case basis.
It is possible to protect payments in the event of the paying spouse’s death or critical illness. Consideration should be given to insuring the payments, for example by taking out a life insurance policy on the paying spouse’s life, to make sure the receiving spouse continues to receive an income in the event of critical illness or death.
The issue of spousal maintenance is complex and emotive and is often the stumbling block to resolving financial disputes upon divorce or dissolution. It is, therefore, important to seek early legal advice on this issue from Beswicks.