Facts about sposual maintenance
when a marital or de facto relationship ends, sometimes one partner faces a serious economic disadvantage. a spouse or a partner who stayed home to raise children made it possible for the other spouse to work, to earn promotions, and to establish a career.
The parent who stayed at home sacrificed those same opportunities in order to act as a homemaker or childcare provider.
The obligation to support a partner in a marriage or in a de facto relationship does not necessarily end when the parties separate. An award of spouse maintenance recognizes the unfairness of leaving a former husband or wife with little or no income after that person spent years providing services in the home for no compensation. A divorce or separation should assure that an ex-wife or ex-husband is not deprived of a decent standard of living while the other partner in the relationship enjoys the healthy income that the homemaker’s efforts made possible.
What is Spouse Maintenance?
Also known as alimony or spousal support, maintenance is financial support that one member of a dissolved relationship provides to the other. It can be paid as a lump sum or as periodic payments that continue for a fixed period or until the person receiving the payments dies or remarries. It can also be a factor that the court considers in a property settlement by awarding a former spouse a larger share of property in lieu of ordering maintenance payments.
How is Spouse Maintenance Determined?
When a relationship ends, the partners to the relationship can use mediation and negotiation to decide whether spouse maintenance will be paid and, if so, the form and amount of that payment. If negotiation fails to produce an agreement, either party can apply to the court for an award of maintenance. That application must usually be made within 12 months after a final divorce is granted. In a de facto relationship, the application must be made within 2 years after the relationship breaks down.
A court will consider the following factors when it decides whether to grant the application:
- The applicant’s financial needs.
- The other party’s ability to pay, including financial obligations.
- The age and health of both parties.
- Whether the parties have children.
- Where the children are living, if they are minors.
- The applicant’s education, work experience, and ability to find employment.
- The standard of living the parties enjoyed when they were living together.
- The contributions the applicant made to the relationship.
De Facto Spousal Maintenance
Unmarried couples who separate after a relationship breaks down may be eligible to seek an award of maintenance. The law applies to couples whether they are in a same-sex or opposite-sex relationship and to partners in a relationship who are married to someone else.
In most places, the Family Law Courts can order one ex-partner to support the other if they lived together on a “genuine domestic basis” (as if they were married) for at least two years. Family Law Courts have that power in New South Wales, Victoria, Queensland, Tasmania, the Australian Capital Territory, the Northern Territory, Norfolk Island, Christmas Island, the Cocos (Keeling) Islands, and South Australia. The Family Court of Western Australia has similar authority.
Spousal maintenance refers to maintenance which is payable by one partner
A partner to a marriage is liable to maintain the other partner to the extent that they can reasonably afford to do so and if their spouse is unable to support him or herself adequately because:
- he/she has the care and control of a child of the marriage who is under 18 years of age;
- of their age or their physical or mental incapacity for appropriate or gainful employment; or
- any other reason, and having regard to the factors identified in section 75(2) of Family Law Act.
Parties may agree to Spousal Maintenance by entering into Consent Orders which may be made in the Local Court, Family Court or Federal Circuit Court. If no agreement can be reached, a party may apply to any of these Courts for a Spousal Maintenance Order. The spouse applying for spousal maintenance is the applicant spouse.
Note: The conditions under which Spousal Maintenance is payable to a former partner of a de facto relationship differ from the above. Refer to 'How the Courts determine Spousal Maintenance for separated de facto couples' information sheet.
Spousal Maintenance can be sought at any time prior to a divorce. This includes where the parties have not separated but one spouse is failing to properly support the other. More commonly, Applications are made for Spousal Maintenance after separation.
Applications for Spousal Maintenance must be made within twelve months of the divorce orders coming into effect. After twelve months from the date of the divorce, Spousal Maintenance proceedings may only be commenced with special leave of the Court.
Interim Spousal Maintenance Orders
Interim spousal maintenance orders are temporary orders issued by the court for the financial support of a party awaiting final orders. The court can make interim orders during the pendency of a spousal maintenance application. It is a temporary remedy until the court will issue final orders.
Final Spousal Maintenance Orders
Spousal maintenance is usually considered as part of an overall settlement
A property settlement must be determined first before a final maintenance. This is because sometimes the property settlement would render a need for maintenance unnecessary or impracticable. There are instances when after the division of the properties a party receives substantial property such that maintenance is no longer needed. It can also happen that after the property settlement the payer is no longer able to afford payment of maintenance.
The case of Clauson and Clauson (1995) FLC 92-595 emphasizes that a property application must be determined first. This is because the court will then have to take into consideration the parties’ financial circumstances in accordance with the requirement under Section 74 of the Family Law Act 1975.
The Full Family Court in Mitchell and Mitchell (1995) FLC 96-201 utilized social science research in considering spouse maintenance. The Court took note of research that shows that “mothers who have the primary care of children drop out of the workforce and suffer financially – a situation which is exacerbated when a marriage breaks down.”
Lump sum payment of a specified amount on a one-off basis: The lump sum amount may be a specified monetary amount or through the transfer of property.
Urgent maintenance orders are meant for only weeks at a time whereas interim orders are intended for longer periods. Urgent orders are usually sought by parties who have been abandoned without any means by which they can support themselves. Afterwards the party can apply for interim and final orders.
Spousal Maintenance will automatically cease on the following events:
- death of the recipient spouse.
- death of the paying spouse .
- the remarriage of the recipient spouse, unless a Court orders otherwise (due to special circumstances).
- There is a duty on the recipient spouse to inform the other on their re-marriage. Payments made after re-marriage can be recovered from the recipient spouse.
- A Court can make an Order discharging, reducing or increasing an amount of Spousal Maintenance if it is satisfied:-
- there has been a change of circumstances of either party since the Order was made for example the cost of living has changed to justify varying the Order. An Order can only be varied on this basis once every twelve months.
- where the original Order was made by consent, it was not proper or adequate for the support of the recipient spouse. In so deciding, the Court shall take into account any prior payments or transfers by way of Spousal Maintenance or property settlement.
- material facts were withheld from the Court or false evidence was given.
Spousal Maintenance Bankrupcy
The Family Law Act 1975 (FLA) has ensured that a spouse can still obtain support from a spouse who is bankrupt. The applicable law with respect to bankruptcy is the Bankruptcy Act 1996.
The passage of the Bankruptcy and Family Law Legislation Amendment Act 2005 (Cth) has provided protection to non-bankrupt spouses by inserting in the Bankruptcy Act 1996 Section 59A. Section 59A provides that Sections 58 and 59 of the Bankruptcy Act 1996 are subject to Pt VIII of the FLA. This means that the income of the bankrupt spouse is not vested in the trustee such that a non-bankrupt spouse can still seek maintenance from the bankrupt spouse.
Section 58 of the Bankruptcy Act 1996 provides that once a person becomes bankrupt, his divisible property shall be vested in the trustee. However, there are some exemptions including his superannuation and, his income.
The fact that a non-bankrupt spouse can apply for maintenance from the bankrupt spouse does not prevent the trustee from participating in the family law proceedings. On the contrary, Section 79(11) mandates that the court must join the trustee in the property proceedings if it is found that the interests of the bankrupt’s creditors will be affected by the court’s order.
The recipient spouse does not pay tax on their Spousal Maintenance payments (unlike social security benefits or pensions which are taxable). Payments of Spousal Maintenance by a paying spouse are not tax deductible. Some paying spouses may, therefore, prefer to meet their Spousal Maintenance liability obligations by lump sum transfer of assets rather than by periodic payments from net income.
Disclaimer : This article provides basic information only and is not a substitute for a professional or legal advice. It is prudent to obtain legal advice from a family lawyer.