Fam­i­ly Law | Rela­tion­ship break­down: how do we sort out maintenance?

Work­ing out how the every­day expens­es will be met is one of the biggest chal­lenges for peo­ple when they sep­a­rate from a rela­tion­ship. Wor­ry­ing about how to man­age short-term finances can result in par­ties try­ing to delay sep­a­ra­tion because one or both par­ties can­not imag­ine how they will be able to afford to main­tain sep­a­rate households. 

Your Fam­i­ly Lawyer can help you to nav­i­gate these issues.

What is spouse maintenance?

Spouse main­te­nance or de fac­to part­ner main­te­nance is a pay­ment or series or pay­ments made by one par­ty to the oth­er to assist them in meet­ing their expens­es. A par­ty (includ­ing a same-sex part­ner) can seek main­te­nance how­ev­er it is not auto­mat­ic right and will only be paid if there is an agree­ment with the oth­er par­ty, or a Court Order. These days, main­te­nance is gen­er­al­ly only paid for a spec­i­fied peri­od, for exam­ple, until the youngest of the par­ties’ chil­dren starts school.

Does our agree­ment have to be in writing?

It is a good idea to have a main­te­nance agree­ment in writ­ing to avoid dis­putes lat­er on. At the very least, pay­ments should be made to a bank account, not in cash, and the bank­ing trans­ac­tions should be iden­ti­fied as main­te­nance. If the par­ties can reach agree­ment on all prop­er­ty and finan­cial issues then a Fam­i­ly Lawyer can advise on how main­te­nance should be includ­ed in the set­tle­ment documents.

How does the Court han­dle spouse maintenance?

When the Fam­i­ly Court is asked to deter­mine whether a par­ty should receive main­te­nance, it assess­es two things: the appli­can­t’s abil­i­ty to ade­quate­ly sup­port them­selves (“need”) and the respondent’s abil­i­ty to pay (‘capac­i­ty’). This assess­ment is based on doc­u­ments that are pro­vid­ed to the Court. There­fore in order to pre­pare, each par­ty needs to pro­vide to their own lawyer detailed infor­ma­tion about their income, expens­es, assets and liabilities.

What infor­ma­tion do I need to pro­vide to my lawyer?

• Your lat­est income tax return and notice of assessment;
• Your employ­ment con­tract or employ­er’s let­ter of offer set­ting out your salary, ben­e­fits and bonus­es and stat­ing when these will be paid;
• Payslips or oth­er doc­u­ments show­ing your cur­rent income (if you have more than one job you will need these details for each);
• A sum­ma­ry of your work his­to­ry, such as a CV or resume;
• Invoic­es and pay­ment receipts for expens­es such as rent, food, elec­tric­i­ty, gas, fares, petrol, insur­ances, enter­tain­ment and the like; 
• A list of your cur­rent bank accounts;
• Bank account state­ments and cred­it card state­ments (your lawyer will let you know the peri­od to be covered);
• Your lat­est super­an­nu­a­tion mem­ber’s state­ment; and
• If you are not employed, copies of your recent job appli­ca­tions, a state­ment about your employ­ment prospects and if appro­pri­ate, a state­ment about fur­ther train­ing or study includ­ing costs and time frames.

Your lawyer will advise whether fur­ther doc­u­ments will be required.

Oth­er things to consider:

• Need is not nec­es­sar­i­ly based on the expens­es a par­ty cur­rent­ly incurs. A par­ty’s spend­ing pat­terns may have changed because of the sep­a­ra­tion and it is open to the Court to have regard to the typ­i­cal expens­es they would have incurred pri­or to sep­a­ra­tion. Con­verse­ly, a par­ty can­not claim expens­es for which need or a pre­vi­ous pat­tern of expen­di­ture can­not be established.
• A par­ty is usu­al­ly not required to sell assets in order to sup­port him­self or her­self. How­ev­er, this is a mat­ter of bal­ance and rea­son­able­ness. For exam­ple, if a par­ty has sub­stan­tial funds in a bank account but is claim­ing fur­ther sums for main­te­nance, the Court may not nec­es­sar­i­ly make an order for main­te­nance because that par­ty can main­tain him­self or herself.
• When deter­min­ing need, it is impor­tant to note that spouse main­te­nance is not the same as child sup­port. The break­down of expens­es for a par­ty should sep­a­rate­ly iden­ti­fy expens­es for​chil­dren. While this may some­times be an arti­fi­cial esti­mate (for instance, how much of an elec­tric­i­ty expense has been incurred due to the chil­dren) it is impor­tant to make these dis­tinc­tions clear.
• Capac­i­ty is not nec­es­sar­i­ly assessed on a par­ty’s cur­rent income. If a par­ty is prac­ti­cal­ly able to earn an income but delib­er­ate­ly choos­es to be under­em­ployed or unem­ployed so that they will not be ordered to pay main­te­nance, the Court has the dis­cre­tion to deter­mine that the par­ty has capacity.
• Gov­ern­ment ben­e­fits are dis­re­gard­ed as​income for the pur­pos­es of spouse maintenance.
• Just because a par­ty has the capac­i­ty to pay does not mean he or she has to pay his or her high­er income to the oth­er par­ty. If one par­ty can­not estab­lish need, it can be irrel­e­vant how much capac­i­ty the oth­er par­ty has.

Why is this important?

Due to the size of the cur­rent Court lists, prop­er­ty and finan­cial cas­es are tak­ing longer to be heard by a Judge and it is there­fore not uncom­mon for the process to take more than 18 months to final hear­ing. Inter­im main­te­nance is some­times ordered by the Court to be paid for a peri­od of time between sep­a­ra­tion and the final­is­ing of the par­ties’ finan­cial mat­ters. Main­te­nance can also be ordered to be paid after final set­tle­ment until a spec­i­fied event occurs, for exam­ple, the sale of the for­mer mat­ri­mo­ni­al home.

At Swaab, we urge you to seek advice about your main­te­nance rights and oblig­a­tions as ear­ly as pos­si­ble. This is very impor­tant, espe­cial­ly if you are the par­ty seek­ing spousal main­te­nance, as delays in the final res­o­lu­tion of a case may have a sig­nif­i­cant impact on your finan­cial position.