Relationship break downs — how do you sort out maintenance?
So, we have a relationship break down – how do we sort the maintenance?
It is one of the most challenging aspects of family law – who gets what and who owes whom — when a relationship breaks down and maintenance is being negotiated.
Consider this article as an overview and checklist to help you navigate your way to a solution.
- What is Spousal Maintenance / De Facto Partner Maintenance?
Spousal maintenance or de facto partner maintenance refers to a payment made by one party to the other to assist them to meet their expenses. A spouse and a de facto partner (including a same sex partner) may seek maintenance; however parties do not have an automatic right to maintenance and can only be paid with the agreement of the other party or by obtaining Court orders providing for same.
- What is required? It’s all about the documents:
When determining if a party should receive maintenance, the Court assesses his or her ability to adequately support themselves (‘need’) and the other party’s ability to pay (‘capacity’). As this is done on the basis of documents provided to Court, it is important for both parties to provide their lawyers with detailed information regarding their income, expenses, assets and liabilities.
Your information should include:
- Employment contract or letter of offer from the employer, including documents showing what benefits and bonuses are paid;
- Pay slips or other documents showing your current income/s;
- Information about your work history (such as a resume);
- Bank statements and credit card statements;
- If you are not in the workforce, the likelihood of you becoming employed (such as job applications or rejection letters) and / or the costs and time of retraining;
- Invoices and receipts for the payment of expenses such as rent, food, electricity, gas, petrol, insurances, entertainment, and so on.
Other things to consider:
- Need is not necessarily based on the expenses a party currently incurs. For instance, if a party’s spending patterns have changed because of the separation, it is not unreasonable to take into account expenses they would typically 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 or deplete existing assets in order to support himself or herself. However, this is a matter of balance and reasonableness.For example, if it can be shown that 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 and the amounts in the bank account expended can be taken into account at the end of the day.
- When determining need, it is important to note that spousal maintenance is not the same as child support. The breakdown of expenses for a party should separately identify the expenses of the child/children. While this may sometimes be an artificial estimate (for instance, how much of an electricity expense has been incurred due to the child/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.
- The receipt of any government benefits is disregarded as ‘income’ for the purposes of spousal maintenance.
- Just because one party has the capacity to pay does not mean he or she has to pay his or her surplus income to the other party. If the Court finds that one party cannot establish need, it is irrelevant how much capacity the other party might have in the determination of a maintenance claim as the other party will not be required to pay maintenance.
- Why is this important?
Interim maintenance is sometimes ordered by the Court to be paid for a period of time between separation and the finalisation of the parties’ financial matters. Maintenance can also be paid after final settlement until a certain terminating event occurs.
Due to the size of the current Court lists, cases are taking longer to be heard by a Judge. It is therefore not uncommon for it to take upwards of 18 or even 24 months before parties have a defended final hearing of their case.
At Swaab, we urge you to seek advice as to your rights and obligations as soon as possible. This is very important, especially if you are the party seeking spousal maintenance. Delays in the final resolution of a case may have a significant impact on your financial position.
We can advise you so that you can balance what you are seeking with your projected legal costs and are able to advise you as to what is appropriate in all the circumstances.