Being secure in your finances is an essential step towards starting your new life following divorce or separation.
What is spousal maintenance?
During and following separation or divorce, there may be additional financial responsibilities owed to ex-partners. For married couples, this term is called “spousal maintenance” for de facto couples, this can be referred to as “de facto partner maintenance.” Both terms refer to the same obligation for one party to provide financial assistance to the other party following separation in circumstances where one party cannot financially support themselves.
Oftentimes couples do not turn their minds to the application of this particular area of family law and are left underprepared to either meet this obligation or indeed apply for it. Contact the family law experts at KPL Lawyers for some practical legal advice about separation and spousal maintenance today.
Who is entitled to claim? The test under Section 72
Under the Family Law Act, a legal or de facto spouse may claim spousal maintenance after separation. To obtain this, a spouse must first prove that they are unable to support themselves financially and that their other spouse has the financial capacity to fulfil that support.
This right to spousal maintenance for married couples is found under Section 72 of the Family Law Act 1975 (the ‘Act’), which states that:
A party to a marriage is liable to maintain the other party, to the extent that the first‑mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
This section not only sets out this right but also canvases the circumstances whereby one party might be considered unable to support themselves by reason of; having to care for a child under the age of 18, because they have a mental or physical disability, or any other ‘adequate reason’. Adequate reasons may relate to employability, standard of living, language skills, etc.
The right to financial maintenance is similarly guaranteed for de facto couples and is found under Section 90E of the Act. This section deals with the power of the court in maintenance proceedings and states that:
After the breakdown of a de facto relationship, a court may make such orders as it considers proper for the maintenance of one of the parties to the de facto relationship in accordance with this Division.
This section confirms that the court has the same power to make orders for financial maintenance for de facto couples as it does for married couples.
Other factors considered
As mentioned above, the test for determining whether an individual is entitled to claim spousal maintenance is set out under Section 72 of the Family Law Act. Further to this, the courts will consider a range of additional factors found in Section 75(2) of the Act 1975. These factors include but are not strictly limited to the:
- age and state of health of each person;
- relative income, property, and financial resources of each person;
- ability of each party to obtain gainful employment (job skills);
- physical and mental capacity of each person;
- duration of the marriage and whether this has affected earning capacity
- extent to which the maintained party has contributed to the other party’s income, earning capacity, property, and financial resources.
The courts will also consider:
whether either party has the care of a child under the age of 18;
the commitments of each of the parties that are necessary to enable the party to support themselves and a child or another person that the party has a duty to maintain;
the responsibility of either party to support any other person (relatives, parents, adult children with disabilities, etc.).
Consideration will also be given to whether or not an individual is already receiving payments or allowances in the form of governmental assistance (Centrelink benefits, carer’s allowances, pensions, etc.).
The purpose of this financial support is to eliminate any unfair economic effects that separation or divorce may have on an individual. The law recognises that in any given couple or partnership, there may be one spouse that earns a low wage or no wage at all; however, contributes to the relationship in other non-economic ways. Therefore in this regard, the court considers spousal maintenance as an integral part of separation or divorce in the interest of maintaining fairness and equity.
It is important to note that divorce and separation in Australian family law operate under a ‘no-fault’ system. This means that when determinations are made in the family court regarding spousal maintenance, the law does not consider which party was at fault for the relationship’s break-down.
How much is paid for spousal maintenance?
The amount to be paid is entirely discretionary (up to the court to decide). There is no strict formulae or calculator that can be utilised to predict a definite dollar amount. As with many decisions relating to family law, the courts will look at the case as a whole and include as many relevant factors into its decision.
Generally speaking; however, the court will first look at the financial needs of the applicant and the financial capacity of the other party and balance its equation from that starting point. As part of the process, both parties will have to submit evidence relating to day to day expenses, earning capacity, along with disclosure of financial information about liabilities and assets. The court will consider all reasonable evidence (including standard of living) in assessing whether spousal maintenance should be paid and how much.
Types of spousal maintenance
Spousal maintenance can be paid:
As a lump sum payment. Under Section 77(A) and Section 90SH of the Act, a lump sum payment may be granted in situations where one party can prove that they are unable to make periodic weekly payments on a continual basis.
On an interim basis. This is an application for payments to be made immediately after the break-down of a relationship before a final ruling or decision is made. This is a temporary order for financial support, while the separation or divorce is being resolved.
On an urgent basis. Under Section 77 of the Act, and as the name suggests, applications for payments made on an urgent basis are for emergencies where time is of the essence.
How to apply and how are decisions made
Decisions relating to spousal maintenance can be dealt with in three ways:
- Mutual agreement between the parties without the need for consent orders.
- Mutual agreement between the parties via consent orders in the Family Law Court.
- Via an Initiating Application – you will need to include an affidavit in support and a financial statement about your current financial circumstances. You will also need to complete Part N of the Financial Statement, which outlines your weekly expenses on items such as groceries, electricity, and maintenance for the home, etc.
It is essential to note when making an application for orders relating to spousal support, that time is of the essence. Married couples only have a period of 12 months from the official date of divorce to file an application for a financial order. For de facto couples, it’s two years from the date of separation. This timeframe is called a limitation period.
After the limitation period has elapsed, you will not be able to make an application for financial support without first seeking leave from the court. The act of seeking leave means to ask the court for permission to proceed despite being outside the timeframes required for the limitation period.
In this scenario, you will need to ask your lawyer to assist in providing the court with a strong argument as to why:
You were late and not able to finalise your financial settlement within timeframes; and
You would suffer financial hardships if you were unable to proceed with your application.
Approving leave is not always guaranteed, so you must speak to a separation lawyer and seek proper family law advice well before the end of the limitation period. KPL lawyers can advise you on the best practice approach to filing a financial order to protect your assets in a fair and just way.
When does spousal maintenance end?
If a person receiving spousal maintenance remarries they are no longer entitled to spousal support payments. In the situation of a de-facto relationship, the court will assess the financial situation of the new couple and make a determination on whether the spouse receiving the benefit can support themselves financially in the new relationship.
Ultimately the purpose of spousal maintenance is to ensure a party is not unfairly disadvantaged by separation or divorce and is usually only applicable until such a time that the indigent party can financially support themselves. Oftentimes the payment of spousal support is set for a period during which the supported spouse can be retrained or reskilled in order to secure employment and become financially independent.
There are situations, however, in which the obligation to pay spousal maintenance is ordered on a permanent or life-long basis.
Need more information?
Navigating the division of finances and the payment of spousal maintenance during and following a separation can be strenuous and difficult to manoeuvre.
Speak to an expert to find out more about the division of property and assets, child custody, or any other topic relating to family law or divorce today.
KPL Lawyers are the experienced family law lawyers you can trust. Contact us here.