The limitations of spousal maintenance

Spousal periodical payments orders, more commonly referred to as spousal maintenance, are one of the options the court has at its disposal in order to adjust the parties’ financial resources upon divorce. Such an order involves a party paying their former spouse a sum of money on a regular basis, typically for a defined period of time.

In times gone by, the court’s preference had been to make generous awards of spousal maintenance, often for the parties’ joint lives so that payments would continue until their death. However, there is an ever growing body of case law that is moving away this approach.

Limited by term

The court has a duty to consider a clean break, where the parties’ financial obligations towards one another end upon the finalisation of the divorce. Clearly maintenance awards prevent a clean break. Where the court feels spousal maintenance is appropriate, it therefore has a strong preference for limiting such maintenance for a set term, rather than indefinitely for their joint lives.

How long this period may be depends on a variety of factors. These include the parties’ respective earning capacities, the length of the marriage and the need to care for children. Ultimately however, the length of the term is a question of how long it will take to enable the party receiving the maintenance to adjust towards financial independence.

In some situations, the appropriate length of term can be difficult to gauge at the outset. The court has discretion to order both extendable and non-extendable terms, though there still needs to be an exceptional justification for the initial term to be increased at a later date.

Limited by needs

In dealing with capital assets, such as property, the court is inclined to consider both the principles of needs and sharing when deciding what is a fair outcome. This is not the case for maintenance. The amount of spousal maintenance paid is made by reference to needs in almost all cases.

This means that where one party has a substantial income, it is not simply a case of dividing income equally. The appropriate sum will be limited to that which the receiving party requires to meet their financial needs alone. Furthermore, what may be appropriate initially may then reduce over time as the receiving party is expected to transition towards financial independence, such as by increasing their own earning capacity.

There is no exact definition of financial needs. Consequently, there is scope for it to be generously interpreted by reference to the receiving party’s expenditure and having considered the parties’ standard of living during the marriage.

Capping the bonus

Some individuals receive a substantial amount of their income via a bonus in addition to their regular salary. The court can order that bonuses received post separation can still be paid as maintenance on a needs basis. However, there will be a cap on the percentage of bonus payable as maintenance. For example, in SS v NS [2014] maintenance was awarded at £30,000 per annum from salary plus 20% from the bonus, capped at £26,500 per annum.

The above is just a snap shot of the state of the law in this area, though it is evident that the court is adopting a less sympathetic approach towards those seeking spousal maintenance.

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