What is spousal maintenance and how does it work?

Spousal maintenance can be ordered by a court or awarded by arbitrator where one person is in a difficult financial position following a separation and requires funds to be able to support themselves.

Section 72 (1) of the Family Law Act provides:

“(1)  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:

  • by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
  • by reason of age or physical or mental incapacity for appropriate gainful employment; or
  • for any other adequate reason;

having regard to any relevant matter referred to in subsection 75(2).”

What does the court consider?

According to the cases decided under section 72, there are two limbs that need to be satisfied to establish an entitlement to spouse maintenance:

1. That the applicant has a need for spouse maintenance

To establish this the applicant needs to set out their reasonable weekly needs to support themselves and not the children. This is not the amount they actually spend, it is what they need (which is likely to be more than what they actually spend). In considering this a court or arbitrator can consider the lifestyle the parties enjoyed prior to separation. The court must disregard any income-tested government pension allowance or benefit.

2. That the respondent has the capacity to pay spouse maintenance

To establish this the applicant needs to identify the respondent’s income and reasonable weekly needs after paying tax, child support and other liabilities. If there is a surplus then the respondent can be ordered to pay all or some of that to the applicant.

In considering whether to make an order for spousal maintenance the court is obliged to consider the factors set out in section 75(2) or section 90SN of the Family Law Act.  There is a long list of considerations including:

  • the age and state of health of each of the parties; and
  • the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
  • whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
  • the responsibilities of either party to support any other person; and
  • where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
  • the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
  • the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
  • the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
  • the need to protect a party who wishes to continue that party’s role as a parent; and
  • if either party is cohabiting with another person–the financial circumstances relating to the cohabitation; and
  • any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account.

How long does spouse maintenance last?

In the vast majority of cases, spouse maintenance does not last indefinitely. In most cases, it will provide support to one party for a period whilst they retrain or until they obtain employment or the children are old enough to go to school to allow them time to re-enter the workforce.

However, there are cases where an indefinite order for spousal maintenance is made. This is most commonly ordered where one party has a health problem which prevents them from obtaining gainful employment.

Commonly orders for spouse maintenance are made on an interim or temporary basis.  The maintenance order is often made on the first court date and will last until final orders are made. These orders are likely to last for several months but could be in place for a few years.

It is less common for orders to be made for spouse maintenance at a final hearing. By the time a matter gets to a final hearing the court often considers the recipient has had sufficient time to re-enter the workforce or the children are old enough to go to school,  allowing the recipient time to do paid work.

On other occasions, the court will consider the recipient is receiving enough assets out of the property settlement that they do not require ongoing spousal maintenance on top of that.

How does spouse maintenance get paid?

A court will usually order spouse maintenance to be paid periodically. But sometimes it can be ordered to be paid as a lump sum. The recipient can ask the Child Support Agency to collect spouse maintenance on their behalf.

Spouse maintenance orders are variable in nature. So if the financial circumstances of either party changes they can apply to the court to have the spouse maintenance order varied or discharged. For example, the recipient may obtain employment and the other party may apply to the court to have the amount of spouse maintenance reduced or discharged.

Sometimes a court will make an order for a lump sum to be paid or an asset to be transferred to one of the parties. The court may specify that a portion of what is to be paid or transferred is to be specified as spouse maintenance.

How often does spouse maintenance arise?

Spouse maintenance is not unusual. It is rare for an application to the court to be only for spouse maintenance often because it is uneconomical to do so. The vast majority of the time an application for spouse maintenance accompanies an application for property settlement.

A person who wishes to seek spouse maintenance or resist a claim for spouse maintenance should seek advice from an experienced family lawyer at an early stage. It may be that agreement can be negotiated or mediated without having to incur the costs of court proceedings or arbitration.

The Show Must Go On…

A Guide to Help Small Business Owners Better Understand & Navigate The Separation Process.

The Show Must Go On...

A Guide to Help Small Business Owners Better Understand & Navigate The Separation Process.
The guide includes:

  • An overview of the impacts a separation can have on your personal life & business.
  • A summary of the complexities small business owners will face when going through a separation.
  • An explanation of the family law process that small business owners will face.
  • Ways small business owners can limit the stress and impact that their separation has on their business.