Variation of Spousal Maintenance
- AuthorMarcus Crawley
During the course of a divorce, a tricky task is to unpick the family finances and then agree who should take what from the matrimonial pot. If agreement cannot be reached between the divorcing couple or in mediation, an application will need to be made to the Court for a financial remedy order. An assessment of the couple's income and income needs will be considered as well as calculating what falls into the matrimonial pot in terms of ISAs, savings, property, pensions, business ownership etc.
With regard income, an arrangement can be made whereby one party pays to the other a series of payments known as periodical payments (commonly known as maintenance orders), for as long as may be specified in the order.
In determining whether or not a periodical payments order is appropriate, regard must be had to the checklist set out in Section 25 of the Matrimonial Causes Act 1973. The factors to be considered include:
1. the income and earning capacity of each party, both now and in the foreseeable future. It is also important to consider what reasonable steps each party could be expected to take to increase their earning capacity;
2. the financial needs, obligations and responsibilities that each of the parties has or is likely to have in the foreseeable future, together with the standard of living enjoyed before the breakdown of the relationship;
3. the age of each party and the duration of the relationship;
4. any physical or mental disability of either of the parties;
5. whether it is possible or desirable to sever the financial ties between the parties, i.e. provide for a clean break.
If it is determined that periodical payments are appropriate and necessary, the next consideration will be how much the payments should be and for how long they are to continue.
When looking at the amount of any maintenance, the Court has determined how much money the financially weaker party needs to live each month. The Court will then examine to what extent these needs can be met by their own income, be it from employment, benefits or any other source of income. They will then look at the ability of the financially stronger party to pay for any shortfall in respect of that need. When all of these factors have been weighed up, they will determine what level of maintenance should be awarded.
Whilst determining the quantum of the payments is 'an art and not a science' and all sorts of considerations must be taken into account, there are a limited number of options with regard the length of time that maintenance is to continue - maintenance can continue for a set period of time with the option to extend the term (extendable term order); for a set period of time with no option to extend the term (non-extendable term order); or on a joint lives basis (i.e. until one of the parties dies or the recipient of the maintenance re-marries).
In recent years, there has been a move away from Courts making orders on the basis of joint lives. This is because maintenance has increasingly been seen as a stepping stone to independence that should be used as a way of rehabilitating a party who, for example, may have taken a step back from work during the course of the marriage to look after the children of the family.
Already this year, we have seen two cases go to the Court of Appeal that have challenged this stance. In the case of Mickovski v Mickovski, Mr Mickovski applied to the Court for his term maintenance order to be brought to an end four years early. His ex-wife, Dr Liddell, had resumed full time work as a lecturer and he argued that she should live on the income she received from her employment. The Court found that whilst Dr Liddell earned a salary of £53,000, she was still in need of the additional maintenance from Mr Mickovski. The Court capitalised Dr Liddell's maintenance and ordered that Mr Mickovski pay her a lump sum of £34,000, instead of relying on him to carry on paying her each month.
This case suggests that the Court of Appeal's approach is to take a generous stance in relation to need. It is certainly a step away from the thinking that maintenance is purely about rehabilitation back into work.
The second, recent case to deal with this issue is Mills v Mills. In that case, Mrs Mills had been awarded a joint lives maintenance order for £1,100 per month. She had been awarded the majority of the liquid capital assets, whereas Mr Mills retained his business. Unfortunately, in the years following the conclusion of the financial remedy proceedings, Mrs Mills made a number of poor property investment choices and some 15 years after the divorce was finalised, all of the capital she had been awarded was spent. She therefore made an application to the Court for her maintenance to be increased. Mr Mills argued that he should not be made to pay for his ex-wife's financial mismanagement and that she could increase her working days from two days per week in order to assist with her financial situation .The Court of Appeal rejected Mr Mills' position and ordered that the payments were to be increased to £1,441 per month.
The Court of Appeal stated that an increase in Mrs Mills' maintenance was required in order to meet her basic needs. As with Mickovski, this is a departure from the stance that maintenance should be rehabilitative in nature and, once again, reiterates the importance of the receiving parties' needs. What impact these two cases will have on the willingness of Courts to grant periodical payment orders of a longer term or on a joint lives basis remains to be seen.
If you require assistance in relation to the financial arrangements between you and your spouse following the breakdown of your marriage, please feel free to contact a member of our Family Law Department on 01242 574244 and we will be happy to meet you and discuss your situation.