Spousal Maintenance

When your relationship ends and you part ways with your partner, one of the more immediate concerns you may have is how you are going to survive financially. While it is becoming increasingly common for both people in a relationship to be working, it is not unusual for one party to be either working part-time on a lower income or working at home raising the children and running the household. The Family Law Act recognises there may be a need for one of the parties to a relationship to provide financial support to the other party.

There are several pathways in the Federal Circuit and Family Court of Australia (“the Court”) for you to pursue spousal maintenance. Which pathway you follow will depend on the particular circumstances of your case.

If you find yourself in a situation where you have an immediate need for financial support, the Court can hear your matter urgently. In an urgent application, financial assistance is usually only for a short period of time and requires you to demonstrate an immediate need. Once the Court has determined the urgent application, it will then look to set a hearing date to determine your need for ongoing financial support and your ex-partner’s capacity to pay. Thus, an urgent spousal award is considered a stop-gap measure pending a further hearing.

Interim Support

The more common avenue for applications for spousal maintenance is through an interim application for either periodic payments and/or the release of a lump sum of money. The Court will firstly look at whether you can adequately support yourself.

When looking at whether or not you can adequately support yourself, the Court considers a variety of factors including

• whether you have the care of children;
• any medical or health needs which impact your capacity to work;
• your income including any child support you receive;
• how you’ve helped you partner in their career;
• whether the circumstances of the relationship impacted on your earning capacity,
  and your lifestyle prior to separation.

While it is not a given that the Court will ‘keep you in the manner to which you have become accustomed’ the Court can look at your pre-separation lifestyle and order spousal maintenance at a level it considers reasonable. The Court will usually not expect you to deplete your assets when spousal maintenance is an option.

Once the initial threshold question has been determined in your favour, the Court will then examine your expenses to determine how much spousal maintenance you need. Part of this process is to provide the Court with a detailed account of your expenses and any income you are receiving. The Court will not take into account any benefits you are receiving from Centrelink.

The amount of spousal maintenance to be paid to you will be reliant on your ex-partner’s capacity to pay. The Court will examine their capacity to provide financial support to you and will look at their income and financial resources and determine what amount of spousal maintenance is to be paid.

The paying party will have expenses of their own, and the Court will closely examine what they are spending money on in order to come to a reasonable figure (not all expenses are considered reasonable – for example, a personal trainer five days a week might not be considered necessary if one can instead go for a jog).

So, in a nutshell, the Court examines your need for financial support and your ex-partner’s capacity to pay.

On-Going Support

The process for getting spousal maintenance on a final basis is much the same as at an interim level, however, the Court will take into account the terms of your final property settlement. It is unusual for spousal maintenance to be awarded for an extended period. There is an overriding principle of finality in family law and the obligation to support an ex-partner indefinitely would be unlikely to be considered reasonable by the Court.

One of the important elements of spousal maintenance is where one of the parties needs to retrain to enter gainful employment. If the context of your relationship has meant your employment prospects have been affected (usually when you have been the primary caregiver to the children), spousal maintenance can be a useful means for ensuring you are financially supported in order to gain skills or train to re-enter to the workforce.

Let’s look at a ‘typical’ spousal maintenance scenario.

Karla and Carlos have been married for 12 years and they have three children ranging from 4 years of age to 10 years of age. Carlos started his career as a plumber and over the years he established a plumbing company servicing the greater Sydney region. He currently employs ten staff and pays himself around $350,000 per annum while also receiving quite a few perks from his business – his phone and car are paid for by the business and he travels around Australia and overseas attending conferences and trade fairs with the company meeting all costs.

When they started the relationship Karla initially did the books for the company and was enrolled in an accounting degree but, once the children were born, she stayed home to care for the family. Karla had always wanted to become an accountant and has done several short courses but was unable to gain any traction in her career because of her homemaking responsibilities. Carlos was very good at organising the finances but, as the years went on, he stopped telling Karla how much money they had or indeed where the money was. During the relationship, Karla didn’t mind Carlos controlling the finances because everything seemed to be going along swimmingly.

After a tumultuous couple of months, Karla and Carlos decided to separate and Carlos moved out of the family home. Carlos then blocked Karla’s access to the joint account where his pay was deposited telling her that, because he was now paying child support, Karla had to fend for herself and, if she needed money to live on, she should use the $100,000 she had in shares.

Karla went to see a lawyer. An application was made for the urgent spousal maintenance – Karla told the Court about her immediate needs and Karla received the sum of $1,000 per week in spousal maintenance and the release of $10,000 to pay outstanding bills. The Court set the matter down for an interim hearing to determine Karla’s interim application for spousal maintenance.

Several months later at the interim hearing, Karla told the Court she had been home raising the children for 10 years and wanted to continue in her role as their caregiver especially as the youngest was still not of school age. Karla also said the amount of spousal maintenance she needed was significant because she and the children were used to being able to go out for meals regularly and to go on holidays several times a year. Carlos argued that Karla should just go back to work and support herself and noted that she was receiving single parent benefits from Centrelink. Karla’s response to Carlos telling her to “get a job” was to tell the Court she planned to complete her training in accountancy, but that she required financial assistance from Carlos to do so.

The Court assessed Karla’s needs and Carlos’s capacity to financially meet those needs. The Court did not take into account Karla’s Centrelink payments and awarded her $1,500 per week in spousal maintenance and set the matter down for a final hearing in 12 months.

By the time 12 months came around, Karla was feeling clear about her career goals and had recommenced her accountancy degree, with a further two years required to complete. The children were living primarily with Karla but were also spending regular time with Carlos. Apart from the family home, the family had several hundreds of thousands of dollars worth of shares and Carlos’s superannuation was much higher than Karla’s. In addition to property distribution, Karla applied for spousal maintenance for a period of 2 ½ years to enable her to complete retraining as an accountant and to set up an accountancy firm that would provide her with a living but also offer flexible work hours to accommodate the children’s needs. Carlos argued he couldn’t pay ongoing spousal because his plumbing business could go down the drain at any moment.

Was Karla successful in her spousal maintenance claim?

Well, given this is a fictitious scenario, we don’t really know! But our opinion, built up over many years of experience in such matters, is that Karla has a strong case indeed.

If you would like to discuss your own situation with us, please get in touch today.

NB. This example is of a heterosexual married couple. The same legal principles apply in heterosexual de facto relationships and for same-sex couples who are married or in a de facto relationship. The scenario is mindfully gendered because, as the Courts have recognised, spousal maintenance addresses the economic consequences of a sexual division of labour. Separation and its economic effects are playing a role in the feminisation of poverty, as in most relationships, the woman remains the economically disadvantaged partner.