Spousal Maintenance

The law relating to Spousal Maintenance is generally not well known or understood by the general public and as a result, it is arguably under-utilised. Parties are usually aware that they have a right to a property settlement, and to apply for child support if there are children under the age of 18, but they are often unaware that they may be able to make a spousal maintenance claim against their spouse.

When Is Maintenance Payable?
Section 72 of the Family Law Act 1975 (“the Act”) provides that a party to marriage is liable to pay maintenance to the other party, to the extent that the first mentioned party is reasonably able to do so, if and only if the other party is unable to support himself or herself adequately whether:

  1. By reason of having the care or control of a child of the marriage under the age of 18 years;
  2. By reason of age or physical or mental incapacity for appropriate gainful employment; or
  3. Any other adequate reason.

Often the person entitled to make a claim is the party who has the primary care of the children of the marriage following a separation and, as a result of those caring responsibilities, is unable to earn enough to support him or herself. A party may also make a claim if he or she is unable to support him or herself because he or she is too old to obtain employment or because he or she cannot obtain employment due to health reasons. If there is any other “adequate reason” why a party cannot adequately support him or herself a claim can be made,however such claims can only be made if the other party is reasonably able to pay maintenance.

The Court’s Approach
The following approach is taken by the Court when assessing whether maintenance should be payable and, if so, the quantum of the maintenance:

  1. Calculate the Applicant’s necessary weekly commitments.
  2. Calculate the Applicant’s weekly income (or that of which the Applicant could reasonably be expected to earn, taking into account his or her assets, financial resources and earning capacity).
  3. Deduct number 1 from number 2 less the Applicant’s maintenance requirement.
  4. Calculate the Respondent’s necessary commitments on a weekly basis.
  5. Calculate the Respondent’s weekly income (or that of which he or she could reasonably be expected to earn, taking into account his or her assets, financial resources and earning capacity).
  6. Deduct the figure of number 4 from the figure at number 5. This is the Respondent’s surplus from which a maintenance Order can be paid.

When assessing whether an Order ought to be made and, if so, the type of Order that should be made, the Court must take into account matters set out in Section 75(2) of the Act which are as follows:

  1. the age and state of health of each of the parties; and
  2. 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
  3. whether either party has the care or control of the child of the marriage who has not attained the age of 18 years; and
  4. commitments of each of the parties that are necessary to enable the party to support him or herself and a child or another person that the party has a duty to maintain; and
  5. the responsibilities of either party to support any other person; and
  6. the eligibility of either party for a pension, allowance or benefit under any law or superannuation scheme (excluding any income tested pension, benefit or allowance); and
  7. whether parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
  8. the extent to which payment of maintenance to the party whose maintenance is under consideration when increasing the earning capacity of that party by enabling that party to undertake a course of educational training or to establish himself or herself in a business or otherwise obtain an adequate income; and
  9. the effect of any proposed order on the ability of a creditor of the party to recover the creditor’s debt so far as that effect is relevant; and
  10. the extent of which the parties whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
  11. the duration of the marriage in extent to which it has affected the earning capacity of the other party whose maintenance is under consideration; and
  12. the need to protect a party who wishes to continue that parties’ role as a parent; and
  13. where the party is cohabiting another person, the financial circumstances relating to the cohabitation; and
  14. the terms of any order made or proposed to be made under section 79 in relation to the property of the parties or vested bankruptcy property in relation to a bankrupt party; and
  15. the terms of any order or declaration made or proposed to be made under Part VIII AB; and
  16. any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide or might be liable to provide in the future, for a child of the marriage; and
  17. an effect or circumstances which in the opinion of the court the justice of the case required to be taken into account; and
  18. the terms of any financial agreement binding on the parties of the marriage;
  19. the terms of any Part VIII AB financial agreement binding on the party to the marriage.

Types of Orders
Section 74 of the Act provides that the Court may make such Order as it considers proper for the provision of maintenance. A Court can therefore make a very wide range of Orders pursuant to this provision, for example:

  1. It can make Orders for periodic payments or in certain circumstances it will make Orders for lump sum payments;
  2. A Court can also make an Order that the recipient have the right to occupy a home or have thee of a car;
  3. The Order may be for a fixed period of time (eg to allow a party to re-train or until a party’s youngest child reaches a certain age or until a party receives a property settlement);
  4. A Court may make an ongoing Order (ie without an end date) depending on the circumstances of the case.

How To Protect Yourself From A Claim
Parties to a marriage wishing to protect themselves from a claim can enter into a financial agreement known as a “Pre-Nuptial Agreement” that provides that neither party will make a claim for maintenance from the other party. Care needs to be taken in drafting agreements where a party is unable to support him or herself without an income tested pension, benefit or allowance.

These agreements can be set aside in certain circumstances, including where a change in material circumstances has arisen (being circumstances relating to the care, welfare or development of a child) and, as a result of the change, the child or the applicant who has caring responsibility for the child will suffer hardship.

Maintenance Where Parties Have Been in a De Facto Relationship
Section 90SE of the Act provides that, following a breakdown of a de facto relationship (after 1 March 2009) a Court may make such Orders that it considers proper for the maintenance of one of the parties to the de facto relationship. The maintenance Order can be made in relation to a de facto relationship only where:

  1. The period or total period of a de facto relationship is two years; or
  2. There is a child of the de facto relationship; or
  3. The de facto relationship is registered; or
  4. The party applying for the maintenance makes substantial contributions and a failure to make an Order or declaration would result in serious injustice to the Applicant.

Certain geographical requirements must also be met. A party can only apply for a maintenance Order up to two years after the end of the de facto relationship. In certain circumstances however, a Court may grant leave to a party to apply after that time, for example:

  1. Hardship would be caused to the party or a child of the party if leave were not granted; or
  2. The intended Applicant’s circumstances at the end of the two year period were such that he or she could not support him or herself without an income tested pension, benefit or allowance.

Section 90SF of the Act substantially replicates Section 72 of the Family Law Act 1975 in relation to the parties to a marriage, i.e. a party to a de facto relationship must maintain the other party only to the extent that the first mentioned party is able to do so and only if the second party is unable to support him or herself adequately:

  1. By reason of having the care of the child of a child of the marriage under the age of 18 years;
  2. By reason of age or physical or mental incapacity for appropriate gainful employment; or
  3. Any other adequate reasons.

Section 90SF of the Act sets out matters to be taken into account by a Court when assessing whether and to what extent maintenance should be payable. These matters virtually replicate the matters that a Court must take into account when assessing maintenance in relation to parties to a marriage as set out in Section 75(2) of the Act. The Court must, as in the case of married parties, disregard any entitlement to a means tested benefit in assessing whether and to what extent maintenance is payable.

Parties in domestic relationships who separated before 1 March 2009 can apply for maintenance under the Relationships Act 2008 (Vic). Section 51 of the Relationships Act provides that a Court may make a Maintenance Order if satisfied that the applicant is unable to support him or herself adequately because:

  1. the party’s earning capacity has been adversely affected by the circumstances of the domestic relationship; or
  2. of any other reason arising in whole or in part from the circumstances of the domestic relationship.

The court must take into account a number of different factors when assessing whether a maintenance Order should be made and the nature of that Order. There are unlikely to be many more Applications under the Relationships Act because this Act applies to relationships that ended before 1 March 2009 and parties can only make applications within 2 years of the end of the relationship (without seeking leave of the Court).

Parties to a marriage, de facto relationship or domestic relationship that has broken down should be aware that they may be able to make a claim for maintenance against the other party. Parties considering getting married or entering into a de facto relationship may wish to enter into a financial agreement providing that neither party will claim maintenance from the other.

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