If you have an existing maintenance order now is a good time to check the terms.
Inflation is expected to continue to rise this year and with many families’ finances under significant strain, now is a good time for those with existing maintenance orders to check the terms of their financial agreement. If you are the payer you may want to reduce your payments to your ex-spouse, and if you are the receiver, you may want your payments to be increased.
What is a spousal maintenance order?
Spousal maintenance orders made on divorce require a party to pay ongoing regular sums (usually on a monthly basis) to their ex-spouse.
Will spousal maintenance payments go up as a result of the rising inflation rates?
Yes – if your financial order specifies that maintenance payments are “index-linked” and to be reviewed on a yearly basis. But each order is different. Many provide for the payment to increase in line with the Consumer Price Index (CPI) or the Retail Price Index (RPI).
So what should I do if I receive maintenance?
You should check your financial order very carefully e.g., are maintenance payments “index-linked”? If they are you will need to carry out a calculation to assess what the new payment should be.
Try to provide your ex-spouse with the new calculation prior to the payment date. If you both forget to recalculate you can claim the ‘arrears’ at a later date but seek early legal advice if this happens as you are unlikely to be able to recoup maintenance arrears that are over 12 months old.
What should I do if I pay maintenance to an ex-spouse?
If you do not pay the revised amount, you will be in breach of the order. Seek independent legal advice if you don’t understand the terms of your order. If you do not comply with an order to pay maintenance, you will be liable for the arrears and your ex-spouse may initiate enforcement proceedings for those arrears.
If your income is failing to rise with inflation, or for any other reason the payments become unaffordable, try to communicate with your ex-spouse about it, and consider mediation or arbitration which will be quicker and cheaper than contested proceedings. If you are unable to reach an agreement a court application for a variation may be your only option. It is always important that you seek legal advice.
We are currently in the process of negotiating a financial settlement
If spousal maintenance is likely to be within your financial order, think about whether there should be an indexation clause included in the order. You should discuss this with your legal advisor.
Can spousal maintenance orders be changed?
Yes – spousal maintenance orders are variable. That means that the amount to be paid can be reduced or increased, the term for payment can be increased or decreased, or the order can be terminated (unless there is a section 28(1)(a) Matrimonial Causes Act 1973 bar, which prevents the receiving spouse from applying to extend the fixed term that maintenance is payable for). However, this bar does not prevent either party from applying to the court during the term to vary the amount paid.
What does the court take into account if either of us applies for variation of an order?
The court will consider all of the circumstances of the case – including the ability of the payer to continue to make payments, and whether the amount of maintenance meets the needs of the recipient. The court will look at whether the original order is still doing what it was intended to do. Bear in mind that the legal position in respect of maintenance has changed over the years and the court wishes the receiving party to transition to independence, if possible, and is keen to make clean break orders, where appropriate.
Courts can increase or decrease maintenance and may take it away completely. Therefore, seeking legal advice on such applications is crucial.
What happens with child maintenance?
Child maintenance is different. The Child Maintenance Service take into consideration the paying party’s income. Therefore, if the income does not change there will not be a change to maintenance (unless the children spend more or less time with that parent). If the paying party’s wages rise with inflation, there will need to be a re-assessment of child maintenance.
If child maintenance is funded via a court order, legal advice should be taken, as it may be advantageous to one or both parties for it to be replaced by a Child Maintenance Service assessment after 12 months.
Please do get in touch with our Family department if you would like further advice firstname.lastname@example.org