Spousal Maintenance

Being married or in a de facto relationship creates a mutual obligation of financial support between parties. Following separation, the issue often arises about the extent to which the economically stronger spouse should provide monetary assistance to the party with less resources.

“Spousal Maintenance” is the term given to the payment made between former partners to ensure that the reasonable living expenses of the financially weaker party are met from the stronger party’s income or resources.

Spousal maintenance is completely separate and distinct from property settlement, which allocates the net assets of a relationship between the parties on a final basis. It is also different from child support, which is paid solely for the support of the children. Spousal maintenance can be payable in addition to child support, depending on the parties’ financial circumstances.

In general terms, spousal maintenance is considered a financial “balancing act” between the proper and reasonable needs of one former spouse versus the other’s capacity to pay

Under Australian Family Law, a party has a limited period of time to make an Application for Spousal Maintenance. This time limit is dependent upon whether the parties were formally married or in a de facto relationship.

If the parties were married, the Application for Spousal Maintenance must be lodged at Court within 12 months of any Divorce Order becoming final. After the 12 month period has expired, the claimant has to file a preliminary Application to prove hardship to themselves or a child in order for maintenance to be considered. They also need to establish that, at the time of the 12-month deadline, they were unable to support themselves without an income-tested pension, allowance or benefit.

If the parties were in a de facto relationship – including same-sex parties – the Spousal Maintenance Application must be filed within 2 years from the date of separation. Once this 2 year period has elapsed the Applicant must similarly demonstrate hardship at the relevant time before the claim will be allowed to proceed.

It is not uncommon in cases involving de facto relationships for the date of separation to become a contested issue. Don’t leave making an Application to the last minute, as these can initially be rejected on purely administrative grounds e.g. – the Affidavit being improperly witnessed. This then creates an additional hurdle to a successful claim.

It is also important to realise that even if parties have been separated for e.g. 5 years but are still legally married, then the wealthier spouse can still be subject to a maintenance claim.

No – “alimony” is an American term which has crept into our verbal culture via TV and movies, and is not recognised by Australian Family Law. Our law refers instead to “spousal maintenance”, and the circumstances under which alimony is paid in the United States are not at all comparable to the factors taken into account in Australia.

Both married couples and couples (including same-sex couples) who live in a de facto relationship have the capacity to apply for maintenance from the date of separation.

The factors to be considered in determining a claim are basically the same whether the parties were married or living de facto – the general premise is that the claimant has to establish not only that they are incapable of adequately supporting themselves but also that the other party has sufficient income and/or resources to provide them with such support. The right to spousal maintenance arises upon marriage or, in de facto cases:

• where the parties have lived together for at least 2 years; or
• there is a child of the de facto relationship under the age of 18 years; or
• the Applicant has made substantial financial or non-financial contributions to the relationship (see Section 205ZG(4)(a), (b) and (c) of the Family Court Act (WA) 1997).

In a word – yes. As a general rule, the re-marriage of the party in receipt of spousal maintenance will bring the right to receive those payments to an end, – and if you re-marry, you are under an obligation to advise your former spouse of your new circumstances.

Otherwise, it is possible for the payer to apply to recover all maintenance paid since the date of the marriage. If you enter a de facto relationship the Court will take into account the circumstances of the financial arrangements between you and your new partner when determining if you are able to support yourself adequately.

The Family Court will totally disregard any income-tested benefits or entitlements a party receives from Centrelink when considering if a former spouse should pay maintenance. It is generally accepted that if a person can afford to financially support their ex-spouse then he or she should do so, as opposed to the taxpayer.

If you do receive maintenance – whether by agreement or Court Order – you are obliged to advise Centrelink of the amount paid, even if your benefits may be re-assessed as a result.

The party applying for spousal maintenance must demonstrate that they cannot adequately support themselves via their own income and resources; and that the other party has the reasonable capacity to pay the amount required to, effectively, “cover the gap”.

In considering whether to make a Spousal Maintenance Order – and, if so, how much – the Court will take into account numerous factors which can be found in Section 75(2) of the Family Law Act or, for de facto couples in WA, Section 205ZD of the Family Court Act (WA).

These factors include the following:

• The age and state of health of each of the parties;
• The income, property and financial resources of each of the parties;
• The respective physical and mental capacities of the parties for gainful employment;
• Which party has primary care of any children under the age of 18;
• The commitments of each of the parties which are necessary to enable that party to support themselves, any child, or any third party that person has a duty to maintain;
• The eligibility of either party for a pension, allowance or benefit;
• A standard of living that in all the circumstances is reasonable;
• Whether receipt of maintenance will increase the recipient’s earning capacity;
• The extent to which the proposed recipient of maintenance has contributed to the income-earning capacity, property and financial resources of the other party;
• The duration of the marriage/relationship and its effect on the claimant’s earning capacity;
• The rights of any creditors;
• The need to protect a party who wishes to continue that party’s role as a parent;
• Whether either party is cohabitating with another person and, if so, the financial circumstances relating to that cohabitation;
• The terms of any property settlement orders or binding financial agreement that may have been effected between the parties;
• The extent of any child support being paid;
• Any other fact or circumstance which, in the Court’s opinion, the justice of the case requires to be taken into account.

As can be seen from the above, the Court will consider a vast multitude of factors and it has a very wide discretion indeed in reaching a decision.

The general premise as to whether spousal maintenance is payable between spouses can be summarised as follows:

• Is the Applicant exercising their capacity to support themselves to a reasonable extent?
• If that capacity is being exercised, does there still remain a reasonable financial need?
• If so, does the proposed payer have the financial ability to assist, taking into account their own commitments whilst permitting them a standard of living that in all the circumstances is reasonable?

If this threshold test is reached, the Court can order either lump sum, interim or urgent spousal maintenance.

Lump sum spousal maintenance can be ordered under Section 77(A) of the Family Law Act (for married couples) or Section 205ZF (for de facto parties) of the Family Court Act. Such an order can occur when the payer of maintenance has insufficient income to make periodic payments to the other party, and the Court looks instead at the value and availability of his or her assets to provide a lump sum amount of maintenance. 

This sometimes occurs when the economically stronger party intentionally divests themselves of resources and/or income to avoid a claim or consistently fails/refuses to make periodic payments. The recipient must ensure the payment is applied to their stipulated living expenses, and not for other purposes (e.g. an expensive overseas holiday or a new car).

An interim spousal maintenance order can be made if a party requires financial assistance immediately following separation. Both parties need to file Affidavit evidence supporting their respective positions, and submissions are made to the Judicial Officer at a Court hearing.

After considering all the evidence and listening to the parties (or their lawyers) the Court may conclude that the claimant has a reasonable need and the other party has the capacity to pay, and make an interim spousal maintenance order accordingly. This order will remain in place until Trial or the case is resolved by consent, or else an Application is made to vary, suspend or discharge the Order due to one party’s change in financial circumstances.

Urgent spousal maintenance is determined summarily, usually in circumstances of emergency where, in practical terms, the Court has no time to order the filing of Affidavits, to hear contested evidence and to deliberate over its judgment. The financial need has to be very clear, and the capacity of the payer largely beyond doubt.

An example of where urgent spousal maintenance might be appropriate is where a mother and children are about to be evicted for non-payment of rent, whilst the father is in well-paid, secure employment. The Court in the short term will take a pragmatic approach as opposed to deliberating on the merits of the case and considering all the nuances of the parties’ evidence.

The obligation to pay spousal maintenance is intended to assist the economically weaker party to “get back on their feet” financially after separation.

In most cases, maintenance will be payable for a comparatively short time, enabling the recipient to undertake a period of re-training or qualification to re-enter the workforce. Often, the payment of maintenance will end when the youngest child reaches school age, when the primary care-giver is expected to seek employment. 

However, the issue is never “black and white”, and although it’s an old cliché, every case is different and will be determined on its own facts and circumstances.

The factors which a Court considers in determining whether to make a spousal maintenance order will also determine for how long such an order applies – e.g. 6 months, 2 years, 5 years, etc. Generally, the main factors involve the following:

• The age of each party and the extent of working future they have left.
• The age of and extent of care and supervision required for any children.
• Whether the claimant has an illness, disability or incapacity that inhibits their ability for gainful employment.
• Whether the net assets of the relationship for distribution are minimal as compared to the proposed payer’s income.

The Court has wide-ranging powers to determine the amount of maintenance payable and the timeframe for which it will apply. In certain rare cases, spousal maintenance orders have been made “for life”. The death of the recipient will bring the spousal maintenance order to an end and, except in very limited circumstances, this will also apply to the death of the person making the payments.

The Court has virtually unfettered powers to discharge, increase, decrease or suspend an order for spousal maintenance.

If the party receiving maintenance should start e.g. a well-paid job, move in with a new partner, or receive a substantial inheritance, the person making payment can file an Application for the existing Order to be wholly discharged, or otherwise varied to reduce the payments made.

By the same token, if the payer of maintenance was to be made redundant, be hospitalised or for whatever reason suffer a decline in their financial circumstances, they could apply to have the Order discharged, varied or suspended.

However, once an Order has run its course and expired, the right to apply to extend the longevity of the Order or increase the amount payable is lost. 

Under Australian law there is no obligation for the payer of spousal maintenance to keep their ex-partner in the same lifestyle they might have enjoyed during the relationship, and the parties’ incomes do not need to be “equalised”. 

If resources permit, both spouses should, post-separation, continue to live at the standard they previously enjoyed if this is reasonable, but in many cases both parties’ financial comfort is inevitably reduced. 

An applicant is not entitled to live a luxurious “all frills” lifestyle simply because the other party has considerable wealth, and there is no legal principle that the claimant’s pre-separation quality of life should continue indefinitely just because the other party can afford to maintain it. 

In one well-known 1980s case, the husband’s business assets totalled more than $40 million. The wife sought maintenance of $2,750 per week, together with a lump sum maintenance payment of $200,000. According to the wife, this would maintain her standard of living at pre-separation levels.

Ultimately, however, the Court decided to award the wife $900 per week periodic maintenance, with a lump sum of $100,000 pending resolution of the property settlement proceedings. The Court stated that a “reasonable” standard of living for the party claiming interim maintenance is not necessarily equal to that of the payer’s, and one party can have a higher, more luxurious existence than the other.

At the other end of the spectrum, “adequate” does not mean subsistence level.

As with all aspects of family law, it is best to resolve issues by discussion and agreement rather than by litigation. If you and your spouse can agree an amount that is reasonable for a set period of time, then this can be embodied in an Application for Consent Orders to be filed at Court. Such an Application can deal with both property and maintenance, or maintenance alone.

Often, however, separating parties refuse to accept either that the other needs financial support; or that the other has fully disclosed their income, assets and resources. Litigation can then become inevitable.

An Application for Spousal Maintenance can be initiated in the Family Court of Western Australia by filing a Form 1 Initiating Application setting out the Orders sought, with Affidavit evidence to support it. A Form 13 Financial Statement will also be required – with particular attention paid to Part N of that Form being a table of the claimant’s reasonable average weekly expenses.

Although there is normally a filing fee of $360 to accompany the Form 1, this can be waived if the Applicant proves they are entitled to Centrelink benefits by providing a copy of their Centrelink or Health Care Card. The other party (or “Respondent”) if they are opposing the claim needs to file a Form 1A Response, an Affidavit in support and a corresponding Form 13 setting out their assets and liabilities, income and expenditure.

Unfortunately there is no similar tool available to calculate with any degree of precision the amount of spousal maintenance you may be entitled to receive, or have to pay.

The Child Support Agency uses a fairly standard formula based on the parties’ last tax returns and how many nights per week they each spend with the children.

However, as can be seen from looking at Section 75(2) of the Family Law Act (or Section 205ZD of the Family Court Act (WA) for de facto couples), the factors to be considered by the Court in determining the nature, amount and longevity of spousal maintenance payments are simply far too numerous.

Furthermore, judicial discretion means that different judicial officers may reach different conclusions on the same facts about how much maintenance should be paid – if at all.

Central to determination of a spousal maintenance claim is an assessment of the parties’ respective incomes, resources and reasonable expenses. How the Family Court will consider these will vary from case to case whether the Order sought is urgent, interim, periodic, lump sum or final. In some cases a weekly expense may be allowed whilst in others that same expense will be rejected as unreasonable. The assessment of each individual case involving a multitude of different facts and circumstances will – together with the broad ambit of judicial discretion – result in considerable uncertainty for the lay person as to the likely outcome. Before making an Application for or paying spousal maintenance you should obtain advice from an experienced family lawyer.

You can help your lawyer calculate the amount of spousal maintenance to be paid (or not paid) by providing them with the following:

• your last 3 tax returns (if completed) and/or your last 6 payslips;
• evidence of any Centrelink benefits received;
• the most recent Child Support Assessment (if applicable) or, if not yet assessed, calculate this via the On-line CSA Calculator;
• prepare a list of your reasonable weekly expenses incurred over the past 3 months and a budget detailing your anticipated outgoings for the next 3 months. Annual or “one-off” payments should be broken down into a weekly amount;
• back up this budget with evidence – utility accounts, grocery receipts, petrol receipts, etc; and
• to the best your ability, create a similar budget for your ex-spouse.

Under Australian law property settlement or spousal maintenance is not affected by one party’s “fault”.

Accordingly, which party (if any) was “responsible” for the breakdown of the relationship will not impact a Court’s decision to award maintenance.

If a spouse was unfaithful, or behaved in an unreasonable way towards the other spouse the factors considered by the Court in determining a maintenance claim will not change.

A Spousal Maintenance Order (like any Family Court Order) is enforceable.

So if your former spouse refuses to pay or ceases making payments after being ordered to do so by the Court, you will need to file an Enforcement Application. This is effected via a Form 2 Application setting out the Orders sought and an Affidavit in support describing the circumstances of the failure to comply.

For repeat offenders, the Court can consider making an Order that your ex’s employer deduct the appropriate sums from their income and pay it to you instead.

The Court could also order the seizure and sale of any assets owned by your ex – e.g. car, boat, etc, or order the sale of shares – with the proceeds being utilised to meet your entitlements. You should also seek an Order for interest on the sum due, together with your legal costs.

No – just like child support, spousal maintenance payments are not taxable and don’t have to be declared as income. You will however, have to declare any spousal maintenance received if you are receiving Centrelink benefits.