What to do if you are the maintenance payer?
If you are paying maintenance and your income has reduced or your expenses have increased, and you cannot afford to pay all of your reasonable outgoings for yourself (and your new family), as well as maintenance for your former spouse or child; you may want to reduce those payments. But, you should only do so with an agreement or court order for a variation being in place first. If you do not do this, then you have the risk of:
a) proceedings being taken against you later to enforce payment of the arrears
b) a variation application being made by your former spouse (after divorce proceedings) to pay a one off lump sum in return for all spouse maintenance claims in the future coming to an end early.
What to do if you are the recipient of maintenance?
If you are receiving maintenance and your expenses have increased so you can no longer afford your reasonable outgoings or, if you were married, have as much disposable income to fund the lifestyle you were accustomed to during your marriage, you may want to increase your maintenance. But, you should only do so after you have tried to negotiate receiving a greater sum. If you do not do this, then you have the risk of:
a) Your former spouse and/or partner making an application for a downward variation; or
b) Your former spouse making application for a one off lump sum payment in return for all spouse maintenance claims in the future coming to an end or, the court could make such an order.
What happens if the maintenance payer proceeds without an agreement or variation order?
If you do not obtain an agreement or a variation order, you may still have to pay the arrears of maintenance for at least 12 months and possibly up to 6 years, if enforcement proceedings are taken.
If your income has genuinely reduced and your expenses have reasonably increased and, there is no surplus capital from which to pay a lump sum in compensation for all future maintenance claims coming to an end early, now is the time to consider making an application to the court.
When unemployment is low there is more scope to prove to the court that a former spouse or partner should be working and increasing their own income to make up the shortfall in their outgoings. There is a greater assumption now that former spouse or partner with children should be working, at least part time, and when the children reach secondary school age, then full time. A former spouse or partner who has been out of the workforce for a number of years in order to care for the children may need a reasonable period of time to re-adjust back into the labour market especially, if, they are now changing career or trying to re-establish their career. As a starting point the
former spouse or partner will be able to earn the minimum wage. Employment agencies and/or consultants can be instructed to give some indication of when a former spouse or partner will reach their full earning potential.
If it can be shown that income has been deliberately diverted into other asset, say, a pension or business with the intent of avoiding paying maintenance, then the payee can make an application for a variation order or the court can make an order that those assets may have to be realised now in order to pay a one off lump sum in return for maintenance coming to an end earlier than originally ordered.
The court will look at how you are funding your lifestyle and if this is inconsistent with the income you are receiving, you could be required to give extensive financial disclosure of your capital assets (ie housing, pensions and trust funds) and how they have been funded for at least the last 12 months. Your former spouse is not entitled to an interest in these assets other than to receive and/or enforce a payment for maintenance.
What happens if the recipient of maintenance proceeds without an agreement or variation order?
If you apply to increase your maintenance payments and your former spouse can afford to pay one off lump sum payment in return for all your future maintenance claims coming to an end, often at a discounted rate to take into account an early payment, then the court may order that instead or, consider ways in which you can reasonably increase your income with paid employment which might have been considered impracticable or unreasonable before.
The court can ask you to provide disclosure of your capital assets (ie savings, property, pension and trust funds) particularly, if, it can be shown that you can receive your income from other sources without having to rely upon your former spouse.
How can we help you if you are the maintenance payer?
We can review your financial circumstances to assess whether you should make an application for a downwards variation or, continue with the maintenance payments at the current rate in order to avoid a claim or an order for a one off lump sum payment being made (in return for all future maintenance payments coming to an end). Before any application is issued we can advise upon ways to negotiate a settlement which will help to strengthen any claim you may have for costs against your former spouse or partner because they have been unwilling to negotiate in a reasonable way beforehand. We can help you to budget your legal costs so you can make an application for a variation in the most cost effective way.
How can we help you if you are the recipient of maintenance?
If your own income has reduced or expenses have increased, we can advise you upon the risks of you making an application for an upward variation or whether to propose to receive or accept a final lump sum payment (in return for all future maintenance payments coming to an end) instead. If there is a possibility of your future circumstances changing due to; an inheritance when your maintenance could be reduced or stopped or, you marry when your maintenance will automatically be stopped, then receiving a lump sum payment now may be to your advantage.
How will an application for a variation of maintenance proceed?
You could be waiting at least 3 months, and possibly more, before you receive your first court hearing date. At this first hearing the court will decide what further information it needs in order to decide your matter. If there should be a further hearing to try and negotiate a settlement or, whether your application should just be listed for a final hearing with some standard directions about further disclosure and the preparation of statements from both of you being made.
Use the free and confidential link on our website www.helenpidgeonsolicitors.com to obtain more information about making an application for a variation or, contact us by telephone +44 (0) 203 585 2576 / +44 (0) 07833 228181 or email [email protected] for a free 15 minute initial discussion to see how we can help you. We offer initial fixed fee appointments during which we can give you legal advice about your options and possible outcomes. Helen Pidgeon Solicitors specialise in all aspects of family law and offer mediation and the collaborative practice.
References in this article to divorce proceedings also apply to the dissolution of a civil partnership save as otherwise stated.