The Reality of Spousal Maintenance
By Amity Anderson |19 February 2020 |Parenting Arrangements and Disputes-Articles
Estranged wife claims $20,000 a month and $6,500 for groceries! New York art dealer ordered to pay spouse $100 million for 13 years! LA Dodgers’ owner’s wife claims $1 million a month in alimony!
We’ve all seen or heard headlines like these. Whether it’s the result of American television and movies or an attention-grabbing headline, the term spousal maintenance or “alimony” can send shivers down the spine of the wealthier spouse at the end of a relationship. It is easy to understand why some separating spouses are of the belief that, on separation, they will be ordered to pay their former spouse half their wage so as to keep them in the lifestyle to which they have become accustomed.
However, like so many issues in family law, there is, regrettably, a great deal of misinformation and many misconceptions surrounding this issue. As family lawyers, we are often met with questions from a concerned client about what exactly is spousal maintenance, what’s my exposure, will I have to pay half my income and will it leave me destitute.
What exactly is spousal maintenance?
As is so often the case, the reality, particularly within the Australian family law jurisdiction, is very different from these headlines. It is important to note that spousal maintenance is not child support. Child support is paid for the benefit of children. Spousal maintenance is paid for the benefit of a party’s former spouse so that their former spouse can adequately maintain themselves, and it is generally limited to a specific time frame.
Establishing a claim for spousal maintenance
Under the Family Law Act, a person with capacity to pay has a responsibility to financially assist their former spouse if that person cannot meet their own reasonable expenses from their personal income or assets.
For a party to be successful in an application for spousal maintenance, it must be established that the applicant/payee is unable to adequately support himself or herself and the respondent/payer has the financial capacity to pay spousal support. Successful applications usually involve a disparity of income and/or earning capacities between the parties.
Some common situations where spousal maintenance has been granted include:
- - one party has the care of young children and is unable to engage in employment sufficient to meet their own reasonable day to day expenses;
- - one party has been out of the workforce for a significant period of time and has become de-skilled or unemployable due to their age;
- - one party is unable to work due to illness.
It is, however, not sufficient for the payee to elect to not work if they have an ability to earn an income.
So … what is reasonable?
Unlike the Hollywood horror stories, in Australia, there is no obligation for the payer to keep the other spouse in the lifestyle to which they have become accustomed, nor do they have to share their income. This raises the question of what is reasonable. “Reasonable” is a relative term and one person’s idea of reasonableness may be very different to another’s.
One of Australia’s “big money” maintenance cases is that of Wilson and Wilson, decided in 1989. This couple had a multi-million dollar business enterprise, with net assets of $45 million. The wife claimed interim spousal maintenance of $2,750 per week, plus a lump sum of $200,000. The court had to consider whether to “fix” the amount of money payable to the wife, which would reduce the standard of living she had enjoyed pre and post-separation, pending the outcome of the case, while the husband continued to live lavishly.
The court awarded the wife $900 per week maintenance, with a lump sum payment of $100,000, until the finalisation of the case – less than half of what she applied for. The court also said that a reasonable standard of living for the party seeking maintenance on an interim basis is not necessarily the same as that of the person paying. The standard does not have to be the same as during the marriage.
How long is maintenance paid for?
In most cases, spousal maintenance would operate only for a short period of time following separation to enable the payee/applicant to re-establish themselves. For example, it may be for a period that the court considers is sufficient for the applicant to retrain and/or re-enter the workforce. However, in some instances, it may be appropriate for the payments to be for an extended period of time.
A person’s right to maintenance or their maintenance payments would cease if they remarry and, if the payee enters a new de facto relationship, the court will take into account the financial relationship between the payee and their new de facto spouse.
Are there any time limits?
Applications for spousal maintenance for married couples must be made within 12 months of their divorce order issuing. For de facto couples, an application must be made within two years of the breakdown of the relationship.
It is possible for leave to be granted to a party to make an application for spousal maintenance outside of these time frames. Leave is not guaranteed however, and an applicant should ensure they comply with the above time frames.
Each situation and couple is unique and has different issues that need to be considered, so it’s always worthwhile getting advice from an experienced family lawyer. If you have questions about your set of circumstances, contact one of our Brisbane, Ipswich, North Lakes, Toowoomba or Dalby offices today by phoning 07 4639 0000 or emailing us at [email protected].