The impact of the coronavirus pandemic on Spousal maintenance
The impact of the coronavirus pandemic on Spousal maintenance.
Whilst some businesses are slowly reopening, many employees remain on furlough, have taken reductions in salary or are facing the prospect of being made redundant. As a result many ‘high’ earners are no longer in the position to afford their monthly spousal maintenance obligations, as well as meeting their own outgoings.
Whilst this reduction in income may only be temporary, the result of months of overpayment of monthly outgoings or arrears in spousal maintenance can be devastating not only the paying parties’ finances but their home life and mental health.
Spousal Maintenance – What is it?
Spousal maintenance is a continuing obligation for one party to pay the other a weekly or monthly income, with the purpose being to assist in achieving a fair outcome on divorce, bearing in mind the principles of needs, compensation and sharing.
The vast majority of Spousal Maintenance orders will include a ‘trigger’ event for Spousal Maintenance to come to an end such as, the death of either party, the recipient’s party’s remarriage or the children of the family reaching the age of 18. Some orders could include caveats that if the paying parties income falls below or rises above a certain threshold that the level of Spousal Maintenance will vary accordingly. Where orders do not include such terms, it is possible to make an application to the Court to vary the maintenance order.
Applications to vary Spousal Maintenance Orders can be costly and if the change in income is likely to be temporary, as a result of the coronavirus pandemic, it is important to take a practical approach in light of the current situation and where possible, communicate with each other to reach a sensible solution.
As the ‘Paying Party’:
- You should ensure that you communicate with the recipient party at the earliest opportunity that you will not be in a position to continue paying Spousal Maintenance at the ordered rate and it is crucial that this is communicated before you reduce or cease payment.
As the ‘Recipient’:
- You should ask for evidence to support their change in circumstances, such as a copy of their furlough agreement or a letter from their employer notifying them of a change to their employment status.
- Consider your monthly outgoings and income needs, as well as your former partner’s financial position and see whether it is possible to agree to a reduction to payments to reflect the reduction in their income.
- If the change in your ex-partner’s income is temporary due to them being furloughed, consider reducing payments for a set period of time, such as three months, to tie in with their return to the workplace.
- If due to a reduction in their income, the paying party is unable to meet their own obligations, you may wish to consider agreeing to nominal maintenance or no maintenance for a set period of time until they are able to get back on their feet.
If you are unable to communicate directly with your ex-partner, it is possible to conduct negotiations through solicitors, or via mediation in order to reach an amicable agreement without going to court.
If you are unable to reach an amicable agreement and Court proceedings are likely, it is important to consider that the Courts will vary Orders for Spousal Maintenance if a party can demonstrate (with evidence in support) that there has been a significant a change in their financial position, which will have an immediate financial impact, thereby justifying variation.
How Tolhurst Fisher can help
Our Family Solicitors can provide advice on Spousal Maintenance or other family law issues and should you require more information, please contact us today.