There can be a lot of angst and uncertainty around spousal maintenance. When a relationship breaks down, most people will provide financial support for any children from the relationship but for their ex-partner or ex-spouse, not so much or not at all.
What many people don’t realise is under the Family Law Act 1975 and Family Court Act 1997, a person can be required to financially assist an ex-partner or ex-spouse who cannot meet all of their reasonable expenses on their own.
What is Spousal Maintenance?
Spousal maintenance is financial support provided by a person to an ex-partner or ex-spouse who is unable to financially support themselves. Under law, a person can be entitled to spousal maintenance for one or more reasons, e.g. being the carer of a young child or children or a disabled child, having been out of the workforce for several years and therefore unable to secure employment or unable to work for health reasons, etc..
Spousal maintenance can be one or more of the following:
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Periodic payments
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A lump sum payment
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Payment of a certain one off expense
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Payment of ongoing expenses
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Use of an asset such as a vehicle or living in the family home until property settlement.
The Australian Taxation Office doesn’t require you to declare any spousal maintenance payments. Maintenance is not taxable income. However, if you are receiving income-tested Centrelink payments, you will need to advise Centrelink of the spousal maintenance you are receiving.
Some people confuse spousal maintenance with child support or adult child maintenance, but the two are different. Spousal maintenance doesn’t cover the cost of supporting children, it’s support for an adult. In the US, spousal maintenance is called alimony. In Australia, we use the term maintenance instead of alimony.
#1 How is Spousal Maintenance Calculated?
The Court will consider many factors when deciding whether to award spousal maintenance. The Court needs to ensure that any payments are fair and do not put either party into financial hardship.
Section 75(2) of the Family Law Act 1975 states that the factors that can be taken into account:
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The age of each spouse
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Physical health and mental capacity of each person to gain or continue employment
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Who has care of a child/ren and if any of them are under the age of 18 years
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Commitments of each party to support themselves and/or another person
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Standard of living
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Eligibility for a pension that is not an income-tested pension
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Whether maintenance would allow the recipient to fund an education or training to gain employment or establish a business to support themselves in the future
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If the person applying for maintenance has contributed to the income, earning capacity, property and financial resources of the other person
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Duration of the relationship and any impact it has had on the earning capacity of the spouse applying for maintenance.
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Whether either spouse is living with another partner or spousal and, if so, the financial situation of the other partner or spouse
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If a spouse wishes to continue being a carer for their children
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Any child support currently being paid or may need to be paid in the future
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Any other circumstances that may need to be considered.
#2 Are People in De Facto Relationships Eligible to Apply for Spousal Maintenance?
Yes, people who were in de facto relationships are eligible to apply for spousal maintenance in certain situations. You don’t need to be a married spouse to apply for spousal maintenance.
#3 Who Isn’t Eligible to Apply for Spousal Maintenance?
Not everyone is eligible for spousal maintenance. You may not be successful if you have:
- Married another person
- Entered a de facto relationship with another person and the Court is of the view that the financial circumstances surrounding your relationship with your new partner does not justify you claiming spousal maintenance
Meeting the criteria for claiming spousal maintenance means you are eligible to apply. An application may or may not be successful as each application is dealt with on its own merits.
There are time limits on applying for maintenance. An Application for spousal maintenance must be made within one year of a divorce becoming absolute. A person from a de facto relationship has two years from separation to apply for spousal maintenance. In certain circumstances, a court may grant permission to apply outside these time limits.
#4 Must You Have Children Under the Age of 18 To Be Eligible For Spousal Maintenance?
No, even if your children are over the age of 18, you may be eligible to apply for spousal maintenance. Spousal maintenance is not child support or adult child maintenance. Spousal maintenance is not for the financial support of children, it’s for meeting a spouse's own financial needs.
#5 Can You Lose Spousal Maintenance?
Changed situations can impact on payments of spousal maintenance. If a person is granted spousal maintenance in the form of regular payments, the payments may cease if the recipient enters a de facto relationship or they marry someone else. A person receiving payments may improve their financial situation for any one or more reasons, e.g. starting work, so that spousal maintenance may no longer be required. If the person making maintenance payments has a change in their situation such as job loss or income reduction or knows their ex-partner’s financial situation has improved, they can apply to the Court to vary or discharge the spousal maintenance award. The application to vary or discharge a spousal maintenance award is dealt with on its merits.
It is important to gain legal advice before making a claim for spousal maintenance or resisting a claim for spousal maintenance or agreeing to pay spousal maintenance. There’s a lot for the Court to consider when dealing with a spousal maintenance application and every case is different.
If you would like advice on applying for spousal maintenance or resisting a claim for spousal maintenance, contact Doray Legal on (08) 9364 2588 or contact us online. You can also find out more about Spousal Maintenance here.