When establishing whether you have to pay spousal maintenance or whether a party has a right to receive spousal maintenance, the Court first applies a twofold threshold test:
- Does the payer have the capacity to pay? This can also be framed as – is the payer reasonably able to pay after their own reasonable living expenses have been met?
- Is the party asking for spousal maintenance unable to support themselves adequately?
Several factors are considered to assist is answering the above questions.
Age and health
The age and health of each party can have a bearing on whether you have to pay spousal maintenance. If one party has a medical condition or health issues that impact their ability to obtain gainful employment, they may need maintenance to assist in supporting themselves. The physical and mental capacity of each party is also relevant.
Your income is usually the first factor to be considered and this can include income received by way of bonuses or employment incentives.
The property you own and financial resources you have at your disposable will also be considered. The party asking for spousal maintenance may have made significant contributions to the property and financial resources of the payer.
You may be negotiating a property settlement at the same time as assessing your obligation to pay spousal maintenance. The likely outcome of your property settlement and any property settlement proposal you make is another relevant factor.
This is where your property settlement and any obligation you may have to pay spousal maintenance or entitlement to receive spousal maintenance can overlap. The party asking for spousal maintenance may have contributed to the payer’s current income by supporting them throughout their career.
Nature of relationship
Similar to a consideration in your property settlement, the duration of your relationship and how certain aspects of your relationship have impacted a party’s ability to earn an income and progress their career are relevant factors.
For example, if one party ceased employment to care for children of the relationship, this may have a detrimental impact on that party’s career progression. The objective in this scenario would be to pay spousal maintenance as a way of increasing the income of other party whilst they complete a course of education or training, or re-enter the workforce and gain the experience they may have lost whilst caring for the children. This objective, and the extent to which a spousal maintenance payment would achieve this objective, is a relevant factor.
Having the care of any child under the age of 18 years is relevant whether the child is a child of the relationship or not. Similar to this, whether a party has a commitment or a duty to maintain a child or another person needs to be taken into account.
For a child of the relationship, any child support payments being provided or future child support liabilities to a child of the relationship is a relevant factor. It may be that child support payments together with the receiving party’s modest income is sufficient for the receiving party to support themselves having regard to all the other factors to be taken into consideration.
Standard of living
Of course, your commitment and ability to support yourself is a relevant factor and is somewhat addressed in the first part of the twofold threshold test. Your capacity to pay spousal maintenance is brought into question only after your own reasonable living expenses have been met.
Whether your living expenses are reasonable or not is a question to be answered in itself. Looking at the standard of living enjoyed during your relationship and after separation may assist in answering this question.
The standard of living that has been enjoyed by the parties during their relationship and after separation is often the most contentious factor. It may be that the standard of living enjoyed during your relationship is no longer reasonable or practical. The period after separation is a difficult time and it may be that after separation, the parties were living beyond their means and enjoying a standard of living that cannot be maintained.
A final word
Whilst most spousal maintenance matters are resolved without Court intervention, the process that the Court takes is the same process that we apply when advising you and attempting to resolve your matter. All the factors and considerations taken into account by the Court, are the same factors applied when we attempt to resolve your matter.
This is a difficult task and a complicated area of law, made only more complicated by the discretionary nature of the family law jurisdiction. Before agreeing to any type of spousal maintenance, you should consider the advice of a suitably qualified lawyer. If you would like further information, please call Nolan Lawyers on (02) 8294 0018 and arrange a free consultation.