How Will Spousal Maintenance Affect my Centrelink Payments?

When going through a separation, it is important to consider whether each party will be able to support themselves, or whether there will need to be financial assistance provided by one party to another. An order for spousal maintenance typically means that one party will have to provide regular monetary payments to their ex-partner. However, lump-sum payments may be ordered in some circumstances – for instance, to facilitate the purchase of school equipment for children, furniture, or vehicles.

Spousal maintenance will be awarded in situations where:

• It allows a party to maintain a reasonable standard of living post-divorce or separation; and/or
• It is necessary to do so to allow a party to ‘get back on their feet’, while they pursue education or look for work. 

It is important to distinguish spousal maintenance from child support payments.  If you are in receipt of child support payments the court will take this into consideration, and it may be determined that additional spousal maintenance is not necessary. 

To establish a claim for spousal maintenance, the court will take into consideration, among other things, the following:

• The age and health of the parties; 
• Income, resources, and earning capacity; 
• Whether a party has the care or control of a child of the marriage who is under 18;
• Any commitments or responsibilities of the party, to each other, or other people; 
• What a reasonable standard of living is, having regard to the circumstances of the parties;
• The duration of the relationship, and how this may have impacted the earning capacity of either party; 
• If either party has commenced cohabitation with a new partner, the financial circumstances of cohabitation; 

This is far from an exhaustive list. The Court may take into consideration any fact or circumstance which the justice of the case requires to be taken into account. 

If you are making an application for spousal maintenance, it is important to note that the application must be made within 12 months of the date of a divorce order being made, for those who were married.  For those in a de-facto relationship, the application must be made within 24 months of the date of separation. If the date of separation is contested, evidence will need to be produced to the court to validate your position. 

The Duty to inform Centrelink

If you are in receipt of spousal maintenance, you are required to notify Centrelink. This will mean that your entitlement to government benefits will likely be reassessed. The Government will take the position that those who can be supported by their spouse should rely on that, rather than relying on the welfare system. 

The impact that this will have on your entitlements will vary, depending on what type of benefits you receive from Centrelink, and how much you are to receive by way of spousal maintenance. Importantly, the Court will not take into consideration any income-tested pension, benefit or allowance that a person receives when considering an application for spousal maintenance. 

Centrelink and urgent spousal maintenance

However, if you are bringing an application for urgent spousal maintenance, it may be the case that your Centrelink benefits may be taken into consideration. This is because an application for urgent spousal maintenance suggests an immediate need for financial support. The court may decide that Centrelink payments made to an individual decrease the urgent need for spousal maintenance to be ordered, where it could wait to be determined in an interim or final hearing.  Additionally, the ATO does not require you to declare spousal maintenance, as it is not taxable income. 

In conclusion, the three most important things to remember are: 

• Applications for spousal maintenance must be made within a set timeframe in order to be considered;
• Centrelink payments will not be taken into consideration when a person is applying for interim or final spousal maintenance;
• In some cases, receiving Centrelink benefits may work against an individual in an application for urgent spousal maintenance – however, this has less to do with the money being received by an individual and is more a case of whether a degree of urgent financial support is required. 

If you need help with issues around spousal maintenance or any family law issue, contact our friendly team.