What Are Spousal Maintenance Agreements?
A spousal maintenance agreement is an agreement made between two separating parties that allows for one party to receive payments from the other. This is to ensure that both parties can fulfil their financial needs during separation.
You may have heard of it being referred to as ‘alimony’, however, this is the term used in the United States.
What is spousal maintenance?
Spousal maintenance refers to continuous financial payments made from one party to another after the breakdown of a relationship. These payments require proving that:
- One party is unable to support themselves financially and
- The other party is able to support them
There is no exact formula that the court applies to determine how much your payments will be.
Other factors that may be assessed in determining the amount of spousal maintenance payable include:
- Which party has accepted responsibility for any children in the relationship, and if so, how much responsibility
- Both parties’ financial earning capacity
- The standard of living that is reasonable within your particular circumstances
- Other appropriate factors such as other family resources and commitments.
Spousal maintenance is particularly relevant in cases where there is a large difference in income earning capacity between the two individuals. It is also important where one individual has given up work to take care of children or property within the relationship.
It is important to note that spousal maintenance is separate to child support. An individual can apply for spousal maintenance and does not need children to qualify.
Spousal maintenance is also different to property settlement. Whilst property settlement concerns both the assets and income of both parties during the relationship, spousal maintenance concerns only income and focuses on the current and future ability of both partners to support themselves financially.
What is Required in a Spousal Maintenance Agreement?
For spousal maintenance agreements to be valid, they must:
- Be in writing and signed by both parties;
- Include a statement declaring each party has received independent legal advice from a licensed practitioner regarding the effect of the agreement before it was signed; and
- Include a document, for each party to the agreement, signed by the practitioner who provided the legal advice, and which verifies that the advice was provided.
Importantly, the agreement will be void unless it clearly identifies:
- The party, or child, or children, for whose maintenance provision is made; and
- The amount, or the value of the maintenance to be paid.
How are Spousal Maintenance Payments Calculated?
The amount that a Court orders an individual to pay will depend on what the paying party is capable of affording. The Court will consider the following:
- If the party receiving maintenance is unable to support themselves from their individual income or capital to a standard of living which is reasonable.
- If the paying party has the capacity to contribute to some or all that cost for a period of time.
How is spousal maintenance paid?
There are many different ways spousal maintenance can be paid.
Payments of spousal maintenance can be paid for an indefinite period of time or can be made for a specified period. This will depend on your particular case, as spousal maintenance is determined on a case by case basis.
Generally, spousal maintenance payments will be paid until all property matters following your relationship breakdown are finalised. After sepaaration, each party will generally be accepted to find their own financial means to support themselves.
What if I am in a de facto relationship?
Both married individuals and those in a de facto relationship can apply for spousal maintenance.
Different Types of Spousal Maintenance Payments
Periodic Spousal Maintenance Payments
The first type of maintenance is made on a periodic or recurring basis. This arrangement will be ordered if the Court is satisfied that one party requires the assistance and the paying party is capable of providing that support.
Generally, a periodic spousal maintenance arrangement is for a specified period to allow the receiving party to be able to meet reasonable everyday living expenses. It is only in rare circumstances that these arrangements are ongoing.
Lump Sum Spousal Maintenance Payments
A lump sum spousal maintenance payment may be made when the paying party is unable to make the payments from their income on a recurring basis. The Court will consider each case individually. However, if it is found the paying party is deliberately putting themselves into circumstances to avoid having the capacity to meet the expenses of the receiving party, the Court may make an order in favour of a lump sum payment.
Interim Spousal Maintenance Payments
It is common that spousal maintenance payments are made on an interim or temporary basis. This may occur when one party has a need for maintenance directly after the breakdown of a marriage or de facto relationship.
However, for the Court to grant interim spousal maintenance payments, evidence must be provided, via an affidavit, of the financial positions of both parties’, including any information relevant to either:
- The need of the receiving party through evidence that they cannot meet their reasonable living expenses; and
- The capacity of the paying party to cover the reasonable living expenses of the receiving party.
Urgent Spousal Maintenance
The last form is a Court order for urgent spousal maintenance payments in circumstances where the receiving party is in immediate need of financial assistance. They can be made through either periodic or a lump sum payment. This is different from an interim spousal maintenance application because there is no need to provide the Court with evidence of the financial position of both parties.
What are the time limits?
As with many applications, please note that certain time limits do apply. As you can apply for spousal maintenance from the date of separation, it is best that you think about your options as soon as possible.
For separating married couples, you must lodge your application within 12 months of the date of separation. For separating de facto couples, this time limit is 2 years.
If you are unable to meet this time constraint, you will have to prove to the court that you have undergone hardship. This will most likely be difficult and costly to prove.
If you need any assistance regarding your finances after separation, please feel free to reach us via the contact form.
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