Written by Jessica Swain
The economic impact felt by many Australians as a result of COVID-19 has had significant financial implications for many families. These challenging financial circumstances may be increased if you have recently separated from your spouse or partner.
Pursuant to Section 72 of the Family Law Act 1975 (“the Act”), parties to a marriage have a right to make an Application for spousal maintenance following the breakdown of their marriage. Spousal maintenance can also be sought by one party following the breakdown of a de facto relationship pursuant to Section 90SE of the Act.
The right to spousal maintenance involves a “threshold test” which involves:-
- If one party to a marriage is unable to support himself or herself “adequately” due to:i. Care and control of a child of the marriage;
ii. Age, physical or mental incapacity for appropriate gainful employment;
iii. Any other adequate reason; and - The capacity of the other party to pay the maintenance sought.
As a result of COVID-19, many people have experienced a loss of employment, loss of investments such as rental income or a reduction in business revenue. In light of the ongoing economic uncertainties during the COVID-19 pandemic, it is important that clients who have recently separated from their spouse or partner, have adequate financial support and are aware of options available to them.
If the threshold test is met, spousal maintenance can be paid by way of interim spousal maintenance, lump sum or on an urgent basis.
Lump Sum Spousal Maintenance
Pursuant to Section 77A of the Act (parties to a marriage) and Section 90SH of the Act (parties to a de facto relationship), lump sum spousal maintenance may be ordered where one party who is to provide maintenance does not have the income to make payments periodically and on an ongoing basis to the other party. This may be a lump sum payment by way of cash or transfer of property. In the event this lump sum Order is made, the Court must specify the portion of the property which is referable to the spousal maintenance being received by the party in need.
Interim Spousal Maintenance
Orders for interim spousal maintenance are made pursuant to Section 74 (for parties to marriage) and Section 90SE (for parties to a de facto relationship) of the Act and may be ordered in circumstances where a party requires maintenance immediately following the breakdown of the relationship or marriage. Importantly, an Application for interim spousal maintenance cannot be made until both parties have filed material before the relevant Court including a Financial Statement and Affidavit outlining their respective financial positions and evidence as to the proposed payer’s capacity to pay spousal maintenance. An interim Order is a temporary Order that can be put in place for a fixed period (reserving the liberty for the applicant to apply for an Order for the payments to continue), until a lump sum payment or transfer of property can be made, the matter is resolved between the parties on a final basis or the matter is listed for hearing before the Court in relation to that issue.
Urgent Spousal Maintenance
Where it appears to a Court that a party is in immediate need of financial assistance, but it is not practical to determine what (if any) Order should be made, the Court can make payment of a periodic payment of periodic spousal maintenance or other sums pending resolution of the proceedings pursuant to Section 77 of the Act (for parties to a marriage) and Section 90SG of the Act (for parties to a de facto relationship).
Urgent spousal maintenance Applications are heard before the Court at a time when not all evidence is at hand. In other words, an Application for urgent spousal maintenance is made in emergency circumstances where there is an obvious need but not time for the parties to provide evidence in support of the claim for spousal maintenance.
Variation to Existing Spouse Maintenance Order
In the event that one party has had a reduction in their income or earning capacity, and there is a preexisting spouse maintenance Order in place, pursuant to Section 83 of the Act (in married couples) and Section 90SI of the Act (in de facto relationships), the Court has power to discharge, suspend, revive or vary a spouse maintenance Order. In order for the Court to be satisfied that there should be a modification made to an existing Order, it must be found that one of the following applies:-
- That, since the Order was made or last varied, the circumstances of a person for whose benefit the Order was made have changed, the circumstances of the payer have changed, or
- The cost of living has changed to the extent as to justify a modification of the spouse maintenance Order; or
- If the preexisting Order was made by consent, that the amount ordered to be paid is not proper or adequate; or
- That material facts were withheld from the Court that made the Order or from a Court that varied the Order on material evidence previously given before a Court was false.
Every matter is different and will depend on the unique circumstances of the case as to whether someone is entitled to spousal maintenance and what type of spousal maintenance may be ordered.
In the event you have separated from your spouse or partner recently and are questioning whether you are entitled to receive or should pay spousal maintenance, particularly in light of financial circumstances as a result of COVID-19, please do not hesitate to contact the Family Law Team at Uther Webster & Evans Pty Ltd on (02) 9290 1177 so that we may assist you with your query.
