Paying Maintenance on a Reduced Income
The coronavirus pandemic is causing serious financial problems due to job loss or serious income reductions for some.
It will inevitably push some of those who have to meet spousal maintenance obligations from the position of being just about able to afford them to be completely unaffordable.
So, what can be done?
Potentially, it may be possible to get a maintenance order changed. There is provision for Spousal Maintenance Orders to be varied under Section 31 of the Matrimonial Causes Act 1973.
You might consider making an application to vary such maintenance payments using the Court’s fast track procedure. This means that the Court will give you a decision on your application fairly quickly (in Court terms!) so long as you provide the correct application and all the information that it needs in order to be able to make a determination.
However, such applications need to be considered carefully. It is possible that you might make an application to get a specific outcome but come away with a completely different result – possibly one that you definitely did not want.
The Court is bound to consider changes in circumstances since the Spousal Maintenance Order was made but it does other things too. The Court must take into account the reasons for the original Maintenance Order being made and will consider not only the payer’s income but also other available assets such as savings, property, etc.
The Court will want to make sure that the needs of all the parties are taken into account, especially those of the children, and met as far as possible.
So whilst the payer may well be able to argue a reduction or cessation in a Spousal Periodical Payments Order, on the basis of their reduced income, if they have other assets then these may well be taken into account.
The Court will consider whether maintenance payments are affordable or not. Whether they should come to an end, be reduced or simply suspended for the duration of this pandemic.
If you apply to vary the Maintenance Order and the Court considers that you do have capital, even though your income may have reduced or been lost altogether, the Court has to look at your global assets.
If your former partner’s income needs have increased then there is a danger that the Court might decide to increase the level of maintenance payments that it has awarded to the other person rather than reduce them.
In practice, it is likely that the Courts will be very sympathetic to applications to vary Spousal Maintenance Orders made because of a significant decrease of income or loss of income.
The exception might be if the other party is going to argue against this because their own needs for periodical payments have increased or because you have assets which may be used to pay periodical payments. The Court may well vary down, suspend or eclipse altogether the Maintenance Order that you are otherwise bound to pay. However, this process will take time. It will be expensive and it will always carry an element of risk.
There are alternatives that should be considered by anyone thinking about making an application to vary a Spousal Maintenance Order:
- Get yourself proper advice from a specialist family lawyer. Often such advice initially is provided free of charge but do check first. We at Ashtons Legal would offer you a free initial consultation by Facetime, Phone or WhatsApp so that you can understand your realistic options.
- Consider formal Mediation as a means by which you and the receiving spouse might be able to negotiate a reduction or other change to the periodical payments commitment in the longer term or even only during the period in which the pandemic exists.
- Alternatively, consider having the matter referred to Arbitration. Arbitration provides legally binding decisions in relation to the issue of Periodical Payments Orders and many other issues which are obtained outside of the Court process but which have the strength and validity of a Court Order. Arbitration is generally less expensive than going through the Court process, is quicker and you have far more choice as to the process involved in obtaining a decision through Arbitration.
Most importantly do not just sit back and do nothing when you think that you are going to be in a position of not being able to meet spousal maintenance payments.
You could find yourself unwittingly then at the wrong end of an Application to enforce the Maintenance Order and difficult cost consequences could flow from that position. You would then be on the back foot.
Instead, be proactive and consider whether you are seeking a temporary resolution, one which may well default back to the original Order after the pandemic passes and income increases or whether you are looking for a permanent change to the periodical payments that you have been ordered to pay.
Should you have any specific questions as to how this relates to your family, please contact a member of Ashtons’ specialist family law team through this website or by calling 0800 915 6037.
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