Spousal Maintenance

Spousal maintenance (also called “alimony” in the United States) is the payment from one party to a marriage or de facto relationship to the other party, for their financial support. Spousal maintenance is different to a property settlement but can be considered at the same time as a property settlement or later. It is also different to adult child maintenance or child support.

It is important to formalise spousal maintenance entitlements either through Court Orders or a Financial Agreement to get security for the payment or to avoid future spousal maintenance orders.

Entitlement to spousal maintenance and time limits

A party to a relationship is entitled to spousal maintenance if they cannot reasonably support themselves and the other party has the capacity to pay (explained further below).

The time limit to seek spousal maintenance is the same as time limits for property settlements; two (2) years from the date of separation for de facto couples and one (1) year from the date of the divorce order for married couples.

How does the Court determine whether a party must pay spousal maintenance to the other?

In short, the Court will consider whether the person applying has a ‘need’ and whether the other party has the "capacity" to pay.

How is a party’s need for spousal maintenance determined?

The party seeking spousal maintenance must establish they have a need for it. This means they must show, basically, that their reasonable expenses (not including any children’s expenses) are greater than their income and that this need is due to one or more of the following reasons:

• They are caring for a child of the relationship who is under the age of 18; or
• They cannot work (or work at full capacity) due to age or physical or mental incapacity; or
• Any other adequate reason.

The Court also looks at the same factors considered when determining a party’s future needs during property settlement negotiations. You can view a full list of those here. These include a party’s age, income, necessary commitments, responsibilities to support another person and the length of the marriage or relationship and the effect it had on the party’s income earning capacity.

When assessing a party’s income, the Court ignores certain social security payments or allowances (for example, Centrelink payments).

How does the Court determine a party’s capacity to pay spousal maintenance?

To put it simply, when the Court looks at the other party’s capacity to pay, it will look at whether there are any leftover funds after that party’s reasonable expenses and asset position (including property and financial resources).

The Court’s discretion

Once the Court determines the above steps, it has the discretion to decide whether or not to make an order for spousal maintenance.

Usually, the Court will award spousal maintenance if the above steps are met, but there may be other reasons the Court can decide to make an order for spousal maintenance. 

What types of orders can the Court make about spousal maintenance?

The Court can make the following orders in relation to spousal maintenance:

• Urgent – the Court can order urgent spousal maintenance without the detailed steps above if, on the face of a case, a party requires “immediate financial assistance”. This is only for a short period of time until the Court can determine the spousal maintenance claim in full.
• Periodic – the payment of spousal maintenance can be ordered to be weekly/fortnightly on a final basis (either indefinitely or for a period after the end of the proceedings) or an interim basis (this means “in the meantime”, for a short period of time until the Court orders that the payment extend or stop on a final basis).
• Lump sum – instead of periodic spousal maintenance, the payment can be in one or more lump sums (called capitalised spousal maintenance).
• Security for payment – the Court may order the party that is liable to pay spousal maintenance to give security to the other party for the periodic or lump sum payment. This can be by way of charge over real estate or the power to sell property if the spousal maintenance payment is not made.

In rare cases, the obligation to pay spousal maintenance may be indefinite.

When does spousal maintenance end or when can it be changed?

The obligation to pay spousal maintenance ends when:

• either party dies;
• the party receiving spousal maintenance marries another person. The obligation to pay does not end when the other party enters into a new relationship but may be relevant if you are the payer and you want to apply to stop the obligation to pay; or
• the time limit agreed upon or ordered by the Court is reached; or
• the Court orders the obligation ends if a party paying the spousal maintenance makes an application to end the obligation to pay due to certain reasons. Those reasons could include changed financial circumstances, changed cost of living or the Court was not informed of an important fact when it ordered the spousal maintenance.

How we can help

Smith Family Law can provide you with advice as to your obligations or entitlements in relation to spousal maintenance and the best way to secure your claim or avoid future claims.