Colette Bane of Knights shares her update on Family Law from her Z-A of Family Law series of articles.
Maintenance
On separation, part of the readjustment can be having to manage your finances differently, and perhaps redirecting funds from one (perhaps unnecessary) outgoing to a more pressing expense. When it comes to budgeting, it’s important to know whether you might be entitled to (or indeed liable for!) maintenance payments on separation.
Child maintenance can be payable in the event of separation (for cohabitees), divorce or dissolution, and is discussed first. Spousal maintenance can be payable in the event of divorce/dissolution only, unless the payer is feeling particularly generous and is willing to agree to pay their ex as a former cohabitee!
Child Maintenance
Child maintenance is governed by the CMS, and their jurisdiction ultimately overrides that of the Court. CMS is a statutory scheme, and they can calculate, assess, and (if needed) enforce assessments to ensure that proper payments are made.
Their calculations are, at the most basic level, based on the number of overnights the payer has with their children in a year, and what level of taxable income they receive. A full assessment can go further and look into factors relating to mortgage/rental payments, boarding school (when the child perhaps will not be living at home with the payee) etc. and can be enforced by various means, including attachment of earnings and an admin fee in the form of a % increase on the monthly payments for as long as enforcement by the CMS is required.
It is possible to seek top-ups to cover additional expenses relating to any disabilities or additional needs that a child may have, and the Court can have jurisdiction to make orders to cover these additional expenses. Each case would come down to its specific facts, and there is no ready-made formula for such expenses. Some of these expenses can be covered by a settlement, in the case of injuries / care needs as a result of an accident or negligence, in which case top-ups to child maintenance payments might not be justifiable.
Spousal Maintenance
We’re currently seeing a shift away from long-term spousal maintenance, with the Court encouraging the payee to maximise their income and to be financially independent, where possible. This can include seeking gainful employment, eligibility for benefits, and other more creative options if the assets allow (for instance, providing a mortgage-free property, thus reducing the payee’s income need).
The Court is more likely to consider short-term maintenance, where the payer’s income allows, but can still order long-term maintenance where this is justified. It is far from an assumption that the payee will receive an income for life from their ex, especially if a pension sharing order can provide them with an income in retirement, thus severing financial ties between the parties on retirement at the latest.
When making orders, spousal maintenance can be framed as spousal maintenance, which is a sum specifically for the ex and which does not include child maintenance, or as a global order which covers both child maintenance and spousal maintenance.
Whilst a global order covers both, it is important to bear in mind that the Court’s jurisdiction over child maintenance can end on the 1st anniversary of the sealed order, with appropriate notices being given by either party that they intend to apply to the CMS for an assessment. Financial orders can include recitals that neither party intends to apply to the CMS, and permission to disclose the order to the CMS so that they can see the terms of the global order that has been made. One protection that can be built in, is to make clear that payments made under a later CMS assessment are credited towards the global order payment on a £ for £ basis, to avoid a duplicate payment being made and/or to avoid the need for an application to Court to vary the maintenance due to a change of circumstances (the latter is costly, time-consuming, and undoes the finality of the sealed order).
For tailored advice, please feel free to contact Colette Bane in the Family Team at Knights if you need to talk about finances, child arrangements, or anything else Family Law-related. Contact details: colette.bane@knightsplc.com or 07384 460636
Adapted from the Z – A of Family Law series on LinkedIn ©
