The last few years have seen a large change in the way spousal maintenance is viewed by the Courts.
Since the judgment in Wright v Wright in 2014, the wife of a wealthy veterinary surgeon appealed against the High Court’s decision to slash her maintenance. Initially, her maintenance was ordered on a ‘joint lives’ basis and she was receiving, in addition to monies for the children and school fees, £33,600 a year. The decision was upheld by the Court of Appeal and the maintenance order was varied so that it would cease in 5 years’ time, on the husband’s retirement. In the meantime, the payments would step-down.
Prior to this, it was often the case that maintenance would be awarded to a spouse requiring ongoing maintenance on a ‘joint lives’ basis. Meaning the maintenance obligations would end on the death of one of the parties. This position has largely changed and the Courts, at least regionally, have moved away from joint lives orders instead making ‘term’ maintenance orders. This means that the order will specify a period until the maintenance will end.
But what happens if during the lifetime of the maintenance order, the financial picture changes?
A maintenance order is always capable of variation, either upwards or downwards, as in Wright v Wright, or termination. A significant change in circumstances since the making of the order may warrant a variation, or termination, of the maintenance. Such circumstances may include:
- A significant increase or reduction in either party’s income
- An inheritance
- The recipient’s cohabitation [maintenance orders automatically terminate if the recipient remarries or enters into a civil partnership].
With the financial impact of Covid, we are seeing increasing numbers of enquiries about existing maintenance orders which are being unfulfilled. Your, or your former spouse’s, financial circumstances may have changed significantly as a result of furlough, a reduction in pay or working hours, or even redundancy, resulting in reduced income. This may mean that consideration should be given to either varying or terminating the existing order. This can either be done by consent or by way of an application to court under a similar procedure to the original financial application.
It is worthwhile noting that a claim for maintenance may be ‘bought out’ by the other party by way of a lump sum payment, known as capitalisation and a clean break. This is something about which you should discuss with your specialist legal advisor.