In financial proceedings between parties to a marriage or a de facto relationship, including a same sex relationship, the Family Court and the Federal Circuit Court have the power to make such orders as they may consider proper with respect to the financial maintenance of one party by another.
Essentially, there are three different levels of spousal maintenance which may be applicable between the parties depending upon the stage reached in the proceedings before the Court.
Urgent maintenance arises where a party has an immediate pressing need for financial assistance in circumstances which might be considered desperate. This situation usually occurs immediately following a separation between the parties which leaves one of them without any financial support whatsoever.
In this situation urgent maintenance is ordered in circumstances where it is not practical to embark upon any investigation of the financial affairs of the parties or to determine with any accuracy the orders which should be made.
The Court will usually make an order of specific duration, often no more than a matter of weeks, until the parties are in a position to come back to Court with more detailed financial material to enable the Court to deal with the question of ongoing maintenance in a more thorough manner.
Applications for urgent maintenance are determined on a pragmatic basis without any real hearing on the merits. They are in the nature of “stop gap” orders but that does not mean that they have to be “breadline” orders.
An applicant for an order for urgent maintenance must not only demonstrate an urgent and immediate need but also that he/she would otherwise ordinarily be entitled to maintenance.
When the matter comes back before the Court, more likely than not it will then be dealt with on an interim basis only,
Interim Spousal Maintenance
This is simply maintenance that is ordered pending a full and final hearing. It is an order that is intended to be reconsidered in depth when the Court is able to do so.
Because of the temporary nature of interim spousal maintenance orders, the Court has a greater degree of flexibility in dealing with them. Whereas an order for urgent spousal maintenance may be made without any real consideration of the financial circumstances of the parties, an order for interim spousal maintenance will be determined based upon a relatively superficial investigation of the financial circumstances of the parties and is intended to operate only until there can be full, in depth investigation at a final hearing. Interim spousal maintenance orders are generally expressed to be “pending further order”.
Final Orders for Spousal Maintenance
A final order for spousal maintenance is usually dealt with in the same hearing as an application for property settlement. However, depending upon the nature of the property orders that are made, it may be that the interim order is continued until the property orders have been fully carried out and the relative financial positions of the parties have stabilised.
At the outset of an application for spousal maintenance the applicant must overcome the threshold test of establishing that he or she is unable to support himself/herself adequately. Only if this test is satisfied does the matter proceed.
Once the threshold finding has been established, the Court will then go on to determine the reasonable financial needs of the applicant and the financial capacity of the respondent to meet those needs.
In balancing the applicant’s needs against the respondent’s ability to pay, there is no principle that the pre-separation standard of living must automatically be awarded where the respondent’s means permit. In exercising its discretion, the Court must determine what is reasonable in all the circumstances.
Periodic Orders and Lump Sum Orders
The Court has the power to make either periodic orders or lump sum orders depending upon the particular circumstances of the case. Periodic spousal maintenance is directed to providing for the ongoing support of the applicant, usually on a weekly basis. However, circumstances which may justify a lump sum payment may arise where there is an actual need for a lump sum, for example, medical and dental expenses, furniture or a new car.
The Court will be cautious about capitalising periodic maintenance over a long period of time because it is difficult to make appropriate allowance for the vicissitudes of life and the changing factors which affect one party or the other.
Variation of Maintenance Orders
The Court may discharge, suspend, revive or vary so as to increase or decrease any spousal maintenance order. Conditions for variation include:
- The circumstances of either party have changed so as to justify modification;
- The cost of living has increased to such extent as to justify;
- Where an order was made by consent, the amount ordered was not proper or adequate; or
- When the order was made material facts were withheld from the Court.
Where the Court is considering a variation based upon a change in the cost of living, it can have regard to any changes that have occurred in the Consumer Price Index published by the Australia Statistician but only if at least 12 months have elapsed since the order was made or last varied having regard to a change in the cost of living.
If you require advice or further information in relation to any of the matters discussed in this article, please contact our Family Law team on 03 5273 5244.