Have you recently gone through a divorce or separation? It can be one of the most stressful times in a person’s life and calculating spousal maintenance can add to the headache. Below are some of the essential points about spousal maintenance in Australia to help you at this difficult time.
What is spousal maintenance?
Not to be confused with child support or adult child maintenance, spousal maintenance is when a former partner pays their former spouse to help them financially after they have divorced or separated. Spousal maintenance can be paid either over an ongoing period or as a lump sum. In the US, its called alimony, but in Australia we call it spousal maintenance.
How is spousal maintenance calculated?
To work out how much spousal maintenance you owe, the court takes a look at the financial records of the person applying for the maintenance. With this, the court will examine the income they earn, how much they spend and what assets they own.
If your former partner has since entered in to another relationship, the court will also look at how much this person earns and whether they are supporting your former partner at all.
If your former partner isn’t currently working, the court will also look at their ‘income earning capacity’ to determine how much they could earn if they sought work.
Sometimes the court will decide that the spousal maintenance applicant could support themselves if they wanted to, and in these cases the applications may be rejected.
How much a respondent spouse must pay
If the court finds that the former spouse needs to pay maintenance, it will look at the capacity of the respondent spouse – the person who the applicator is seeking payment from.
Again, the court will analyse their financial circumstances. The court will carefully look at the income they earn, how much they spend and their assets.
Using this information, the court will decide how much the respondent spouse should pay.
The payment details of spousal maintenance
If you are the former spouse applying for spousal maintenance, you need to tell the court how, where (which bank account) and when you would like the payments to be processed.
If you are the spouse who is paying the maintenance, its important that you keep all records to prove that you made the payments (so that you have evidence of the process).
Coming to an agreement without court intervention
You can come to an agreement between yourself and your former spouse with a Binding Financial Agreement after separation. This is a way that you can easily and efficiently decide what will work for both of you, rather than having the court decide for you.