Changes to energy prices – how might this affect spousal maintenance

With the country currently in crisis with the increase in utility bills and fuel costs, our family team are noticing a rise in the number of enquiries from people regarding spousal maintenance.

It is unsurprising that as the payer, you would want to try and vary the amount downwards whilst as the payee, you would want to try and increase the amount received.

So, what exactly can be done? Perhaps, it would be helpful to take it back to the basic principles to start with.

What is spousal maintenance?

It is a payment from one party to another as part of their divorce and is typically paid every month. In most cases, it is for a fixed period of time and in rare cases, for the rest of the recipients life-time (a ‘joint lives’ order).

How is it assessed?

A court would carefully consider each party’s budget in order to assess what their ‘needs’ are as part of their settlement. If one party falls short of their ability to meet their needs, the other can be required to meet that shortfall if they are financially able.

The court can make a maintenance order “index linked”. This means the maintenance payments will be automatically varied in line with any increase in the Consumer Prices Index (CPI). The CPI is generally preferred over the Retail Prices Index as CPI does not take into account housing costs. Indexation allows for an annual automatic variation of the sum being paid in the hope that this will then keep track with the increase in living costs.

Can it be varied?

A court has the power under the Matrimonial Causes Act 1973 to vary or discharge an order for spousal maintenance if there has been a material change of circumstances.

As part of the application, the parties would have to provide up to date financial information focusing upon their needs and resources. The court will then assess if the circumstances justify there being a variation or discharge.

Capitalisation of maintenance

As part of the application, the court would also assess whether there should be a capitalisation of spousal maintenance whereby it is paid as one lump sum as opposed to monthly payments.

There are advantages and disadvantages to this approach. Whilst a Court would always consider whether a clean break is appropriate, they would need to ensure that neither party is subject to undue financial hardship.

As these matters require specialist legal advice and where there are rules about costs, you shouldn’t hesitate in contacting a member of our specialist team for advice.

Contact our Family Lawyers

This article is written as a general guide and believed correct at the date of publication. If you need further or more specific information relating to your situation, please get in touch with our Family team on 0118 978 0099, email info@cliftoningram.co.uk or complete our online contact form.