Spousal Maintenance in Australia: What You Need to Know
In Australia, spousal maintenance is often seen as less common or “popular” than alimony in the United States. While the concept of one spouse providing financial assistance to the other exists in both countries, the legal structure and frequency with which spousal maintenance is awarded differ significantly.
Spousal maintenance is less frequently ordered, with a smaller percentage of separations or divorces resulting in ongoing financial support arrangements. This article delves into the specifics of spousal maintenance, the legal framework governing it, and the various factors determining whether a former partner may be eligible for financial assistance.
What is Spousal Maintenance?
Spousal maintenance refers to financial payments made by one spouse to another following a separation or divorce. These payments aim to ensure that the receiving party, often the one with fewer financial resources, can maintain a suitable standard of living after the relationship ends.
Under Australian law, spousal maintenance can apply to married couples and those in a de facto relationship. However, it is not automatically granted and is determined based on a range of factors assessed by the Family Court.
Legal Framework: Family Law Act 1975
The Family Law Act 1975 provides the legal framework for spousal maintenance in Australia. The court assesses spousal maintenance applications based on the financial needs of the receiving party and the financial resources of the paying party. The Court considers whether the receiving party is unable to meet their reasonable living expenses from their own income, assets, or financial resources and whether the paying party has the capacity to provide financial assistance.
In cases where the court orders spousal maintenance, it may be for a limited period, especially if the receiving party is expected to gain financial independence over time. The maintenance could take the form of periodic payments, such as weekly or monthly instalments, or a lump sum payment. Additionally, it is important to note that spousal maintenance may form part of a broader financial order, including property settlement agreements and child maintenance.
Interim and Final Orders
Spousal maintenance can be ordered on an interim or final basis. Interim spousal maintenance is a temporary arrangement made during legal proceedings and may be essential in cases where one party has no financial support following the date of separation.
For instance, interim spousal maintenance can be used to cover living expenses while awaiting the finalisation of a property settlement or other court orders. In some cases, the court may also order spousal maintenance to assist the receiving party in paying legal costs related to the settlement process.
Final spousal maintenance orders are made once the court has considered all factors, including the financial needs of both parties and the overall property settlement. These final orders may set a fixed amount of spousal maintenance or determine that no further financial support is required.
Spousal Maintenance in Binding Financial Agreements (BFAs)
A Binding Financial Agreement (BFA) is a private agreement between two parties that outlines their financial arrangements, including spousal maintenance and child support (which can be made under one of two types of financial agreements), either during the relationship or after it ends.
BFAs can be used as an alternative to court orders, allowing couples to settle their financial affairs without litigation. BFAs also allow parties privacy, as their settlement details are confidential, and not held on public court records. In some cases, a BFA may specify the amount of spousal maintenance to be paid or include provisions for spousal maintenance to be waived by both parties.
However, for a BFA to be legally binding, both parties must seek independent legal advice and ensure that the agreement complies with the requirements of the Family Law Act 1975. Family lawyers can provide valuable advice regarding the inclusion of spousal maintenance payments in a BFA and whether such an agreement would be appropriate given the circumstances of the separation.
Consent Orders
Parties can also agree on spousal maintenance through Consent Orders, where both parties agree on the terms without the need for a formal hearing. Consent Orders are legally binding and enforceable once approved by the Court.
Spousal Maintenance and Property Settlements
It is common for spousal maintenance to be linked to a property settlement, as both involve assessing the financial situation of the parties. In some instances, interim spousal maintenance may be used to assist one party in covering legal costs during property settlement negotiations. Spousal maintenance may also be adjusted or discontinued once a property settlement is finalised, depending on the terms of the agreement.
For instance, spousal support may be paid ongoingly on a monthly basis, it may be paid for a set period of time until settlement has been finalised, or it may be paid as a lump sum spousal maintenance as party of the property settlement.
How Is Spousal Maintenance Determined In Australia?
Unlike child support, there is no set formula or calculation for spousal maintenance in Australia. It is generally assessed on a ‘threshold basis’ by the Federal Circuit and Family Court of Australia (or the Family Court of Western Australia).
The ‘threshold’ is based on whether;
- The applicant (payee / recipient) must be able to show that they cannot reasonably sustain their cost of living on their own after divorce or separation
- The respondent (payer) must be able to support themselves wholly, and have the ability to pay their ex-partner or ex-spouse maintenance
Factors Considered by the Court
When assessing an application for spousal maintenance, the Family Court of Australia takes into account a wide range of factors.
These include:
- The financial needs and resources of each party
- The length of the marriage or de facto relationship
- The age and state of health of both parties
- The financial situation of both parties, including their ability to gain gainful employment
- Whether one party is responsible for caring for a child of the relationship, or children, and the years of age of dependents
- The standard of living enjoyed during the relationship and whether it is reasonable to expect that the receiving party maintains a suitable standard of living post-separation
In special circumstances, the Court may also consider whether family violence has affected the receiving party’s financial situation or capacity to find employment.
Time Limits for Applications
It is important to note that time limits apply to applications for spousal maintenance. For married couples, an application must be made within 12 months of the date of the divorce order. For de facto couples, the time limit is two years from the date of separation. In some cases, the Court may grant an extension if adequate reasons are provided for the delay.
Frequency of Spousal Maintenance Being Awarded in Australia
While spousal maintenance is a legal right under the Family Law Act 1975 (s 72 Family Law Act, or if a de facto relationship, under s 90SF Family Law Act), it is not frequently awarded compared to countries like the US, where alimony is a more common part of divorce proceedings. According to recent statistics, only a small percentage of Australian divorces result in spousal maintenance orders, with the focus in many cases being on property settlement and child maintenance rather than ongoing financial support for the former spouse.
Spousal Maintenance and De Facto Relationships
Spousal maintenance is not limited to married couples. De facto maintenance can also be sought by partners from de facto relationships. The process for applying for de facto maintenance follows the same legal framework, and the Court will assess the financial situation of each party, including their ability to support themselves financially and the resources available from the other party.
Urgent Spousal Maintenance
In some cases, a receiving party may apply for urgent spousal maintenance if they require immediate financial support due to their circumstances. For example, if a person is unable to meet their reasonable living expenses following the separation and has no other source of income or support, the Court may order the payment of spousal maintenance on a priority basis.
Mediation, Collaborative Law and Alternative Dispute Resolution
If parties cannot reach agreement with each other of the amount of spouse maintenance to be paid, Alternative Dispute Resolution, mediation or collaborative law, can help parties negotiate spousal maintenance terms without going to trial. If parties can agree early on, the matter will most likely be resolved with no court involvement.
Significant Change in Circumstances
A spousal maintenance order can be varied or discharged if there is a significant change in circumstances, such as one party entering a new relationship, a substantial increase in income, a large inheritance or a deterioration in health. The receiving party may also seek a variation of the amount of spousal maintenance if their financial situation worsens over time.
Spousal maintenance is a vital tool for ensuring that both parties to a separation or divorce are supported, especially when there is an imbalance in financial resources. Although less commonly awarded in Australia, spousal maintenance plays an important role in helping former spouses and de facto partners maintain a reasonable standard of living after the end of their relationship. With various avenues available, including interim orders, BFAs, and Consent Orders, spousal maintenance is a flexible solution designed to meet the needs of the receiving party in a fair and balanced manner.