Are you / your ex paying the right level of spousal maintenance?

Spousal maintenance is a regular payment made by a former spouse following a divorce. Where spousal maintenance is ordered, it is often the case that there is provision for there to be an automatic review of the amount being paid each year to ensure the spousal maintenance stays in line with inflation. Either the payer or payee will need to calculate the change annually and the payer will then need to implement the change.

Sadly this is something that is often overlooked . If this happens over a number of years this could make a substantial difference to the amount of money the payee actually receives when compared to what they should be receiving. Whilst the onus is on both parties to remember the annual increase, the payee should ensure they diarise each year to check that this has happened as it will ultimately impact on them, and the payer may avoid flagging this where reviews have been missed. This will also avoid needing to take any further steps to secure payment of arrears.

The most common method for the inflationary review is for it to be linked to the performance of the Retail Prices Index (RPI), albeit there are other methods available, such as the Consumer Price Index (CPI).

To calculate the relevant increase in accordance with the RPI, you multiply the current spousal maintenance payment by the RPI figure for the month three months prior to the date of variation. You then divide that sum by the RPI figure for the month fifteen months prior to the date of variation.

By way of example, Jack was ordered to pay spousal maintenance to Jill of £2,000 per month. This was incorporated into a Court Order dated 1 October 2020 with provision for this to be varied annually by reference to RPI.

This means that from 1 October 2021 Jack should be paying Jill an increased level of maintenance, calculated as follows:

It is important to note that a spousal maintenance clause which includes an annual inflationary variation is entirely separate to a formal application made by the payer or payee to vary the spousal maintenance based on changes in their financial circumstances. These inflationary linked variations are automatic and are simply designed to ensure that the amount being paid does not lose its value over time. This is particularly important at the moment with soaring living costs putting a strain on all household budgets.

If you have any questions about calculating an inflationary linked variation of spousal maintenance or about a more general application to vary spousal maintenance then please do not hesitate to contact a member of our highly experienced team who will be able to assist you.