The cost of living crisis and variation of spousal maintenance
For most of us the current cost of living crisis is causing us to reflect on all our outgoings and the affordability of these. This is even more acute for those who have spousal maintenance orders in place. Whether you are the payer or the recipient of maintenance, the squeeze caused by the hikes in inflation are really starting to bite. As such, spousal maintenance orders made at the time of a couple’s separation which just about balanced the competing demands of the needs of the recipient and the available income of the payer are now likely to be hitting the point of potential unfairness. This is particularly true in those cases where the original spousal maintenance order was made some years ago and included an automatic inflationary increase (linked to either RPI or CPI). With the pay rises not keeping pace with inflation, in many cases these types of orders are simply becoming unaffordable for most payers. So what can be done about it?
As my colleague Claire Burton explained in her most recent insight spousal maintenance orders are always variable for the period of time that they are in place. Indeed even if the original order included a fixed timeframe the level of monthly payments can still be varied. As such, there is every possibility that the order in place for you could and should be altered to reflect these changing times.
What is taken into account when these types of orders are reviewed?
Put simply it is a two-fold exercise balancing on the one hand the resources available to everyone and on the other everyone’s needs and how they can be met. This is often a delicate balancing act and one where there is disparity between the judges as to who should bear the brunt of circumstances outside the control of the couple. In recent years there have been some key decisions in this area which highlight that whilst an ex is not expected to mitigate against all eventualities (including poor financial management by the recipient) the court will step in where there is a genuine need for additional support. By way of example, it is likely to be very hard to dispute that where recipients cannot afford to put the heating on, a further enhancement to maintenance should be made.
Just as when orders are originally made, judges will also take into account the available recourses to meet the day to day costs. This includes any state benefit or assistance that may be available. So just like the rest of us judges will be waiting with bated breath to hear the policies that will be announced by Liz Truss and her Government to ease the current cost of living crisis.
Any judge will also want to understand the underlying intention of the original order and how the situation has changed since it was put in place that justifies a change in the arrangements. As such, it is vital that whether you are the payer or the recipient of maintenance you do your homework before embarking on any attempt to alter the arrangements that are in place.
What should I do if I think my maintenance order should be changed?
- Collate all relevant documents – the original order and any documents that explain the basis on which it was made (eg a final judgement in the original proceedings, your barrister’s position statements from hearings, any asset schedules, correspondence detailing the agreement reached).
- Prepare a summary of how your position has changed giving particular focus to your income (from all sources) and outgoings, together with any changes to your health or caring responsibilities. It is important to remember that temporary changes in circumstances, like being in between jobs, will be unlikely to be sufficient for the court to alter the maintenance long term.
- Prepare a summary of any information you know about your ex’s current financial position and in particular, any changes there have been since the original order was made.
- Take early legal advice. A specialist lawyer will be able to review the above and give you an indication of what a court is likely to do in your situation. It is important that you appreciate that there are a range of options open to a judge when considering the variation of a maintenance order. This includes assessing the level of payment and term but also whether the order can be cancelled and the recipient receive a lump sum payment or pension share instead. All of these are things that you will need to consider carefully. It is also important to remember, however, that reviewing the maintenance order is not an opportunity to change things about the original financial settlement that you are not happy about.
In doing the above it will help you to understand if there is scope for the maintenance provision to be altered (upward or downward or to be capitalised) or whether the implications of the cost of living crisis we are all facing is simply a matter that you and your ex will need to manage by cutting your own costs accordingly, as the one thing the court simply cannot do is create more money where there is none!
If you would like some bespoke advice about whether your spousal maintenance payments should be altered then please click here to liaise with a member of our specialist team.