For many couples who get divorced ongoing maintenance doesn’t come into the equation, but if it does, it can be hard to know when payments may change or stop altogether.
How maintenance payments may be set
In cases where a husband or wife has to make ongoing maintenance payments to their ex, there are several different ways this can be done. In legal jargon, when maintenance must be paid there’s an ‘order’ from the court. There are several different types of order:
- Joint lives order. In theory the maintenance is due to be paid either until either the person paying or the recipient dies or the recipient remarries. This type of maintenance order doesn’t have an end date. However, that doesn’t mean you’ll receive maintenance forever (it just means there’s no specified end date at the outset).
- Term maintenance order. This is where maintenance is paid for a specific period (often for a few years) to give an ex wife or husband time to retrain or find work to generate an income.
SAVVY TIP: There are two types of term maintenance order, those that can be extended beyond the original term and those that can’t.
Varying a maintenance order
Even if there’s no specified end date on your maintenance payments, it doesn’t mean you’ll receive the same amount for the rest of your life. The amount of maintenance can be increased or decreased (the official term is ‘varied’) by the courts.
SAVVY TIP: If you haven’t remarried but were living with a new partner who earned a high income, his/her salary could be taken into account. Maintenance payments wouldn’t necessarily stop, but a court could decide to reduce them to a nominal level.
Capitalisation of maintenance
If you’re receiving regular maintenance payments you can apply to have them turned into a lump sum (called ‘capitalisation’). It’s something you might do if you’d found out that your ex had come into a lot of money.
SAVVY TIP: There are rules on how a regular income should be turned into a lump sum (they’re called the ‘Duxbury tables’ or calculation). These make certain assumptions about how much income a lump sum would generate. In many cases the calculations aren’t straightforward because the ex wife or husband who’s receiving the maintenance may have other sources of income (such as a pension)
Maintenance payments can be index linked, which means that the amount you receive (or pay) should rise in line with inflation. However, not all maintenance orders include index linking and, even if your maintenance is index linked, it doesn’t automatically mean you’ll receive more, says David Allison of Family Law in Partnership. “If the maintenance order includes RPI linking then it becomes enforceable at the higher level but you have to work out what the increased amount is. The court doesn’t remind people and so often neither person does anything about calculating the new amount, so it stays at the old level.”
SAVVY TIP: It’s worth checking that your maintenance payments are increasing in line with the retail prices index if you have an index linked maintenance order.
How retirement can affect maintenance payments
If the pension, owned by, for example, the ex husband, isn’t split at the time of divorce (it’s called pensions sharing in the jargon) and the ex husband pays ongoing maintenance from the time of divorce, he could go back to court when he approaches retirement and ask for the amount of maintenance he pays to be reduced. Although there’s no hard and fast formula it’s likely that a court would vary the maintenance order to reduce his maintenance payments.
SAVVY TIP: Be aware that the costs of getting the court to agree to vary a maintenance order can add up and it may be that you spend more in fees than you’d save in maintenance payments.
If you’re receiving maintenance and your ex loses his/her job it’s better to see if you can agree how much he/she can afford to pay. Most people don’t stay unemployed for long and, you may be better trying to work out an agreement between yourselves if you can.
SAVVY TIP: If you can’t agree it’s definitely worth getting lawyers involved. Using a divorce lawyer doesn’t have to mean a costly fight as there are plenty who take a far more enlightened approach.
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