Does furlough, the new job support scheme or redundancy affect my maintenance?

30th September ‘20

 

The short answer is…possibly yes.  Maybe.  It depends.

To begin with, Child Maintenance should be removed from this discussion, because in most cases this is dealt with by the Child Maintenance Service, so this article is concerned with spousal maintenance. Secondly, when considering spousal maintenance, it is best to narrow the scope of the discussion to the possible variation of maintenance paid under an existing court order. If one party has not been ordered to pay maintenance, but does so voluntarily, they are under no obligation to pay maintenance save for Child Maintenance, if appropriate.

Where the court has ordered ongoing spousal maintenance as part of an overall financial settlement, the court will have looked at all circumstances of the marriage when the parties originally came to a financial settlement. Whether by consent or through a final decision by the court, there will have been scrutiny of both parties’ financial position, including their capital, income and pension provision. The court will have determined that there was a genuine need by one party, to pay ongoing maintenance, to the other for a specific period.

Have your circumstances changed?

Where either party wants to vary a maintenance order, they will likely need to demonstrate that their circumstances have changed.  If the receiving party’s income has reduced and they therefore need additional funds, or the paying party has suffered a loss of income, the court will review what has prompted a re-examination of the maintenance sums.  The court will also want to consider other relevant factors, such as the parties’ income from all sources, capital positions and outgoings.

There are endless reasons for one party needing to receive maintenance; it could be because the receiving party has no income and cannot meet their outgoings, to support a mortgage application or whether there are insufficient assets in this jurisdiction to properly meet one party’s needs.

The court will also have to consider if the paying party has enough income to pay maintenance.  The paying party needs to not only be able to meet the monthly maintenance order but will also need sufficient income remaining afterwards to discharge his or her own monthly outgoings.

Therefore, if the paying party also happens to be put on furlough, the new job support scheme or made redundant, there needs to be an examination as to what has happened to their income in real terms.  If a person placed on furlough/job support scheme has not experienced a change in lifestyle, because their salary has not changed, or only changed slightly, the court is unlikely to think a change is appropriate.  If furlough/the job support scheme has unfortunately caused a significant or dramatic drop in salary, the court may consider a variation of maintenance to be appropriate.

It should be noted that this issue cuts both ways – if the receiving party has been furloughed / put on the job support scheme, has this impacted on their ability to meet their outgoings?  If they are receiving a sum similar to their normal salary, the court may well take the view that their circumstances in a practical way has not changed.  At the same time, has the paying party’s income changed?  Can it support an income – these are all relevant factors.  One cannot get blood out of a stone simply by wishing it so.

Is Redundancy treated the same?

Redundancy is however a very different issue; redundancy is a lump sum payment made to a party designed in part to help them meet their outgoings whilst they look for new employment.  The court will query whether the paying party will be able to secure new employment, and if so on what terms and pay?  How long do they expect to be back at work, and what can be paid during this time?  The court will want to conduct a detailed analysis of the situation.

What should you do if one or other party has suffered a significant and detrimental impact to their income where maintenance has been ordered? 

If possible, the parties should try to speak frankly about the changes and try to reach an amicable arrangement.  If an agreement cannot be reached, seek early legal advice to try to resolve matters proactively.

If you require support or guidance on the issues highlighted in this post, or generally on divorce and the financial issues faced, do not hesitate to contact bc@calibrate-law.com. Ben Castle is a Senior Associate at Calibrate Law.

This post is intended to be a brief note for clients and other interested parties. The information is believed to be correct at the date of publication but should not be relied upon as a substitute for professional advice.

 

Back to insights

Search anything

Back