How to vary a divorce maintenance order through the RPI

Life has been very busy at Divorce FT Towers but, while I wait for the kettle to boil, I’ll pop out this post on the variation of maintenance. I’d promised this some time ago, prompted by the number of people I had come across who had never varied their maintenance orders because they did not know how.  This is their lawyers’ fault of course, because they should have been given some guidance on how to do this at the end of their cases.

Now the first thing to point out is that the wording divorce lawyers use to set out the mechanism to vary a maintenance payment is something like a cross between ancient Greek and Klingon.  It will read something like this:

On ‘the variation date’ which shall be on the date of the payment due in November 2011 and at yearly intervals afterwards, the periodical payments set out in Paragraph 4 [imagine spousal periodical payments] of this order shall stand varied automatically.  The change in the payments shall be the percentage increase, if any between the retail prices index  for August 2010 [15 months  before the date of the first variation} which stands at 224.5 and the retail prices index for the month three months before the variation date.

Got that?  No?  Don’t worry, you’re in good company.  Let’s try and decipher this gobbledegook.

Here are the simple steps:

  1. The spousal periodical payments order  in the example above is to be varied on 25 November 2011.  This will be 12 months after it was directed to start by the court.   What you will be doing is obtaining the Retail Prices Index (RPI) figure for the period 15 months before the anniversary in November 2011.  This figure will be for August 2010 and we can see that the RPI for that date is 224.5.
  2. So, how did I know the RPI figure for August 2010?  Easy, I looked at data on the RPI kept by the Office of National Statistics.  Alternatively, you can contact them by email on [email protected]
  3. What you then need to do is to ascertain the RPI figure for the month which will fall three months before the anniversary date in November 2011.  I can tell you the month that you will need is August 2011.  I cannot tell you the RPI figure for August because it will not be published until around October of 2011.

However, I could give you an example of how to work out the increase as follows:

  • The figure that is going to be varied in this example will be the sum of £112.00 per month.

 

  • The figure of £112.00 is multiplied by the RPI figure for August 2011 (that will not be published until around October 2011).  For the purpose of this example, let us speculate that the figure for August 2011 will turn out to be 240.0.

 

  • £112.00 x 240.0 is £26,880.  If you then take the sum of £26,880.0 and divide it by the RPI for August 2010 (which is 224.5) the result is £120.00 (rounded up).

 

  • So the Payer of the maintenance in this example, presently paying £112.00 per month, will have the payments increased to £120.00 commencing with the payment in November 2011.  You would then apply the same variation formula to the new sum of £120.00 in November 2012, and so on each year.

Phew.  It does make sense, if you follow it through carefully.   The kettle has boiled. Time for tea.

 

 

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  1. jhurley’s avatar

    Wow at last! a clear example of how to vary periodical payments. The wording of my court order is identical to the example given so halleujah! at last it makes sense.

    Thank you

    Reply

  2. Kim de Mornay’s avatar

    Help…

    Not sure I get it… Still!

    Ok.. My partner has been paying £26,000 per year to his ex wife, since July 2007. He has chosen never to claim his 4/10ths in reduction to that amount, for the time that he has the children, but has received a letter today from her solicitor demanding £88,000, as he has never increased payments to her in line with RPI. Surely this isn’t correct? I am reaching for the valium!

    Kind regards,

    Kim

    Reply

  3. DivorceFT’s avatar

    Hi Kim,

    You can put down the valium. That seems like one hell of an increase. I don’t think anyone responds well to a letter, demanding anything. If I were your partner, I would write back and politely ask for an explanation of how the increased sum has been calculated. The calculation should set out the original sum of maintenance (I’m guessing child maintenance since you refer to the 4/10th reduction) and how the RPI uplift has been calculated on each annual variation date. If your partner has been paying £26,000 a year but without each successive annual uplift then ‘arrears’ will have accrued.

    But: you need the court’s permission to claim arrears greater than 12 months old which may be worth pointing out to the lawyers. And, your partner should calculate what he would pay if this matter were being dealt with by the CSA. If it is going to be significantly less, then your partner may refer himself to the CSA and the original family court child maintenance order will fall by the wayside (including, I suspect, any arrears). There are always exceptions to the general rules I have laid out here so it is worth your partner getting legal advice, but I would be inclined to ask for the maths behind the ‘demand’ first.

    Reply

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