Variation of spousal periodical payments

Divorce Finance Toolkit

I received an interesting query from a gentleman who is paying periodical payments to his ex-wife following his divorce but has found the downturn in the economy has really impacted upon his ability to sustain the payments.

Tom (not his real name) had come across my blog and then asked:

I was divorced from my wife following 40 years of marriage. I am a ******** working broadly within the commercial/business industry but these days only for a group of small companies directly or indirectly involved in property. Since the valuation of my assets took place pre – recession in late 2006 I have seen an unrelenting reduction in the value of any business interests I still have. I am currently retained on a contract expiring no later than May next year, following which I will be 66 with no realistic chance of securing appropriate work. My ex secured the vast majority of whatever capital wealth I had as well as very substantial maintenance payments in perpetuity on the assumption the economy would continue to grow, which patently it hasn’t!. My gross income will have dimished to the point where I have my state pension & a small private pension all of which is totally swallowed up by the maintenance, rendering me insolvent. I believe I need to secure a discharge of the maintenance order due to changed circumstances by reference to Section 32 of the Matrimonial Causes Act. Do you agree? Suffice to say there are many other liablities which would also weigh in the balance, I believe.

Tom was clearly in a very difficult position.  My response was as follows:

I sympathise with your situation.  The effects of the recession can fall unfairly on one party after a divorce and final order dealing with finances.  Certain capital assets have fallen significantly in value, sometimes just days after the court have made a capital order.  However, recent cases have shown that the court will not revisit the capital element of an order (in effect allowing an appeal out of time) even in extreme examples of capital values falling off a cliff.

I think, from what you say, that your ex-wife has a joint lives maintenance order.  That can be discharged altogether, varied upwards or downwards, or even capitalised to provide a final clean break, under section 31 of the MCA 1973.  You refer to section 32, which provides that enforcement of arrears of maintenance cannot be pursued without the leave of the court.

If your income situation has worsened to the extent that you are really struggling to pay the spousal maintenance then I would consider contacting your ex-wife to explain the difficulties and suggest that you both attend mediation to address the difficulty and hopefully agree a reduced amount of maintenance.  If you are shortly to be reliant upon pension income alone, depressing your income further, it may be appropriate to seek a complete discharge of the maintenance or even to convert to a nominal maintenance order of 5p per annum (it still remains an order that could be varied upwards if your circumstances changed for the better) but you would not effectively pay any maintnenance under a nominal order.

I do not know what your ex-wife’s pension position is and whether you also dealt with a pension split prior to the divorce.  But it sounds as if this will be a straightforward comparison of your income, your ex-wife’s income, including her maintenance, and a discussion as to whether she can reduce the maintenance and adjust to that new level without undue hardship.  The liabilities situation for both of you will be relevant.  The court’s discretion as to the circumstances it can take into account are virtually unfettered and can include, by way of example, an ex-wife’s cohabitation with a new partner.

I take it that there are no deferred lump sum payments by instalments or pension attachment lump sum orders not due to take effect until after your retirement, as otherwise, the court does have power under section 31 to consider a variation of these deferred capital orders as well as the income orders like maintenance.

A variation of maintenance can be very expensive in legal fees for very little benefit so I really would urge you to attempt mediation with your ex-wife.  If she does not agree then you may have to get initial legal advice but then consider applying to court yourself to try to vary the maintenance order.  Just check to see if your income is such that you may be eligible for legal aid.

Otherwise, check your domestic insurance to see if you are covered for legal advice assistance, or covered through the terms of any professional memberships.

I am grateful to Tom for allowing me to publish his query and my reply.  As I pointed out to Tom, my response could not in any way constitute legal advice – he really needed to obtain his own legal guidance.  But, for others who might find themselves in a similar position to Tom, I can only urge that any attempt to vary spousal periodical payments is tacked by a civilised discussion, aided if necessary by the assistance of a mediator. Unless the amount of the spousal periodical payments is very significant, the costs of the legal fees fighting a variation through the courts is very likely to be disproportionate.

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