Variation maintenance

You are currently browsing the archive for the Variation maintenance category.

Maintenance increase by the RPI

January 9, 2013 in spousal maintenance, Variation maintenance by Alan Larkin | No comments

Many a mickle makes a muckle (so long as you don’t ignore inflation)

If you have done the hard work of agreeing maintenance upon divorce and have sensibly put in place a mechanism to automatically increase the payment each year by the rate of inflation, then pat yourself on the back.  You’ve done all you can to avoid having a huge row with your ex each year about the amount of any annual maintenance increase and the prospect of an expensive return to the family court to argue the toss in front of a judge.

But, as I have discovered from my virtual postbag over the last two years, the scope for argument and misunderstanding still exists.  I have just heard from Lianne:

I wonder if you would please help solve an issue between my ex-husband and myself.

I am due to receive an annual RPI increase from 1.1.13. (date stated in my Court Order).

I receive my monthly maintenance payments on the 16th of each month.
Can you please clarify which months RPI figure is the one that should be used? My ex is saying that it should be the one for Sept. 2012 as the Court date is the first of the month.

My view is that it should be the figure for Oct. 2012 regardless of whether the increase is for 1st or the 16th of the month, as it is the actual month that is the deciding factor not the date of the month.

Thank you for your time and attention.

Well, I’m with Lianne on this one.  The normal mechanism is to use the RPI figure for the month three months before the month in which the maintenance is to be increased.  So that would be October.   For any visitors of the blog for which that sentence reads like gobbledegook, you will have to read the other posts and comments on this subject using the RPI tag in the Cloud Tag on the left hand side of the page.  The important thing to note is that the increase in maintenance is based on the increase in inflation in the preceding (or as near as dammit) 12 months.  There is always a lag before the Office for National Statistics can calculate each month’s RPI figure and then release it to the public.   So it is common to take a figure three months prior to when the increase is due because the RPI figure should be in the public domain by then.

If anyone wants to work out how to calculate an RPI increase then look no further.

Tags: , , ,

Child support: arrears of maintenance

November 27, 2012 in child maintenance, spousal maintenance, Variation maintenance by Alan Larkin | No comments

I have visited the topic of child support on many occasions. My virtual postbag this week has several examples of one common scenario: where the husband and wife start off by getting it very right, with an appropriate order for child maintenance upon divorce, but then, somehow, it goes very wrong.  The sad thing is, it goes wrong, very often, because of a basic misunderstanding. Most of this should be avoidable.

To the postbag…

Suzanne writes:

 

I have a court order (payable by standing order monthly) which has been running for 8 years. After the first year my ex husband refused to pay the yearly increase, and has been paying the same amount ever since. I have now requested that he increases the maintenance but he still refuses to do this.  Can you please advise what the yearly increase should be as I have no alternative but to take this back to court.
Also will he have to pay the arrears?

I have re-married two years ago, would this affect the payments?

Child maintenance

Suzanne later confirmed to me that this is a case of child maintenance.  In which case, Suzanne’s re-marriage is of no consequence whatsoever.  The child maintenance must be paid in accordance with the terms of the court’s order.  It is a great pity that the ex-husband has failed to observe the increases each year ordered by the court.  In the first place, the order for child maintenance would only have been in a court order if the husband agreed to the family court having jurisdiction for dealing with child maintenance (instead of the CSA).  Secondly, he would have agreed to the yearly increases (normally by reference to inflation measures like the Retail Prices Index) as he must have recognised that the cost of living – especially in relation to kids – only goes up and never down.  So his refusal to honour the increases he agreed is disappointing.  As I have commented before, the costs of bringing up children is usually underestimated.

Suzanne has asked me what the yearly increase should be.  Unfortunately, I cannot calculate that without knowing the amount of the original award, the date it was awarded and the mechanism used in the court order to determine the yearly increase.  But, I have laid out in previous posts how to calculate the yearly increase and also how to calculate the amount of arrears that have arisen when the yearly increase is ignored.  Click on “RPI” in the Tag Cloud on the left hand side of the web page: this will bring up all my previous posts on this issue. 

One issue here, if this is a child maintenance order, is that in the case of a disagreement over the amount of child maintenance, the family court responsibility comes to an end and the parents will have to look to the CSA.  The usual scenario is that one parent wants to receive more or one parent wants to pay less.  This would require a variation of the original order for child maintenance and this variation must also be by agreement.  But, in Suzanne’s case, she is not talking about changing the amount of the original order but rather simply requiring that her ex pays the yearly increases he promised. Suzanne, if she gets legal advice, may be told to apply back to the court to enforce the payment of the arrears.  But you have to get the court’s permission to recover more than the last 12 months of arrears.  The application is made on Form D11 (Family Procedure Rules, 2010, Part 18).  Suzanne would need to set out her calculation of how those arrears had arisen.  This is not that easy but look at my previous posts in the Tag Cloud for “RPI” and “Child Maintenance”.

The alternative for Suzanne if she wanted, would be to refer her ex-husband to the CSA so they could carry out a fresh assessment of the amount of child maintenance to be paid.  The CSA would not be able to recover the arrears for Suzanne under the court order but I suspect the ex-husband would end up paying more towards his child or children under a CSA assessment than under the court order which is now 8 years old and has not been increased each year.  The CSA may refuse to act though if Suzanne’s child or children are too close to the age of 17 (when CSA responsibility comes to an end).  I don’t have enough detail here to make any further comment.

So, if Suzanne took legal advice, it may well be that she should apply to the court to enforce the arrears.  Remember, that her ex could refer himself to the CSA and if they took responsibility for the situation then the family court order dealing with child maintenance comes to an end, and with it, any prospect of recovering any arrears.  So Suzanne may want to get her application into the court for enforcement first, and recover as much of the arrears as possible.  Since her ex will then have to disclose his present income in those proceedings, she can ask her legal advisers to calculate how much he would pay if the CSA were involved. She can then take advice upon whether to refer the child maintenance to the CSA from that point onwards if the award would be higher than she presently receives under the family court order.

Tags: , , , ,

Divorce calculator: Journey Costs

October 26, 2012 in child maintenance, Form E, spousal maintenance, Variation maintenance by Alan Larkin | No comments

Journey cost calculator for Divorce Finance Toolkit

I like calculators. They are really useful when you’ve run out of fingers to count on.

This is a journey cost calculator. In many divorce and separation cases the earned income has to stretch a long way. Here are a few scenarios where this calculator may prove useful:

    1. If you are divorcing and making a financial claim you will probably have to complete a financial disclosure questionnaire called a Form E. It asks for all sorts of information on people’s finances and one of the sections in particular is called income needs. Invariably, at first attempt, many people underestimate their true levels of expenditure. This calculator can help to focus on the true cost of the mileage that may be clocked up in getting to work.
    2. Or, you are negotiating with your ex over the amount of spousal maintenance or child maintenance that should be paid. One of you may require a car to get to work. That wage may be providing for maintenance payments. The cost of getting to and from work can be significant with the cost of fuel at the moment. This calculator may help to show just how much is being spent. This unavoidable cost could be factored into the discussions.
    3. Or a level of maintenance has been agreed and in place for a number of years but the paying or receiving party has a change of circumstances involving more motor travel, perhaps in relation to a work relocation. So the calculator could assist in showing why the change of circumstances means an adjustment in maintenance is required.
    4. Another scenario is where contact to children is being discussed. One of the parents may have to do a fair bit of mileage over time picking up or dropping off the kids for contact. It is a cost that could demonstrate why the parent paying maintenance will struggle unless this essential expenditure is taken into account. Or, for instance, if it is a mother working part-time and doing most of the motoring around to allow contact, why the maintenance she is receiving may need to have an element in it to cover this cost of travelling.

Ideally, I wish I could find a calculator that would allow road, tax, servicing and insurance to be incorporated but no luck so far.

Tags: , , , , ,

Wives to be short-changed on bankruptcy?

October 23, 2012 in Variation maintenance by Alan Larkin | No comments

There is a very interesting case in the High Court at the moment.  It involves the difficult relationship between the family court jurisdiction and the civil jurisdiction, specifically how the court deals with insolvency or bankrupty claims following a divorce.  A former company director, is asking the court to agree that his bankruptcy should release him from any obligation to pay his ex-wife the unpaid balance of a lump sum she was awarded in their divorce.

The ex-husband, Alexander McRoberts, agreed, amongst other provisions, to pay his ex-wife a lump sum of over £500,000.  The sum was payable in instalments. But, as can often happen with elements of a court order that have an on-going nature, a subsequent event some three years later has upset the applecart. In this case the event is in the form of Mr McRoberts’ bankruptcy, and this has led him to ask the court to write off the debt.  The problem, from Mrs McRoberts’ point of view, is that she is still owed £394,000 and she would like the orginal order, granted in the family court, to be honoured, thank you very much.

Generally speaking, the lump sum order to Mrs McRoberts survives her husband’s bankrupty – indeed, the news reports indicate she was a creditor in his bankrupt estate.  The judge in this case has reserved judgment and there will be many family lawyers awaiting this particular decision. The concern for ex-wives, awarded lump sums in this fashion, is that the award by a family court can then be dumped (potentially) by the husband later becoming bankrupt.  This is a case that could open the floodgates to many other applications by insolvent ex-husbands seeking to be released in the same fashion.  Should the court grant Mr McRoberts his wish, I anticipate that other ex-wives facing similar petitions for bankruptcy by their divorced husbands in the future will be resisting at all costs if they smell a financial rat.

Watch this space.

Tags: ,

Child support: excluding the CSA

May 26, 2012 in child maintenance, Self-Representation, Variation maintenance by Alan Larkin | 1 comment

Child support: excluding the CSA

Full of cheer? The Christmas Order

Self-represenatation in family proceedings is difficult.  Many litigants in person, or ‘self-reppers’ find it hard to fund legal advice from a family specialist.  This is particularly so where the only dispute may be about an income claim such as child support because it is not as if you may recover a valuable asset or receive a lump sum out of which you can repay your legal fees at a later date.

When faced with a self-repper, a family solicitor (who, we must remember is an officer of the court) should try to assist the litigant in person to understand the process or the proposal being made.  This is not to say, that the solicitor must advise the self-repper: they cannot do that as it would be a conflict of interest with their role as an advisor to their own client.

I have a great deal of sympathy for self-reppers, as may be evident for any regular readers of this blog.  When facing them in court I go out of my way to be courteous and helpful, mindful always of the stressful nature of the proceedings in which we are all involved.  I have sometimes had self-reppers throw doubt upon my parentage, but I don’t mind as I know, in most cases, it is just the pressure of the situation getting to them.

Unfortunately, this pressure of the occasion at court can cloud the judgment or even hinder the understanding of self-reppers.  This is presuming of course, that the lawyer on the other side of the self-repper and the judge have sufficiently explained the situation to the self-repper.  This is the subject of a recent enquiry from a ‘troubled mum’:

My son settled in court to pay a woman he had a one night stand with £750.00 per month. This was at a stage 2 meeting. My son had to represent himself because he could not afford the legal fees. The barrister representing the applicant explained the order was a “christmas Order” which meant it could be looked at again if my son were to win the lottery or found himself without a job ( I was there I heard the barrister say this) We now have received a typed up copy of the court order that we agreed on the 3rd May to let a legal person look at it. We have been informed the words “Christmas Order” means it automatically goes up each year which we were definately not informed that this was the case. Can we ask the court to take out that clause because we were informed wrongly of its meaning please help this is a nightmare regards very troubled mum

As ever, with many of the enquiries I receive, I do not have all of the detail but my initial thoughts are as follows:

  • I wonder why this matter was not dealt with by the CSA.  The child’s mother could simply have referred the case to the CSA to make a maintenance assessment and fix the amount of child support.  No need for her to pay for a barrister (unless she had public funding – or legal aid).
  • Since the CSA were not involved I am presuming the case before the family court was under Schedule 1 of the Children Act 1989 which can provide for financial orders between unmarried parents for the benefit of their biological child.  Such orders usually being:
    • Periodical payments (or child support)
    • lump sum orders (there can be more than one)
    • a property adjustment order (the provision of a house for the child and mother to live in) although the property will in most cases revert back to the father when the child reaches the age of majority.
  • If this case was being brought under Schedule I Children Act proceedings, then the father in this case could have referred himself to the CSA and the family court would no longer have the ability to make a periodical payments order.  The family court could still have made a lump sum order or a property adjustment order but whether the father had the financial means to meet such orders is not mentioned in the enquiry.  I suspect not.
  • The father has agreed (remember that the family court can only approve a child support order if it is with the consent of both parents) to a ‘Christmas Order’.  I have used such orders before but from memory I have only done so when my client’s spouse or partner has had legal representation.  This is because the Christmas Order attempts to oust the jurisdiction of the CSA (which, technically speaking, is against public policy).  Readers of this blog may remember that a court-approved child support order may only have a shelf life of just over 12 months because either parent can then refer the case to the CSA to take over and the family court order bites the dust.  A ‘Christmas Order’ is designed to automatically renew itself just before the 12 month period lapses so it is as if a new order is born out of the ashes of the preceding order each year.  Because the order never quite gets to be one year old before being renewed each year the CSA never gets to have jurisdiction.  The month of automatic renewal is usually December: hence the Christmas connection.   Clever. Unless you did not understand what you were signing up to.
  • A Christmas Order can be quite helpful in some circumstances but, as I mentioned earlier, I am troubled if the father of this child did not have a clear understanding of what he was agreeing to.  Without his consent this order could not have been made. Even if the barrister had not explained it clearly enough, I would have thought the judge, who approved the order, would have explained very clearly to the father what the Christmas Order entailed.  After, all it is an unusual order so the burden upon the barrister and the judge to assist the self-repper in this case is, in my view, even higher than normal.
  • The ‘troubled mum’ behind this enquiry and her son then consulted a ‘legal person’  with the result being: “We have been informed the words “Christmas Order” means it automatically goes up each year”.  That’s not right.  The Christmas Order operates as I have explained above: it automatically renews itself each year in such a way as to prevent the CSA having jurisdiction.  It would only go up in value each year if there was a specific clause saying that it will increase in value.  The normal mechanism for this to happen is to link the child support payments to the increase in the Retail Prices Index (RPI).  I have tried to explain how this operates in a number of posts on this blog. Again, I am troubled if the father in this case did not know he was agreeing to an automatic increase in the value of the payments each year.  Don’t get me wrong, I think such automatic increases can be a good thing but it is essential that all the parties (especially self-reppers) understand what they are agreeing to.)

Although I must reiterate again that I cannot advise anybody on the pages of this blog, one option open to the father is an appeal against the court order.  It will be an appeal against a consent order which makes it difficult to say the least but it may be worth a try if the father is certain that the order was not explained to him by the judge and that if it had been explained to him, he would not have agreed to it. The guidance for making such an appeal is here.  However, the usual time period for making such an appeal is 21 days from the date of the order so that time period has already passed.  It is, however, still possible to make the application to appeal (out of time) and the father may be given more leeway because he is unrepresented.

BUT: remember that such an order is variable.  That is, if there is a significant change in the father’s circumstances such as the loss of a job or a significant pay cut then it is possible to have the amount of the maintenance varied downwards on an application back to the family court.  At the same time the court could be asked to simply drop the automatic renewal (the Christmas Order) aspect of the child support so that it could, if either parent wanted to, fall back within the jurisdiction of the CSA in the future.

My inclination, if this father needed to vary the order in the future, would be to invite the mother of this child to mediation.  Much less stressful than contested proceedings.

Tags: , , , , ,

Arrears of maintenance following divorce

March 19, 2012 in child maintenance, Enforcement, spousal maintenance, Variation maintenance by Alan Larkin | No comments

Many a mickle makes a muckle

Spousal maintenance issues following divorce continue to dominate my post bag.  In particular: the automatic variation of maintenance following a divorce financial order by reference to the RPI.

What has been genuinely illuminating to me as a family law specialist is the extent to which there is boundless room for confusion over the interpretation of a maintenance order, whether spousal or child support.

This week’s postbag:

John (not his real name) had read some of my blog posts and then asked:

Re: Variation of Maintenance agreement. Could you clarify how it works for second and subsequent years.  My ex-wife and I disagree. She says that the shortfall is cumulative. [further details omitted to avoid personal identification]
The details provided by John made it clear that he had been paying the maintenance ordered by the court but, for whatever reason, the link to the RPI which was intended to increase the amount of the maintenance each year, had gone by the wayside. So, the sum of maintenance approved by the court in the original order has not been increased, as was intended by the order, for three years.  John and his ex cannot agree  how the shortfall created in the past is calculated or applied so they can get back on track.

The solution

I suggest the art of the practical.  Strictly speaking, the non-payment of the inflation-linked increase each year constitutes arrears.  For example, let’s say the original sum ordered by the court is £1800 per annum.  At the first year anniversary the application of the RPI link, if it is applied, would have increased the original sum.  Let’s imagine it is by £150 per annum.  So the second year sum of maintenance is £1950 per annum.  Upon the second year anniversary let’s imagine the RPI increase is £250 per annum.  The increased sum paid is therefore £1950 plus £250 = £2,200.  Continuing on this path, the third anniversary is (let’s say) an increase of £400.  That is, £2,200 plus £400 = £2,600.

I have laid out below how the missed RPI increase every 12 months would accrue  following an original order for maintenance.

So, by month 48 the arrears would be £1350.  This needs to be paid by John to bring the maintenance up to date.  If John refused, his ex could apply to the court to enforce the non-payment and ask the court to fix the payments at the correct level for month 48.   However, where there are arrears that are more than 12 months old, John’s ex would need to ask the court for permission to recover these older arrears.  John may ask the judge to remit (waive) the arrears older than 12 months.

In reality, the legal costs of going back to court would be prohibitive if there is no access to legal aid, and it would be stressful.  Better, surely, to fix the correct amount at month 48 so it is at the right level going forward and prevents any further arrears building up.  Then, the older arrears could be paid in a series of lump sums over the next year or 18 months.  So, divide the arrears by 12 or 18 and add on to the present monthly payments of maintenance.

Remember, if John and his ex are finding it hard to negotiate the precise way to get themselves back on track, they could consider a mediation session to help them get it sorted.  One session should do it.

Tags: , , , ,

Child support and maintenance after divorce

March 16, 2012 in child maintenance, Enforcement, spousal maintenance, Variation maintenance by Alan Larkin | No comments

Who knows what the future holds?

My postbag continues to bulge with divorce enquiries focussing on child support issues and spousal maintenance.  The conclusion of a divorce does not, of course, mean the end of disputes or problems over child maintenance or the intepretation of family law court orders. Here is my most recent query:

Following a very messy and financially costly divorce, a court order was made that included a RPI increase at the insistance of the petitioner. The only alternative I had was to go througth a full court procedure which could have significantly increased the fees that at that point were spiralling out of control. The date of this increase is in effect from 20012 (this is the actual date on the court paper). My ex wife has not ‘reminded’ me about this probably because she is still being persued by her solicitor for the oustanding fees that she ran up during the divorce-since the divorce she has instructed other solicitors in an attempt to entangle me in more nonsense which I refuse to engage in. I normally direct the new solicitor to the original one where the fees remain oustanding and this tends to silence the correspondence for a while until a new instruction is generated.

I have and will pay the monthly child maintenance fees until my child reaches the age of 18 or until she leaves full time education as stipulated in the court order. It was my ex-wifes solicitor who drew up the order and maintenance payments will cease approximately 2018 but as stated the increase id documented as 20012-what are my options?

To begin with, I’m not sure whether the order referred to above contained spousal maintenance and child support (maintenance) or just child maintenance and this attracts the RPI increase.  But, no matter, since the principles remain the same for either order (with one exception I’ll return to below).

    • the order is made against the payor so it is enforceable in case of default.  I consider that this includes any failure to comply with an RPI increase ordered by the court (even if it was by consent).
    • the purpose of the order is two fold – an automatic increase in the maintenance each year prevents it losing its true value over a period of years and it makes it unncecessary for the parties to have to apply back to the court for a variation (at significant legal cost) in the amount being paid.

Your options

Carry on as you are. 

    1. But you know the increase is due and the defecit will build up.  You may (eventually) receive a solicitor’s letter asking for payment at the new level (and threatening enforcement).  If you ignore it and an application for enforcement is made, be very careful as you could end up on the wrong side of a costs order.  Especially if a judge decides it is not a case of ‘can’t pay’ but ‘won’t pay’.
    2. The application back to court could be for a variation of the amount of maintenance as well as enforcement.  Your ex may think you could afford to pay more and ask for the increased amount to be index linked as well.  If this happened you are entitled to ask the court to decrease the amount and it will be a question of fact as to whether the judge thinks the original amount under the order should go up or down, or remain the same.  It is possible for an attachment of earnings order to be made at the same time (if you are not self-employed) as a way of ensuring that the right amount is paid each month going forward.
    3. If, by the time your ex made an application to the court to enforce or vary, your arrears were more than 12 months old, your ex would have to ask permission from the court to recover any arrears older than 12 months.

Apply back to court yourself

If you are struggling to pay the original amount you could apply back to the court yourself to vary the amount downwards and ask the court to ‘remit’ (waive) any arrears that may have built up.

Or, just pay the new amount

You could calculate the increase in the maintenance , start paying it and have a quiet life.

I mentioned an exception above.  This is where the order is for child support/ maintenance.  This would only be in existence if you and your ex agreed to the order.  In the absence of agreement, the family court has no jurisdiction in child maintenance issues (with some further exceptions, I won’t mention here!).  In the absence of agreement, the CSA will deal.  It is possible for either party to an agreed child maintenance order in the family court to wait, to all intents and purposes, a period of 15 months from the date of the original order and then ask the CSA to take over so the family court will no longer deal with the child maintenance element.

Tags: , , , , , ,

RPI variation of spousal maintenance in successive years

February 24, 2012 in child maintenance, spousal maintenance, Variation maintenance by Alan Larkin | No comments

German children playing with Reichsmarks rendered worthless by inflation

I tried my very best fairly recently to explain what a maintenance order looked like. I also explained that it could be protected against inflation by a link to the Retail Prices Index.  I even tried to show how such an order could be varied, relatively simply, by the parties themselves.  I was so eager to please, I even produced a sample letter that could be sent to the ex-spouse to explain what was required so all confusion and ex-marital strife could melt away. 

I then received the following enquiry: 

I have just read your article on RPI and periodical payments (spousal maintenance). It was very helpful. However, what would be very helpful is clarification on the 2nd year and subsequent years. I have the PP’s linked to RPI (at my request) and my divorce went through on *****. The wording was nigh on identical to what is in your article, and others I have read. However, confusion is this: The first year was easy to work out. The initial payment upon divorce was £250 pcm. The following year, Feb 2011, and the payments increased to £261.77. This is where the arguments have started: My ex husband says that when working out THIS year, 2012, that he again uses the figure of £250.00 and NOT the last figure of £261.77. I dont agree. As when the economy picks up, I could see one year in the future getting LESS than I do this year, ie LESS that £261.77. Please can you clarify if, the STARTING figure on each variation date is the initial award figure (£250) or the INCREASED figure from the previous year?
Well, the right answer is that the starting figure on each variation anniversary is the increased figure from the previous year.  in other words, the amount keeps going up each year so as to protect the real value of the payment from the constant increase in the price of living caused by inflation.
Over and out.  For now.

Tags: , , ,

Variation of spousal periodical payments

December 13, 2011 in Alternatives to Court, spousal maintenance, Variation maintenance by Alan Larkin | No comments

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.

Tags: , ,

Maintenance on divorce: RPI… RIP?

December 2, 2011 in child maintenance, Pensions, spousal maintenance, Variation maintenance by Alan Larkin | No comments

RPI/CPI Comparison 2009 to 2011

Divorce maintenance payments: CPI or RPI

I have written before about whether maintenance payments for spouses and child support on divorce should be inflation-proofed by automatically increasing their value by any rise in the Retail Prices Index (RPI).  I pondered whether such a link could be made instead to the lower figure of the Consumer Prices Index (CPI).  I noted the Government’s quiet adoption of the CPI for the payment of benefits as a way of saving money in real terms.

Divorce solicitors will usually seek to protect the value of their client’s maintenance payments by linking future increases to the RPI.  However, the mass strike by public servants on 30th November this year (in part because their pensions are now subject to the lower CPI link) demonstrates that these policy decisions matter.  Likewise, a client who is awarded maintenance linked to the CPI over 15 years is going to be significantly disadvantaged in comparison to the client whose payments are linked to the RPI.

Rise of the CPI?

Surely this just means that solicitors should demand that the link is to the RPI?   After all, that’s the way it’s  always been, isn’t it?  So, it must be set in stone?  Perhaps no longer. The High Court today decided, in the face of a legal challenge by trade unions, that the Government’s linking of public sector pensions to the lower CPI figure was lawful.  Lord Justice Elias stated, in his judgement:

“The use of RPI has in the past been merely current practice.  Looked at objectively it could not properly be asserted therefore that any promise of its continued use had to be assumed”.

Personally, my view is that a link to the RPI for maintenance payments would still be appropriate since this is an inflation measure that includes the cost of housing (which the CPI excludes).  I cannot imagine many clients thanking their solicitors for securing a link to the ‘poor cousin’ CPI inflation measure.  But, as Lord Justice Elias demonstrated today, in these more economically austere times,  old assumptions may no longer hold true.

 

Tags: , , , ,

« Older entries