Variation maintenance

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Fairness, like beauty, is in the eye of the beholder.  Both were in short supply on the occasion I represented a client at a Financial Dispute Resolution (FDR) hearing in an outer London county court whose architect had taken to heart the brutalist aesthetic of the early 1970’s.  My client had divorced his wife some 10 years previously and had been paying her maintenance ever since.  In the original court hearing my client had claimed that his wife was in a relationship of cohabitation with her new partner.  The wife vehemently denied this, my client’s lawyers had said it was a kite that would barely fly and so the case settled on the first day of the trial.

Fast forward to my involvement after the husband discovers that his ex-wife is shacked up with another man and they were happily settled in another jurisdiction.  My client didn’t care in the slightest about the relationship in itself but further investigation revealed that, surprise, surprise, the new man was in fact the same man about whom the husband had harboured suspicions a decade earlier. This new man was working.  Why, therefore, my client asked, should he carry on paying maintenance for his ex-wife when this spousal maintenance was directly contributing to the living standards of a man quite capable of earning his own living?

This was a case in which the children were grown up and quite independent of the former spouses.

My attempts to invite voluntary financial disclosure from the ex-wife with a view to negotiating a cessation or downwards variation of maintenance met with little success.  My client therefore had to issue variation proceedings (Matrimonial Causes Act, 1973, section 31) asking the court to either terminate his spousal maintenance payments or at least to reduce them.

The ex-wife made two attempts at producing her Form E but the contents were evasive to say the least. Eventually, I was able to obtain an admission that she had cohabited with her new partner for the past seven years.  It was clear that she had gone to considerable lengths to conceal the fact of the co-habitation from my client.  Legally, there was no reason for her to do so as the original court order from ten years ago, awarding her spousal maintenance, had not stipulated that the payments should end or be reduced in the event of her cohabitation with a new partner.

The proceedings were settled at the FDR with the wife agreeing a reduction in her spousal maintenance.  The judge, whose role at the FDR is to assist the parties to reach compromise and avoid the lottery and costs of a trial, was not required to reach any conclusions (what lawyers would call a finding of fact) about whether the former wife had deliberately attempted to conceal her co-habitation from my client, or whether she had attempted to mislead me, my client and the court by filing inadequate Forms E before making a late admission that she had, indeed, been cohabiting.  The judge was unwilling to comment adversely upon these matters and criticise the wife.  My client was not willing to incur the further expense of going to trial so that is why a deal was struck.

I had to explain to my client that if his ex-wife had married her new man, then the spousal maintenance payments would end automatically.  But shacking up was different.  The English family court does not regard a relationship of cohabitation as having the same gravity as one of marriage.  So, the logic goes, my client’s obligations to his ex-wife arising out of his marriage, were of such significance that they could not be displaced by the ‘inferior’ relationship of mere cohabitation entered into by his ex-wife.  He must continue to pay maintenance, enriching the joint financial position of his former wife and her new (working) partner.

I wondered if the ex-wife would appreciate that her relationship of seven years (I suspect closer to ten years) was inferior to the relationship of marriage she had formerly enjoyed with my client.  I wondered if any cohabitees, the length and breadth of this jurisdiction, would appreciate the second-class nature of their relationships compared to their married counterparts.

Why then was the ex-wife so intent on concealing her new relationship when there was nothing in the original court order that would prevent her co-habiting and losing her spousal maintenance?  I think the answer is that she knew, instinctively, morally if you will, that it was wrong to continue receiving the maintenance when she was in a new and settled relationship.  That is why she concealed her partner.  I think this judicial attitude towards co-habitation has to change.  I consider it is out of step with how a significant proportion of the English population choose to lead their lives.   The Matrimonial Causes Act 1973 belongs to, well… 1973 and brutalist architecture.  Society has moved on since then.  Forty per cent of all children in this jurisdiction are born to unmarried couples.

I had hoped that Parliament would revisit the rights of cohabitants and in so doing, enable cohabitants to seek financial relief from each other in certain circumstances.   This would then open the way for ex-spouses to be relieved of their financial maintenance obligations when their ex was in a settled relationship of cohabitation with a new partner.  Unfortunately, the recommendations of the 2007 Law Commission Consultation Paper suggesting legal rights and remedies as between cohabitants was quietly shelved by the Government last week.  That is a spineless and neglectful decision.  Previous administrations have at least had the courage to wait until the Daily Mail ran an adverse editorial before running for the hills.  The present Government, whose earlier decision to take the axe to public funding for most family law cases, is hardly covering itself in progressive, legislative glory.

 

 

 

 

 

 

 

 

 

 

 

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I’ve been asked if there is a standard letter to remind the payer of maintenance that the first (or subsequent) anniversary of a maintenance payment order is imminent and that the payment is to be varied upwards by the Retail Prices Index (RPI).

Whilst I’m not aware of a standard letter, I’m happy to offer the following template that can be adjusted as thought fit.  This is written directly to the ex-spouse as, in most cases, the whole point of an automatic uplift by reference to the RPI is that people should be able to operate it themselves instead of going back to lawyers.

It is a good idea to have a diary reminder to write to your ex one month before the maintenance is due to be varied so there is time to agree the amount and have it set up.  I am presuming that most people will be emailing rather than sending a traditional letter.  In an effort to be helpful I have used the same assumptions for the amount of maintenance and the time periods as in my worked example for ease of reference and comparison.

Dear Ex,

I thought it would be a good idea to just remind you that my spousal maintenance payments are due to be varied on 25th November 2011.  (I have a copy of the court order if you do not have yours to hand).

I am presently receiving £112.00 a month from you.  The new maintenance amount needs to be calculated correctly and we will both want to be satisfied it is right.  

I understand that to carry out the calculation we need the RPI figure for August 2010 and that was stated in the court order to be 224.5.  We also need the RPI figure for August 2011 which is 240.0.   To obtain this I looked at data on the RPI kept by the Office of National Statistics.  I have included the link so you can check for yourself or you could contact them by email on [email protected]  

The calculation is as follows: 

    • The figure of £112.00 is multiplied by the RPI figure for August 2011.  £112.00 x 240.0 is £26,880.  If we 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, while you are presently paying £112.00 per month, the payments will need to increase to £120.00 commencing with the payment in November 2011.  
I would be grateful if you could acknowledge this email and confirm that you agree with my calculations and that the standing order will be amended in time for the November 2011 payment.
Good luck with this.  There is no reason why the same template letter/email could not be used to vary child periodical payments as the mechanism and the calculation is the same.

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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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One of my learned colleagues at Family Law Partners, a Deputy District Judge, popped his head over the top of my computer screen recently and asked me for my views on linking maintenance payments to the Consumer Prices Index (CPI).  This got me to thinking: is there an advantage for my clients to have their payments linked to the CPI instead of my favoured link, the Retail Prices Index (RPI)?  See my earlier post on why lawyers link maintenance to inflationary measures in the first place.

 After all, the Chancellor  in his  June 2010 Budget announced the Government’s intention to use the CPI for the price indexation of benefits and tax credits from April 2011.  Previously it had used the RPI.  So is there a benefit to having one’s maintenance payments  linked to the CPI?  As usual, the answer is: it depends.  The fact that the Government has linked payments it has to make (like benefits) to CPI and the payments it likes to receive (like students’ loans) gives us a clue.  Look at the following graph.

RPI/CPI Comparison 2009 to 2011

 (Source: Office for National Statistics licensed under the Open Government Licence v.1.0)

 

This shows for the last 12 month period that CPI was 4.0 per cent and RPI was higher at  5.3 per cent.

Divorce Finance Toolkit’s conclusion: if you are paying maintenance you might want to follow the Government’s lead and ask your lawyer to link to CPI (lower) and if you are receiving maintenance then you should insist upon it being RPI (higher).

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