Maintenance and Inflation 25th, February , 2022

maintenance inflation

In Scotland financial provision has tended to focus more on division of assets rather than calculating maintenance for spouses.

While there is statutory provision for maintenance for children through the CMS (Child Maintenance Service) there is no formula for spousal maintenance and there is a strong emphasis on the receiving spouse only being paid for a period of time necessary to allow the spouse to adjust to their new circumstances.

There is no automatic right to spousal maintenance. If the spouse in receipt does not manage to adjust after the period of the court order for maintenance the payment of maintenance will stop with the consequent decrease in their standard of living. There are various exceptions to cover extreme circumstances for example ill health but in the main three years after divorce all maintenance obligations between spouses disappear.

While the principle of encouraging the spouse in receipt of maintenance can be understood in some cases a return to work or an increase in working hours may simply not be possible especially if the recipient has a young family.

Other countries are more generous in relation to spousal maintenance. In England there is no such time limit. Maintenance can be awarded for far longer periods of time and generally speaking the amount of the awards are higher.

In Scotland, when quantifying the amount of maintenance to be paid, the thinking seems to be that, in the first instance the income, if any, of the recipient is taken into consideration and then whether or not any child maintenance is received. Any benefits received will also be taken into account. The last part of the calculation is whether, bearing in mind the total income and all costs there needs to be a payment to cover any shortfall and that shortfall would be met by spousal maintenance paid for a restricted period of time.

The amount of spousal maintenance is more a function of the needs of the recipient rather than ability of the payer to afford the payment although obviously that is an important factor.

If this seems harsh in certain circumstances it is harsh and other jurisdictions, England for example, look at maintenance in a different way which is far more generous to the receiving spouse.

Scottish Family Lawyers have thought for a long time that while the principle of trying to encourage financial independence is laudable, in practice it often leads to real inequity.

It may be that recent events will turn attention to the adequacy of spousal maintenance payments and how long they are paid for.

For many years inflation has been very low. Now there are several reasons why inflation is starting to soar. Although the Bank of England, who manage inflation, have a target of 2%, the current rate is over 5% and there are forecasts that inflation will rise to 7% or possibly even 8%.

The pandemic and the problems with gas supply have been the main factors although the war in Ukraine is likely to make matters worse.

There are two aspects of this for the client and their family lawyer to think about.

In the first place family lawyers should encourage their clients to prepare detailed schedules of all their outgoings taking into consideration the recent rises in costs.

In negotiations far more emphasis should be placed on quantifying ongoing monthly payments and if agreement cannot be reached court action may be required to obtain a fair order for maintenance. This should be done at the beginning of the case, not the end.

In the second place, if inflation starts increasing over 5% then family lawyers should consider advising their clients who are already receiving maintenance to ask the other side, or the courts, for an increase in the amount that is currently being paid.

There is the question about whether an increase of 5% or even 8% would be regarded as a material change in circumstances justifying an increase but it is submitted that it would particularly if the increase in inflation meant that the recipient could no longer pay the bills.

So if clients, who have separated, are worried about how they are going to cope with spiralling costs, they should contact one of the experienced, accredited, family lawyers at Rooney Family law for expert advice.

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