Are you too rich to receive spousal maintenance?
Under the Family Law Act 1975, a person has a responsibility to financially assist their spouse or former de facto partner, if that person cannot meet their own reasonable expenses from their personal income or assets. The general viewpoint is that once the essential requirements are taken care of, the Court won’t do anything to order your ex to provide spousal maintenance. But is that really the case? Are you too rich to receive spousal maintenance?
The Main Question to Ask
As we set out in our longer article on spousal maintenance here, the Court considers several factors in determining whether spousal maintenance is payable and, if so, how much that might be.
Within those questions and examinations, one is particularly relevant to the question of spousal maintenance for wealthy individuals. That is: what is a standard of living that is reasonable under the circumstances?
Different families have different standards of living before any separation. Some will struggle to make ends meet day to day, and others will live comfortably with significant resources at their disposal.
With that in mind, there are two key phrases in our question that need to be considered:
- Relevant circumstances; and
- A reasonable standard of living.
What are the Relevant Circumstances?
The Court will look at all the possible circumstances surrounding the relationship as it was and the conditions of the individuals going forward. As a starting point, the Court will look at the standard of living the parties had during their relationship. Did they go out together often? Did they buy expensive food, live in a luxurious mansion, and enjoy a relatively grand lifestyle? Or were they used to a more modest form of living situation? Perhaps they ate out occasionally but not too often, shopped for specials to help make ends meet, and sometimes struggled to pay the electricity bill when it was higher than expected.
Beyond simple living conditions, the Court will need to take into account the ability of one party to support the other. Is their situation after separation (assuming they are separated) different from before? Have expenses gone up, income gone down? What would be required to provide a particular standard of living when apart compared to when together?
In all, the Court, as part of any spousal maintenance application, is going to consider the positions of both parties before and after separation, the nature of the living standard previously, and all the facts put before the Court by the parties.
What is a Reasonable Standard of Living?
It is important to realise that a “reasonable standard of living” does not necessarily mean “the same standard of living you enjoyed previously”. Separation does not generally allow both parties to continue in exactly the same economic or financial conditions they had beforehand. The higher costs associated with maintaining a standard of living separately often make that impossible or, if not, then place an undue burden on the party paying spousal maintenance.
As a result, it might not be reasonable to order one party to support the other so much that the supported party can live the exact same lifestyle as they did pre-separation.
Even where a respondent could afford to pay an amount that would be sufficient, it can still be unreasonable to order them to do so in some situations. What are some examples where that might be the case?
Sometimes, an applicant for spousal maintenance might be considered to have lived an unreasonably lavish lifestyle to the point where it does not satisfy the Court that it is a “reasonable standard of living”. Or, perhaps, the applicant only experienced a higher standard of living for a brief period in an event where they received an unexpected lump sum or recent significant increase in family income to a bump up in lifestyle that the applicant had not enjoyed for any considerable period. There, that higher standard of living might not be considered a “reasonable standard” that the respondent would have to maintain. Finally, the Applicant may have only enjoyed their higher standard of living as a direct result of their relationship to a socially well-connected and visible person. As the relationship which gave rise to that position is over, it may be that the “reasonable” standard of living after the end of the relationship is not the same as it was during the relationship.
So, can wealthy individuals get spousal maintenance?
Yes. A wealthy individual can apply for, and receive, spousal maintenance provided they meet the relevant tests. They might be able to persuade the Court that a “reasonable standard of living” in the circumstances of their previous relationship and the capacity of the respondent, is significantly higher than someone of more modest means. So just because you have an asset or income position which allows you to meet your basic needs after a relationship ended, doesn’t necessarily mean you cannot seek spousal maintenance if you want to do so.
The best play is to get some legal advice specific to your circumstances and see whether an application is a good idea for you. Contact our team on (03) 9793 7888 or send us an email at reception@justfamilylaw.com.au