Spousal Maintenance and Child Support
“Maintenance” refers to virtually any form of material provision enabling an adult or child to live above mere subsistence. Under s 80(1) of the Family Law Act, a court is empowered to make such orders as it considers proper for the provision of spousal maintenance. The kinds of maintenance orders that a court can make are set out in s 80 of the Family Law Act. They include:
- urgent orders;
- interim maintenance orders;
- orders for periodic payments;
- orders for lump sum payments
- transfers of property; or
- any other order that is necessary to do justice between the parties.
A person who seeks an order for maintenance must satisfy two requirements:
- They are unable to adequately support themselves; and
- the other party has the financial capacity to provide support
If these requirements are met, then the court is required to consider the factors set out in ss 74 and 75(2) of the Family Law Act. Section 74 is concerned with matters related to bankruptcy and insolvency. Section 75(2) sets out the factors that guide the court’s factual inquiry into the nature of the order it ought to make.
A party may apply for a maintenance order until twelve months from the date that either a Divorce Order or Decree of Nullity comes into effect. If a party fails to apply for a maintenance order within the time limit, then they must seek permission from the court to apply out of time. The court may allow a party to apply out of time if:
- either the applicant or a child would experience hardship if permission were not granted; or
- the party’s circumstances at the end of the time limit were such that they were unable to support themselves without an income tested pension, allowance or benefit
For de facto couples, an application for maintenance should be filed within two years from date of separation, unless the court grants permission to proceed out of time.
1. The Ability to Adequately Support Oneself
2. The Capacity to Support the Applicant
3. Spousal Maintenance Considerations
4. Lump Sum Payment
5. Transfer of Property
6. Interim Spousal Maintenance
7. Urgent Spousal Maintenance
8. Cessation of Maintenance Orders
9. De Facto Maintenance
10. Child Support
The Ability to Adequately Support Oneself
For the purpose of meeting the requirements for a maintenance order, “adequately” means a standard of living that is reasonable in the circumstances: In the Marriage of Nutting (1978) FLC 90-410. Accordingly, the meaning of “adequately” may vary from case to case. Moreover, it does not mean mere subsistence, nor does require the applicant to have depleted all of their monetary and capital resources.
The inability to adequately support oneself must stem from:
- having the care of a child of the marriage;
- age or some physical or mental incapacity for employment; or
- any other adequate reason.
In determining whether a party can adequately support themselves, the court will have regard to their capacity to obtain employment: In the Marriage of Ashbury (1978) 33 FLR 173. It may also have regard to any relevant statistical data concerning the economic consequences of separation: Mitchell v Mitchell (1995) FLC 92-601. Blameworthy conduct, on the other hand, is not a relevant consideration: Soblusky v Soblusky (1976) FLC 90-124.
The Capacity to Support the Applicant
The considerations that guide the court in determining whether the respondent to a maintenance application is capable of providing support are generally the same as those that relate to assessing the applicant’s ability to adequately support themselves. Some of the more prominent considerations taken into account include:
- the duty to seek appropriate employment (e.g., not taking a lesser paying job to defeat a maintenance claim);
- the income and financial resources of any members of that person’s household; and
- the individual’s monetary, capital and financial resources
It should be noted that the applicant is not entitled by default to their pre-separation standard of living. This is the case even if respondent has the financial capacity to support the applicant so as to achieve that standard.
Spousal Maintenance Considerations
Courts must have regard to the spousal maintenance considerations set out in s 75(2) of the Family Law Act when hearing such applications. These considerations specify the factual matters that the court must take into account in determining what constitutes an appropriate maintenance order. Whether a court is required to consider a particular consideration is subject to whether that consideration is relevant to the matter at hand.
Section 75(2)(a): Age and Health
Age and health are factors that may be relevant to an application for maintenance. A party’s age and health, for example, may be relevant because they limit their capacity for gainful employment. For example, a party who is approaching the age of sixty-five may receive an adjustment in favour so as to contribute to their retirement needs.
Section 75(2)(b): The Parties' Income, Property, Financial Resources and Capacity for Employment
A party’s income is relevant to assessing their ability to either adequately support themselves or contribute to the other party’s financial support, depending on whether they are the applicant or respondent to a maintenance application. Their property and financial resources are also relevant in this regard. For instance, the weight accorded to the fact that a party has a low income may be offset by their considerable property and financial resources (e.g., a forthcoming entitlement to income or property under a trust, a reasonable expectation of an inheritance, future pension payments, etc.). In other words, being income-poor but asset-rich may not justify a maintenance order. Nor will it enable the avoidance of a maintenance claim in the case of respondents.
However, it should be noted that a court will not expect a party to liquidate all of their property in order to meet their immediate income needs or those of the other party. A court will allow for a party to retain a reasonable amount of property in assessing a maintenance claim. What constitutes a reasonable amount may vary from case to case: In the Marriage of Beck (No.2)  FLC 91-318.
When assessing a party’s capacity for employment, the court will consider the employment opportunities available to that party. In some instances, this factor may also involve consideration of the party’s age and health, hence the overlap between ss 75(2)(a) and 75(2)(b).
A party’s earning capacity may be assessed by reference to the factors identified in DJM & JLM (1998) FLC 92-816. They include:
- the ability to work as determined by reference to a party’s age skills, education, health, prior work experience and qualifications;
- good faith efforts to obtain employment; and
- the willingness of employers in the relevant industry to hire the party.
Unreasonably refusing to accept appropriate employment may result in the dismissal of a maintenance application: Taguichi & Taguchi (1987) FLC 91-836.
Section 75(2)(c): Having the Care and Control of a Child of the Marriage Who Is Under the Age of 18
This factor takes account of the financial implications of looking after a child of the marriage. It may also contemplate its associated moral and social responsibilities: In the Marriage of Collins  FLC 92-149.
While the express words of this provision appear to limit the court’s inquiry to children of the marriage, the court may also take account of any children under the age of 18 more generally. This might include, for example, a party’s responsibility to care for a child of their new spouse or de facto partner.
Section 75(2)(d): Commitments of Either Party That Are Necessary to Enable Them to Support Either Themselves, Any Child or Other Person They Have a Duty to Maintain
For the purpose of this sub-paragraph, the reference to “duty” refers to a legal duty to maintain a child or other person. It does not include moral or other forms of non-legal duty.
The term “necessary” is intended to limit the court’s assessment of party’s expenses to reasonable commitments. The expenses set out in a party’s financial statement, for instance, provide guidance with respect to what constitutes a reasonable commitment. Expenses that go beyond the amount allocated under a child support assessment may not constitute “necessary commitments.”
The court is not permitted to include provision for child maintenance in making an order for spousal maintenance on account of this paragraph. This principle applies even when the party seeking maintenance has solely contributed to a child’s financial support. Provision for a child’s financial support should be sought under Pt VII, Div 7 of the Family Law Act or under the relevant provisions of the Child Support Assessment Act.
Section 75(2)(e): The Responsibilities of Either Party to Support Another Person
In contrast to the previous paragraph, this paragraph allows the court to consider a party’s legal and moral duties to support another person: In the Marriage of Lutzke  FLC 90-714. It also includes a party’s responsibility to support either a new de facto partner or a child of their new partner: In the Marriage of Soblusky (1976) 28 FLR 81. It does not, however, specify whether any of the duties contemplated by this paragraph ought to have priority over any other duties taken into consideration under s 75(2).
Section 75(2)(f): Eligibility for a Pension, Allowance or Benefit
The term “eligibility” means “fit or suitable to be chosen”: In the Marriage of Crapp (No 2) (1979) 35 FLR 153. Accordingly, a party’s fitness or suitability for a pension, allowance or benefit must be taken into account in determining a maintenance application.
This paragraph contemplates 3 distinct matters:
- a party’s eligibility for a pension, allowance or benefit;
- a party’s receipt of a pension, allowance or benefit; and
- a party’s eligibility for a pension, payment or benefit related to a superannuation fund.
In deciding the nature of spousal maintenance to be awarded to the applicant, the court must disregard the income received in relation to an income tested benefit, allowance or pension. The purpose of this is to alleviate the taxpayer’s responsibility to financially support the applicant in circumstances where the respondent is capable of doing so.
Section 75(2)(g): A Standard of Living That Is Reasonable Under the Circumstances
In considering this factor, the court will examine:
- the parties’ standard of living during the course of their relationship,
- the capacity of the respondent to financially support the applicant in accordance with that standard, and
- whether it is reasonable in the circumstances to do so.
Oftentimes, it is unreasonable to order that the respondent financially support the applicant to the standard of living they enjoyed pre-separation. The economic consequences of separating simply preclude this outcome.
Even when the respondent is capable of supporting the applicant in accordance with their previous standard of living, it may nonetheless be unreasonable to order the respondent to do so. There are, in general, 3 circumstances in which this approach may be justified.
First, the applicant enjoyed a high standard of living of the basis of their role as determined by their relationship to a socially prominent individual. Upon the breakdown of the relationship, the court may regard continued enjoyment of the same standard of living unreasonable, since the applicant would no longer be fulfilling the relevant role: In the Marriage of Aroney  FLC 90-709.
Second, the applicant enjoyed a high standard of living, but only for a relatively brief period. This may occur, for example, when one of the parties commences a short relationship with a wealthy individual: In the Marriage of Oliver (1979) 1 SR (WA) 125.
Third, the applicant enjoyed an extra-ordinary standard of living. In such instances, it may be unreasonable for a court to order the respondent to finance the applicant’s formerly lavish lifestyle: In the Marriage of Wilson (1989) 96 FLR.
Section 75(2)(h): The Extent to Which Maintenance Would Enable the Applicant to Undergo Training or Education So as to Place Them in a Position to Support Themselves
This factor is relevant in circumstances where the applicant requires funds to cover expenses related to undertaking a course or training that might improve their financial prospects. It is important to note that this paragraph is limited to instances where the course or training has some prospect of improving a party’s earning capacity. Accordingly, it may not be relied upon as a basis for undertaking a course that may render the applicant’s economic prospects less viable: In the Marriage of Lang (1976) 25 FLR 130.
Section 75(2)(ha): The Effect of Any Proposed Order on the Ability of a Creditor to Recovery a Debt From Either Party
The court is required to consider the ability of any third party creditors to recover debts owed by either party. This section does not require the court to make an order that enables the creditor to recover the debt that is owed to them. Nor does it give the creditor any priority when it comes to making an appropriate order. Moreover, this particular consideration assumes greater importance in the context of proceedings between the one of the party’s and the bankrupt party’s trustee in bankruptcy.
Section 75(2)(j): The Extent to Which the Applicant Has Contributed to the Earning Capacity, Property or Financial Resources of the Other Party
Unlike other spousal maintenance considerations, this paragraph requires the court to undertake a retrospective inquiry into a party’s contributions to the other party’s earning capacity, property or financial resources. For example, a party’s contributions to the other party’s superannuation or their ability to acquire a professional qualification enabling them to earn a higher income may be relevant under this paragraph.
Section 75(2)(k): The Length of the Marriage and the Extent to Which Is Has Affected the Applicant's Earning Capacity
The duration of the parties’ marriage has potential to affect the applicant’s earning capacity in various ways. It may limit their capacity to advance their earning potential as a result of interrupting their employment. This might occur when the applicant’s skills have been rendered obsolete on account of shouldering the responsibilities of the marriage, thereby limiting their capacity for professional development.
Section 75(2)(l): Protecting a Party's Desire to Continue Their Role as a Parent
Whereas the spousal maintenance considerations set out under s 75(2) limit the court’s inquiry to financial considerations, this particular paragraph does not. Instead, it is mainly concerned with either party’s desire to continue their role as a parent on a substantially full-time basis.
That either party desires to continue their role as a full-time parent does not empower them to insist on receiving maintenance so that they may fulfil their parental duties. The court is only required to take that desire into account in determining an application for maintenance.
Section 75(2)(m): The Financial Circumstances Relating to a Party Cohabitating With Another Person
It appears to be the case that this paragraph deals with individuals living together in a way that resembles a de facto or married couple. Individuals who occasionally live apart due to work or some other circumstances may also be regarded as “cohabitating” for the purpose of this paragraph.
This consideration requires the court to take account of the income and expenditure of the cohabitants. It also requires the court to take account of what it may regard as appropriate financial circumstances for the cohabitants. This might be relevant where, for example, a person who is cohabitating with one of the parties has the capacity to earn an income, but chooses not to: In the Marriage of F  FLC 91-214.
Section 75(2)(n): The Terms of Any Proposed Order to Be Made
Section 79 of the Family Law Act empowers the court to re-distribute the property of parties to a relationship that has broken down. Since orders made under this section may significantly affect a party’s financial position, the court is required to consider their effect when determining a maintenance application. For example, a property order under s 79 may minimise or eliminate a party’s need for maintenance. Alternatively, it might affect a party’s ability pay maintenance.
Accordingly, in proceedings that involve both property and maintenance applications, the court may consider the property application first. This will enable it to consider the effect that a property order may have the parties’ respective financial positions before moving onto the maintenance considerations.
Section 75(2)(naa): The Terms of Any Proposed Order or Declaration
This paragraph requires the court to consider the terms of any order that has been made, or is proposed to be made, with respect to separate proceedings. Such proceedings would be between one of the parties and a de facto partner, and they would relate to either property or maintenance. Such proceedings are possible because of the definition of a “de facto relationship” under the Family Law Act. The definition is consistent with a party to a relationship being in a de facto relationship with a different person.
Section 75(2)(na): Existing or Potential Child Support Liabilities Under the Child Support Assessment Act
Under this provision, the court is required to consider any existing or potential liability to pay child support under the Child Support Assessment Act. The weight accorded to this factor will depend on a number of variables, including:
- the amount of child support either party is required to pay;
- the parties’ financial circumstances;
- the children’s needs;
- regularity of the payments; and
- whether payments are likely to continue into the future
Section 75(2)(o): Any Other Relevant Fact or Circumstance
This paragraph requires the court to consider matters of a financial nature that the circumstances of the case under consideration require to be taken into account. Some examples of the kinds of matters that may be taken into account include:
- unilaterally disposing of assets;
- likely inheritances;
- premature distributions of property;
- marrying for the dominant purpose of acquiring property; or
- any informal property or maintenance agreements that parties have entered into.
Section 75(2)(p), (q): Financial Agreements
Financial agreements remove the court’s power to make orders with respect to maintenance and property matters. However, such agreements may not determine all matters relating to maintenance and property. Under these circumstances, the parties to a marriage make seek orders for maintenance. This paragraph requires the court to take account of any existing agreements before proceeding to make a maintenance order.
Lump Sum Payment
In general, orders for periodic maintenance (e.g., weekly payments) are preferred over orders for lump sum maintenance. The purpose of this is to provide leeway where the parties’ circumstances change in a way that justifies varying the order. Nonetheless, there are circumstances where a court may be inclined to make orders for lump sum maintenance. These include:
- situations where it is unlikely that the party liable for paying maintenance will comply with an order for periodic maintenance;
- satisfying an immediate financial need of the recipient (e.g., purchasing a car so that the party in question may commute to work); or
- instances where it is possible to assess the recipient’s financial needs for a definite period.
When the amount of lump sum maintenance is calculated as the sum of periodic payments over a definite period, then it may be discounted. The purpose of this is to account for the financial advantage of the recipient having funds available in a more timely manner: In the Marriage of Vartikian (No.2)  FLC 91-587.
Transfer of Property
Section 80(1)(ba) of the Family Law Act empowers courts to make orders for maintenance by way of transferring property from one party to the other. A maintenance order by way of transferring property does not, however, prevent any further orders for maintenance from being made.
Interim Spousal Maintenance
Interim spousal maintenance orders are orders that are made during the course of proceedings. They only remain in effect until the proceedings are determined on a final basis. The source of power under which courts may make interim maintenance orders is s 80(1)(h) of the Family Law Act.
Urgent Spousal Maintenance
Orders for urgent spousal maintenance may be awarded in circumstances where a party is in immediate need of maintenance and it is not possible for the court to hear all the relevant evidence. A court may order a party to pay maintenance to the other party until it is able to comprehensively assess the parties’ financial circumstances. The source of this power is contained in s77 of the Family Law Act.
Cessation of Maintenance Orders
Maintenance orders may cease under any of the following circumstances:
- the death of either party, if it is an order involves payments;
- the death of the recipient, if the order does not involve payments; or
- re-marriage of the recipient, subject to exceptional circumstances.
It is worth noting that an order for de facto financial maintenance does not cease merely because the recipient has entered into a new de facto relationship.
De Facto Maintenance
Before a party to a former de facto relationship can apply for a maintenance, they must satisfy at least one of the following requirements set out in s 90SB of the Family Law Act:
- the parties were in a de facto relationship for a period, or multiple periods, amounting to at least 2 years;
- there is a child of the relationship; or
- the applicant has made a substantial contribution to the relationship such that failing to make a maintenance order would result in a serious injustice.
All other requirements and considerations that apply to married couples who have either separated or divorced also apply to de facto couples.
The child support scheme was introduced to address the shortcomings of the system of child maintenance under the Family Law Act. Now there is an administrative system that handles both the assessment and collection of child support. The system is contained in the provisions of the Child Support (Assessment) Act and the Child Support (Registration and Collection) Act.
Both parents and non-parent carers can apply for a child support assessment. The amount of child support payable is generally determined by reference to the capacity of the parents to financially support their children, the costs of children, and the level of care that each parent or non-parent carer provides.
There are a number of “terminating events” that will cause a person’s child support liability to cease. In relation to the child, those terminating events include:
- The child’s death;
- The child turning 18 years of age;
- The child marring or entering into a de facto relationship;
- The child is neither present in Australia on the day that the application for the assessment is filed
- The child is not an Australian citizen on the day the application is filed; or
- The child is not ordinarily resident in Australia on the day that the application is filed.
- In relation to a person who is liable to pay child support, a terminating event occurs when;
- that person dies; or
- that person no longer lives in a reciprocating jurisdiction and does not immediately move to Australia or a reciprocating jurisdiction.
There are circumstances where the formulas applied in calculating a person’s child support liability do not produce a just result. This generally occurs in circumstances where:
- a person subject to a child support assessment is income poor, but asset rich;
- the child has special needs;
- the cost of spending time with the child are high;
- the cost of childcare are high; or
- both parents expected that their children would attend private schools.
In such circumstances, it may appropriate to either:
- Apply to the Child Support Registrar for a change of assessment in special circumstances; or
- File an application in a court for a Departure Order.