Spousal Maintenance Considerations in Australia

In Australia, 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) [1983] 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 [1990] 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 [1979] 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 [1979] 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 [1982] 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.