Divorce for British Expats: Spousal Maintenance Under the Law of England and Wales

Pursuant to the Matrimonial Causes Act 1973 (“MCA 1973”), the courts of England and Wales are able to make spousal periodical payments orders on, or at any time after, the granting of a decree of:

• Divorce;
• Nullity; or
• Judicial separation.

Provisions in respect of civil partnership cases are contained within Schedule 5 to the Civil Partnership Act 2004.

A spousal periodical payments order is essentially an order for the payment of a weekly, monthly or annual sum from one party to another.

The orders may take the form of:

• Maintenance pending suit / interim periodical payments
• No order and a clean break
• A nominal order
• A joint lives order
• A term order
• Orders with or without a section 28(1A) bar as to whether a term order can be extended
• A lump sum order, property adjustment order, or pension sharing order in certain circumstances by way of capitalising any spousal maintenance provision
• A global order

Where maintenance is ordered, the payments may be secured (i.e. secured by way of capital to provide security for the payer’s obligation to pay periodical payments). They may take the form of step-down orders (where the quantum of any such payment may be ordered to go up or down at specified points to reflect anticipated future circumstances) and/or include a provision for automatic variation.

It is further noted that the duty to consider a clean break / clean break order, orders with a section 28(1A) bar, and pension sharing orders are only provided for within the MCA 1973 in the event of a decree of divorce or nullity.

This article gives a brief overview of the above. It is, of course, advised that parties wishing to consider financial remedy claims under the laws of England and Wales take appropriate legal advice. Please further note that issues as to jurisdiction are also beyond the ambit of this article.

When a Court May Order Spousal Maintenance

As set out above, a spousal periodical payments order (whether secured or otherwise) may be made on, or at any time after, the granting of a decree of divorce, nullity or judicial separation.

In the event of a decree of divorce or nullity of marriage, the court has a duty to consider a clean break, where the financial obligations of each party towards the other terminate as soon after the grant of the decree as the court considers just and reasonable.

When exercising its powers, the court will consider, in particular, whether it would be appropriate to require those payments to be made or secured only for such term as would, in the opinion of the court, be sufficient to enable the party in whose favour the order is made to adjust without undue hardship to the termination of his or her financial dependence on the other party.

If the court considers that no continuing obligation should be imposed on either party to make or secure periodical payments in favour of the other, the court may dismiss the application with a direction that the applicant shall not be entitled to make any further application in relation to that marriage for an order under section 23(1)(a) or (b) of the MCA 1973.

A further point to note is that a spousal periodical payments order cannot survive:

• The payee’s remarriage or subsequent civil partnership; or
• The death of either party.

In either scenario, the periodical payments would come to an end. In the case of a secured spousal periodical payments order, however, any such order does not automatically end on the payer’s death.

The order may include other trigger events (events that bring the payments to an end), such as cohabitation for a given period. Undertakings may also be given in respect of unsecured periodical payments, and entering into an irrevocable deed of covenant to make financial arrangements for the payee in the event of the payer’s death during the term of the periodical payments order, the purpose being to avoid a claim against the payer’s estate under the Inheritance (Provision for Family and Dependants) Act 1975.

Maintenance Pending Suit

Prior to the resolution of the financial proceedings, the court may order periodical payments by way of:

• Maintenance pending suit in the event that decree absolute has not been obtained; and/or
• Interim periodical payments if decree absolute has already been granted.

No Order and a Clean Break

In circumstances where the court orders a clean break, there may be no spousal periodical payments. Alternatively, the payments may be limited for a term (following which the clean break would kick in).

Nominal Orders

A nominal order provides a nominal sum to be paid by one party to the other (for example £1 per annum) to preserve the payee’s claims for a more substantial spousal periodical payments order at a later date.

Joint Lives Orders

A joint lives order is a spousal periodical payments order that continues until the death of either party, or the payee’s remarriage or subsequent civil partnership. As above in the case of a secured spousal periodical payments order, any such order does not automatically end on the death of the payer.

A Term Order

Spousal maintenance may be made for such term as the court thinks fit, subject to the above.

Section 28(1A) Bar

A section 28(1A) bar refers to whether a term order may be extended. Where the term is non-extendable, it means that the payee may not apply to extend the term of the order under section 31 of the MCA 1973. These payments are known as being subject to a section 28(1A) bar.

Capitalisation

The court may determine that any spousal maintenance be capitalised (for example, a lump sum being ordered in place of the spousal maintenance) where the finances and circumstances make it appropriate to do so. Capitalising spousal maintenance has the advantage of achieving a clean break.

Step-Down Orders

As set out above, the quantum of any spousal periodical payments order (or indeed any secured periodical payments order) may be ordered to go up or down at specified points.

Global Orders

Global orders/Segal orders are orders for maintenance that include both spousal and child maintenance, with an express provision that such payments are reduced pound for pound by any Child Maintenance Service (“CMS”) assessment. There are limited circumstances in which such orders may be made.

Variation

Spousal periodical payments orders (and indeed secured spousal periodical payments orders) are orders that are capable of variation, subject to any section 28(1A) bar. Section 31(1) of the MCA 1973 expressly provides that the court shall have power to vary or discharge the order or to suspend any provision thereof temporarily and to revive the operation of any provision so suspended.

Orders can also provide for automatic variation. By way of one example only, there could be index linking (where the quantum automatically varies annually in line with the Retail Price Index (“RPI”), Consumer Price Index (“CPI”) or RPI All Items Excl Mortgage Interest (“RPIX”)).

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As above, this article gives a brief overview only. It is, of course, advised that parties considering financial remedy claims under the law of England and Wales take appropriate legal advice.