Navigating the intricacies of spousal maintenance can be challenging for anyone, but for high-income earners, we know that the stakes are often higher, and the landscape becomes significantly more complex.

This blog post breaks down the essential information you need to understand your rights and obligations, from eligibility criteria and types of maintenance to strategies for managing and modifying maintenance orders.

Key takeaways

Spousal maintenance is separate from child support and is designed to meet a former spouse’s financial needs after separation.
Eligibility depends on the applicant proving financial need and the respondent having the capacity to pay.
Spousal maintenance can be urgent, interim, or final and may be paid as periodic payments or a lump sum.
High-income earners face added complexity with variable income, lifestyle expectations, and detailed disclosure obligations.
Maintenance orders can be modified or terminated if circumstances change, including remarriage or financial changes.
Early legal advice is essential to navigate claims, negotiate fair outcomes, and integrate spousal maintenance into broader property settlements.

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Spousal maintenance can be complex, and every situation is different. Getting the right advice early can help you understand your obligations, explore your options, and work towards a fair outcome.

What is spousal maintenance?

Spousal maintenance (referred to as ‘alimony’ in other countries), which differs from child support, is intended specifically to support a former spouse after separation or divorce, rather than addressing the needs of children.

In cases involving high-income earners, the interplay between spousal maintenance and child support often requires careful assessment to ensure fairness.

The Family Court considers both forms of support separately, emphasising the unique role each plays. For instance, spousal maintenance typically addresses the broader financial needs of a former spouse, such as housing, utilities, or medical expenses, whereas child support focuses solely on the costs of raising children, such as school fees, clothing, or extracurricular activities, and the sharing of those costs between parents.

Eligibility criteria for spousal maintenance

Determining eligibility for spousal maintenance involves a two-part “threshold test” that examines the financial circumstances of both parties:

The applicant must demonstrate financial need, showing that they cannot adequately support themselves, which involves determining any shortfall between their income and reasonable living expenses.
The respondent must have the capacity to pay, meaning their income exceeds their reasonable living expenses, resulting in a surplus that can be used to contribute to the applicant’s financial shortfall.

The applicant must also establish that their inability to maintain themselves arises from one of the following factors:

Caring for a child of the marriage who is under 18 years of age.
Age, physical, or mental incapacity that prevents them from securing appropriate employment.
Any other sufficient reason deemed appropriate by the court.

The court also considers the standard of living enjoyed during the relationship. For high-income earners, this can significantly influence what is deemed “reasonable.”

While there’s no obligation to match the pre-separation lifestyle exactly, the disparity in standards of living can weigh heavily on the decision.

Temporary vs. long-term spousal maintenance

Spousal maintenance is typically awarded for a set period to support the applicant until they achieve financial independence through means like study or employment. However, in cases involving long-term challenges such as disability or significant mental health issues, maintenance may be ongoing, especially when high-income earners are involved.

It is typically provided through periodic payments, which are usually set for a specific term to help the recipient retrain and become self-sufficient, or, in exceptional cases, may continue for life.

In some cases, maintenance can be paid as a lump sum.

There are three main types of applications for spousal maintenance:

Urgent maintenance – designed to meet an immediate need, often until the matter can be considered in detail by a Court
Interim order for maintenance – to cover a spouse’s needs until the final property settlement is worked out by the Court
Final order for maintenance – to cover any ongoing need, over and above the property settlement outcome

Deadlines for filing spousal maintenance claims

Timing is also critical. Applicants must lodge a spousal maintenance claim:

Within 12 months of a divorce order becoming final, for married couples (note: divorce orders can only be sought after 12 months and one day of separation).
Within two years of separation for those in de facto relationships.

Failing to act within these timeframes can bar an applicant from making a claim, making it essential to seek legal advice promptly.

Unique challenges for high-income earners

For high-income earners, spousal maintenance calculations can become more complex due to factors such as bonuses, commissions, and fluctuating income levels.

While these variable income streams might not directly affect the recipient’s reasonable living expenses, they can impact the respondent’s ability to meet their obligations.

To address these fluctuations, maintenance orders are often designed to be variable, allowing adjustments as circumstances change.

Additionally, the lifestyle enjoyed during the marriage plays a pivotal role in determining what is deemed “reasonable.” For instance, if annual overseas holidays were a standard part of family life, the court may consider these expenses reasonable moving forward and incorporate some provision for them into the maintenance award.

However, the respondent’s ability to afford such expenses alongside other commitments, like childcare costs, mortgage payments, and private school fees, all of which can affect their capacity to pay maintenance, is carefully assessed.

It’s also worth noting that maintenance is paid from post-tax income.

Strategies for high-income earners to manage spousal maintenance obligations

Effectively managing spousal maintenance starts with a clear understanding of financial circumstances.

High-income earners are required to provide a complete financial statement, detailing all income sources, assets, and liabilities. This document forms the foundation for determining any financial shortfall or surplus and must be supported by specific disclosures, such as bank statements, tax returns, and business financial records.

Negotiating fair maintenance agreements is another key strategy. High-income earners should consider working towards a settlement that comprehensively addresses spousal maintenance within the broader financial agreement. If a ‘package deal’ property settlement is negotiated, which also includes provision for maintenance, a Binding Financial Agreement will often be used to record that outcome, providing a ‘clean break’ between the parties.

Frequently Asked Questions: Spousal Maintenance

Below are a few commonly asked questions about spousal maintenance.

Do I still receive spousal maintenance if I start a new relationship?

In most cases, entering into a new relationship does not automatically terminate spousal maintenance payments.

However, the court may consider the financial impact of the new relationship on the recipient’s ability to support themselves.

If the new partner’s financial contribution is deemed sufficient to meet the recipient’s needs, it could influence the maintenance arrangement or result in a modification of the order.

Note that remarriage will terminate a periodic maintenance order.

Can spousal maintenance be modified or terminated?

Yes, spousal maintenance orders can be modified or terminated (while they are operative) if there is a significant change in circumstances. This could include changes in the financial situation of either party, the recipient becoming self-sufficient, or the payer experiencing financial hardship.

Either party can apply to the court to extend, reduce, or adjust the level of support of the order, providing evidence to support the requested change.

Applications to modify a spousal maintenance order must be made during the “currency” of the order (i.e., while the original order is still in effect).

Navigating the complexities of spousal maintenance for high-income earners

Navigating spousal maintenance can be a complex process, particularly for high-income earners, where financial considerations and lifestyle expectations are more intricate.

Understanding eligibility criteria, types of maintenance payments, and how to manage obligations is necessary for achieving fair and sustainable outcomes. Considering spousal maintenance thoughtfully, and whether an outcome can be negotiated as part of the overarching property settlement, can also have strategic advantages for both payee and payer.

Expert support when you need it

At BGM Family Lawyers, we have the expertise and experience to guide you through each step, ensuring your rights and interests are protected. Whether you need assistance with financial disclosure, negotiating agreements, or modifying orders, our team is here to provide tailored legal support.

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Navigating spousal maintenance: A comprehensive guide for high-income earners