Working through the financial uncertainties that come with separating is a top priority for most couples. Reaching agreement, or at least getting an arrangement in place, for child support and/or spousal maintenance is critical.
Often when a couple separates the financial impact is felt immediately – especially when one person has been the ‘bread winner’ or ‘primary income earner’ or there are now two households to pay for. All too often in these situations the one person can be left wondering how on earth they’re going to pay the bills and put food on the table. So, getting maintenance arrangements and/or child support in place has to be a priority.
When it comes to family law and separation, there are two types of financial support:
What is spousal maintenance?
In situations where one person is unable to support themselves without Centrelink benefits, they may be able to claim spousal maintenance.
Spousal maintenance basically requires the other person (usually the primary income earner) to provide financial support on a weekly basis, until a property settlement is finalised – providing they have the financial capacity to do this after they’ve covered their own essential expenses.
How is spousal maintenance determined?
Spousal maintenance is by no means an automatic right and a court application is required to get it, unless of course you and your partner have reached an agreement.
To determine what is an appropriate level of spousal maintenance the court will:
- look at whether the expenses being claimed are reasonable;
- take into account the lifestyle the couple enjoyed before they separated;
- assess the ability of the other person to pay maintenance, once their own living expenses are cover;
- consider the capacity of the person claiming the maintenance to earn an income or access money.
Sometimes the court will set spousal maintenance at a level that will allow that person to continue to enjoy a similar standard of living to what they did during the relationship. In other instances, this simply isn’t possible or feasible and the level of maintenance is set accordingly.
If you have recently separated and are in need of urgent financial support, please get advice from an experienced family lawyer asap.
What is child support?
Children are the responsibility of both parents, whether they’re together or separated. So it makes sense that when parents separate, the financial responsibility that comes with having children continues to be shared.
Child support is typically paid by one parent to the other to assist with the costs or raising a child or children. It is designed to only cover the basic living expenses and costs (food, utilities etc). It does not take into account the costs of things like schooling, uniforms, extracurricular activities and major medical issues – parents need to reach agreement on these things themselves.
How is child support calculated?
Calculating child support is an administrative process that is managed through The Department of Health and Human Services. It uses a formula to work out how much should be paid by one party to the other party. This formula takes into account:
- The parent’s taxable income and combined income.
- How much time each parent spends caring for the child or children.
- The age of the child or children.
This assessment is updated each year, once tax returns are lodged and there are only limited circumstances where assessments can be reviewed.
Because Child Support doesn’t take into account costs like schooling, uniforms, extracurricular activities and health care, parents often find that they need to put in place additional arrangements or agreements.
Sometimes, parents will decide to put in place their own Child Support arrangements and agreement and ‘contract out’ of the child support system. This lets them tailor the arrangements to best suit their needs and their children’s needs. This could mean that they vary the amount paid, how or when it is paid and include other expenses. In these instances it is really important to get advice from an experienced family lawyer before finalising and agreement.
If you’ve recently separated or are navigating maintenance issues feel free to get in touch – we’re here to help you understand your different options, how the law applies to your situation and offer valuable advice.