We in the Family team have received a large number of calls since the COVID-19 pandemic relating to the impact upon maintenance orders.
The key issue for everyone is whether they will have sufficient funds to meet their monthly expenditure. How incomes are made up will vary from person to person and how the current pandemic has impacted will also be individual.
There has been a notably high level of panic and stress amongst worried individuals, most probably because of the fear of the unknown in terms of how long this will last and whether they will continue to have sufficient funds to meet their outgoings. This applies to both payers and recipients of maintenance orders.
All court maintenance orders are capable of variation both upwards and downwards depending upon the circumstances of the parties involved. Save for extraordinary events these will tick over without much change save for perhaps an annual rise through inflation or perhaps a trigger being reached such as a child finishing education.
However COVID-19 is an extraordinary event and for many the impact will be significant as their incomes reduce and in some cases stop altogether, for an indefinite period of time.
Under section 31 Matrimonial Causes Act 1973 the court has power to vary a maintenance order.
Before deciding whether or not to vary, the court must consider:
Its primary objective is to consider the needs of both spouses and any children and how they can be met from the resources that are available. This also means that the court will look at both parties’ capital positions when determining what is available.
A normal application to vary an order would take between six and twelve months to resolve. With the current lockdown arrangements it is likely that it will take much longer as the court is prioritising welfare issues over financial proceedings.
The process for a variation is effectively a re-run of the financial remedy proceedings with both parties needing to provide full disclosure in Form E and the costs involved can be considerable, so it is important to seek advice before embarking upon proceedings.
If you have compelling evidence that your income has stopped or has been reduced significantly then it would be sensible to forward that evidence to your ex-partner setting out what your proposals are for the short term in terms of the maintenance order in place.
Do bear in mind that the maintenance provided could be the other’s main income so this should be done sensitively and with as much transparency as possible particularly if children are involved.
Given the speed at which the pandemic has struck, for many the full impact upon financial positions may not be known for a number of months. It would be sensible to negotiate temporary arrangements and avoid applying to court at this stage. If an application is made now, then the circumstances may be totally different by the time a judge is able to consider the circumstances, but if it is not possible to reach an agreement to a reduction or suspension then the application may be necessary immediately so that the court can consider remitting any arrears if enforcement action is taken.
For the recipient these may be desperate times as any reduction in maintenance is likely to hit hard. However at this time, recipients should consider what alternative income streams may be available to replace lost maintenance income. This may mean applying for state help. Whilst there are delays in obtaining this the payments will be made from the date of any application and therefore it is worth starting the application immediately when your ex-partner indicates they cannot make the payments
Recipients should also talk to mortgage companies and other bank or credit companies about payment holidays in order to ease the position and given that the pandemic was an unforeseeable event it is likely that most companies will have compassion and understanding at this difficult time. The key will clearly be good, open and transparent communication.
If as the recipient you have been provided with credible evidence of your ex-partner’s position that their income has been reduced or stopped it is unlikely that the court will enforce a maintenance order where there are no means to pay. It may be difficult to obtain evidence of those that may be self-employed and there should be some understanding as to the other’s position. It is worth trying to engage in constructive dialogue regarding payment reductions and/or suspensions as opposed to litigation as there is no guarantee that you can recover costs spent on litigation and lost amounts in the current uncertainty.
Many court orders will also contain a school fees order. If this is the case for you, it may be sensible to have conversations with schools to consider options as each will have their own criteria and considerations for payment terms. Parties should communicate and try and achieve the best outcome for the children given the circumstances. If there are insufficient funds available to pay future school fees, this may lead to children being placed back into the state system.
It is of course hoped that there will be a recovery but the timescale is uncertain. Some businesses may be damaged beyond repair others may recover but slowly.
At TLT we are available to discuss and advise you about issues of maintenance and other concerns surrounding Covid-19 and family issues.
In terms of general advice for payers we recommend you are open and transparent in the event of incomes reducing and for recipients upon receipt of such evidence, show understanding notwithstanding the financial pressure that it places them under. Litigation in the vast majority of cases should be the last resort.
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at 08 April 2020. Specific advice should be sought for specific cases. For more information see our terms & conditions.