One of the greatest worries when considering a separation or a divorce is what the financial implications are.

The Court has a great deal of discretion and flexibility when deciding on the appropriate division of the matrimonial assets on a divorce or legal separation.

The Court can make Orders in relation to income and capital.

Income Orders

  • Maintenance pending suit
  • Periodical payments
  • Secured periodical payments

Capital Orders

  • Lump Orders
  • Property Adjustment Orders
  • Orders for sale

When deciding what Orders are appropriate, the first consideration is given to the welfare of any child of the family who has not attained the age of eighteen years. Therefore the Court will ensure that it reflects not only the needs of both parties but also the children.

Application for child maintenance usually would be made under the Child Support Act 1991 to the Child Support Agency.

The factors below (commonly refer to Section 25 factors) are taken into consideration by the Court when deciding what Orders to make.

1. Resources

Income and earning capacity, property and other financial resources that the party has or is likely to have in the foreseeable future. The Court will take into account the parties income from all sources.

2. Needs

The financial needs obligations and responsibilities to which each of the parties to the marriage has or is likely to have in the foreseeable future.

The most basic of these needs is the provision of accommodation for both parties and any children (Capital needs) and the expenses connected with the accommodation and the cost of food and clothing (Income needs).

3. Standard of living

The Court will not attempt the impossible by trying to preserve both party's standard of living, as there will be an increased cost of running two households. The Court will try to ensure that the reductions in the party's standard of living is born evenly by them.

4. Age of the parties and length of the marriage

When this factor is considered in conjunction with other factors, its significance is apparent. For example a young wife without children is likely to have an earning and borrowing capacity and financial independence (clean break) maybe appropriate as opposed to older spouse leaving a marriage with little of no earning capacity but has made greater contribution to the marriage.

5. Disability

If a spouse suffers from mental or physical disability this can affect the spouse's resources by reducing earning capacity. It may also increase needs if expensive treatment/care or equipment is needed.

6. Contributions to the family.

Consideration can be given to the parties past and anticipated contributions to the welfare of the family.

It has been recognised for some time that a wife who cares for the home and the family contributes as much to the family as the wife that goes out to work.

7. Conduct

The general position is that it will be very rare for the spouse's misconduct to be raised.

Conduct may be an issue where it has a direct bearing on the parties' finances. The Court is required to consider conduct which it would be inequitable to disregard, however the fact that the Respondent has committed adultery will not be relevant unless there are aggravating circumstances.

Examples of circumstances where conduct was an issue.

  • the husband fritters away joint assets and reckless hopeless business ventures.
  • discharged of a maintenance order made in favour of a wife after she was convicted and imprisoned for sighting others to murder her husband.
  • the husband has a serious drink problem which contributes to his refusal to obtain employment and his neglect of house ultimately forcing its sale.

8. Potential financial loss

The Court is required to consider any potential benefits a party might lose as a result of the marriage ending. The most common example would be a financial dependent middle age wife of a long marriage. In such a situation there may be an argument for giving the wife a greater share of the other matrimonial assets to mitigate the problem.

Clean break

The aim of a clean break is to settle once and for all the parties' financial responsibility towards each other and to end their financial interdependence.

As far as income Orders are concerned, the most extreme form of clean break is an Order dismissing the application, together with a bar against making any further applications. Another example which is considered to be less extreme is an Order for term maintenance, whereby a party receives maintenance for a limited period only, in order to tide themselves over while they adapt to becoming financially self sufficient. The clean break would therefore be deferred to a future date.

In respect of capital Orders, a clean break is commonly achieved by means of a lump sum payment in return for a dismissal or other claims.

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