The health and economic chaos caused by COVID -19 has already proven to be far reaching in Australia and throughout the World. The overall economic impact and evolution of the virus is still unknown. Australia, for now, appear to have deflected the devastating health crisis experienced in other countries, however, for many the financial implications are particularly acute and may be long lasting. If you have also recently separated from your spouse or partner, then you may also be experiencing further financial challenges.
Changes in an individual's financial circumstances may have resulted in the loss of employment by the forced closure of a business or a reduction in business revenue or investments. Ensuring that you have adequate financial support from your former spouse or partner and access to property is now more so important in light of the economic uncertainties.
Under the Family Law Act a party to a marriage is liable to maintain the other party to the extent that they are reasonably able to do so, provided that the other party is unable to support themselves. Some factors the Court looks at when determining whether a party should receive support include whether they have the care of a child of the marriage or whether, due age or a physical or mental incapacity, they are having difficulties finding gainful employment. Put simply, spousal maintenance is weighing up a parties need against the other parties capacity to meet that need.
The loss of income due to COVID-19 may be relevant to a spousal maintenance claim in so far it relates to a parties need for spousal maintenance or a parties ability to pay spousal maintenance. This area of law can be complex, particularly if it involves complex corporate structures and trusts. It is therefore essential that specialist advice is obtained to ensure the success of any application, in the event a negotiated outcome is not possible.
Similarly, it is also important to ensure that any pre-existing support obligation such as a spouse maintenance or child support order, is proper and measured against the capacity of a party to meet that obligation. If there has been a reduction in a parties income or earning capacity, then a modification of the order may be necessary
Any modification of an order will not occur unless the Court is satisfied that there has been a change in one of the parties circumstances to justify a change. A decrease or loss in income will be relevant in seeking a modification, however, it also depends on the extent and duration of the reduction in income. Applications to set Order aside can be expensive, and therefore a negotiated settlement should be pursued first. Specialist advice is recommended in the event you seek to modify a Spouse Maintenance Order.
Swaab and the Family Court continue to operate during the COVID-19 pandemic and are still advising client's, assisted by Microsoft Teams and Zoom.
For further information, please contact:
Ryan Gannon, Senior Associate
Phone: +61 2 9233 5544
Email: rmg@swaab.com.au
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
