Financial arrangements between former spouses or civil partners often require adjustments over time to reflect changes in circumstances. Maintenance orders, also known as periodical payments, are a common feature of divorce or dissolution settlements. However, life is unpredictable, and situations do not always remain the same as they were when the order was initially made. The law of England & Wales provides a mechanism for varying maintenance orders, ensuring fairness and proportionality as circumstances evolve.
This article explores the legal framework surrounding variation applications, the grounds on which changes may be sought, and the key considerations for individuals navigating this process.
The Legal Basis for Varying a Maintenance Order
Under section 31 of the Matrimonial Causes Act 1973, courts in England & Wales have the power to vary, suspend, or discharge maintenance orders. This applies to spousal maintenance (periodical payments), secured periodical payments, and payments for children made under spousal maintenance orders in financial remedy proceedings.
Similar powers exist for civil partners under Schedule 5 of the Civil Partnership Act 2004. The aim of variation proceedings is to ensure that maintenance payments remain fair and appropriate when financial or personal circumstances change. Courts assess whether the original conditions upon which the order was based still stand or if adjustments are necessary to achieve fairness.
Grounds for Seeking a Variation
Parties can seek to vary a maintenance order when there has been a material change in circumstances. However, each application is case-specific, and the court considers a range of factors when determining whether an adjustment is warranted. Some of the most common reasons for requesting a variation include:
1. Changes in Income and Financial Resources
One of the primary reasons for seeking to vary maintenance is a significant increase or decrease in income. If the paying party (the payer) experiences financial hardship, such as redundancy, serious illness, or a decline in business earnings, they may seek to reduce or suspend payments. Conversely, if the receiving party’s (the payee’s) financial position improves—perhaps due to a higher-paying job, a substantial inheritance, or other sources of financial support—the payer may argue that maintenance should be reduced or stopped altogether.
2. Remarriage or Cohabitation of the Payee
Spousal maintenance automatically ceases if the payee remarries or enters a new civil partnership. However, cohabitation with a new partner does not automatically terminate maintenance but can justify an application for variation. A key consideration is whether the payee’s financial needs have changed because of the new relationship. If the new partner is financially contributing towards household expenses, this could justify a reduction in the maintenance payments.
3. Retirement of the Payer
Retirement, whether anticipated or early due to ill health, is another circumstance that may justify varying maintenance. If the payer relies on employment income to meet their obligations, retirement may significantly reduce available financial resources. Courts assess the fairness of continuing payments in light of pension income and other assets. However, the payer must demonstrate that the decision to retire is reasonable and not an attempt to evade financial responsibilities.
4. Changes in the Payee’s Needs
If the payee’s financial needs increase due to unforeseen circumstances—such as health issues, higher living costs, or the need to support dependent children—they may seek an upward variation of maintenance. The burden falls on the applicant to justify why additional support is necessary and fair in the given circumstances.
5. Financial Dependency of Children
Maintenance orders that include provisions for children can also be varied due to changes in the children’s needs. Increased education costs, medical expenses, or other essential expenditures might justify an increase in payments. Conversely, if the costs of supporting a child reduce over time—perhaps due to government benefits, contributions from the other parent, or the child becoming financially independent—the payer may seek a reduction.
The Court’s Approach to Variation Applications
Courts do not automatically grant variations; each application is carefully scrutinised. The overriding principle in financial provision cases is fairness, balanced against the need for financial independence over time. Some of the key factors courts consider include:
– The original order and the rationale behind it – Courts examine the reasoning behind the original order to determine whether the financial obligations agreed upon remain appropriate.
– Current income, financial needs, and obligations – Both parties’ financial circumstances, including earnings, other sources of income, and liabilities, are taken into account.
– Future earning potential – If either party has reasonable prospects of improving their financial circumstances through employment or investment, this may influence the decision.
– Length of time since the original order – Courts may be less inclined to continue maintenance indefinitely if significant time has passed, particularly where the recipient has had opportunities to become financially independent.
Unlike the initial financial remedy hearings in divorce proceedings, variation applications assess current circumstances rather than past financial conduct. However, if it is evident that a party has deliberately manipulated their financial situation—such as quitting a well-paid job to reduce maintenance—courts may take a dim view of the applicant’s request.
The Process for Applying to Vary a Maintenance Order
The process of varying a maintenance order generally involves the following steps:
1. Attempting Negotiation and Mediation
Before applying to the court, parties are encouraged to resolve financial disputes amicably through negotiation or mediation. Family mediation services can assist in reaching a mutually acceptable revised arrangement.
2. Making a Formal Application
If mediation fails or is unsuitable, an application to vary the maintenance order must be made to the family court. The applicant submits a Form A to request financial relief, specifying that they wish to vary an existing order. The court will then set a timetable for the proceedings.
3. Financial Disclosure
As in the initial financial remedy proceedings, both parties must provide full financial disclosure to ensure the court has accurate information regarding income, assets, and expenses. This typically involves completing Form E, a detailed financial statement.
4. Court Hearings
In most cases, there will be a series of hearings:
– First Directions Appointment (FDA) – The judge considers what additional financial information is needed and whether matters can be resolved by agreement.
– Financial Dispute Resolution (FDR) Hearing – This encourages parties to negotiate with the judge providing guidance on a likely outcome. If an agreement is reached, it can be made into a court order.
– Final Hearing – If no settlement is reached, a final hearing takes place, where both parties present their arguments, and the judge makes a binding decision.
Potential Outcomes of a Variation Application
Depending on the circumstances, the court may decide to:
– Increase or decrease the payments – Adjustments can be made to reflect changing financial needs and resources.
– Suspend the payments – This might be temporary, such as in cases of short-term financial difficulty, or permanent if justified.
– Terminate the maintenance order – If the court determines that ongoing financial support is no longer necessary, it may bring payments to an end.
– Impose a clean break – In some cases, the court may seize the opportunity to impose a clean break by capitalising maintenance payments in a lump sum, preventing future claims.
Key Considerations for Both Parties
Navigating the variation process requires careful planning and realistic expectations. For the applicant, providing robust financial evidence is crucial in persuading the court that the change sought is necessary. Credibility plays a significant role; courts are reluctant to accept unsupported claims of financial hardship or need.
For the responding party, understanding their legal rights is essential. If opposing a reduction, they must demonstrate why continued payments are still fair. Equally, if they are the recipient and face a request for termination, proving financial dependency may prevent an unfavourable outcome.
Both parties should also consider legal costs. Court proceedings can be expensive, and if unsuccessful, the applicant may end up covering part of the other party’s costs. Alternative dispute resolution methods, such as mediation, may provide a more cost-effective solution.
Conclusion
The law of England & Wales recognises that financial circumstances change and provides a mechanism to revisit maintenance orders to ensure fairness. Variation applications depend on evidence of material change and require careful scrutiny by the court. Whether seeking an increase, reduction, or termination, parties should approach the process with preparation, negotiation, and, if necessary, legal guidance to secure a just outcome.