When you decide to separate from your spouse, financial concerns can add to the stress of the situation. Especially when one spouse has been the homemaker and the other the primary earner.

However, you may be eligible for spousal maintenance or an early or partial property settlement also referred to as interim property settlement, based on your financial circumstances and your ex-spouse's situation.

What is spousal maintenace

Spousal maintenance is financial support paid by one spouse for the upkeep and maintenance of the other spouse and is separate from child support payment.

To know whether you are eligible to pay spousal maintenance or receive maintenance from your ex, you must answer yes to the two questions below to pass the "threshold test" to qualify for spousal maintenance:

1. Firstly, can I adequately support myself without an income-tested pension?2. Secondly, does my ex-spouse have the means and financial capacity to support me?

Spousal maintenance aims to offer ongoing financial support to a spouse or partner who cannot cover their reasonable expenses with their income or resources. It is distinct from property settlement, which pertains to dividing assets between former spouses or partners.

What orders can I seek to alleviate my financial hardships if I do not receive spousal maintenance?

Spousal maintenance and partial or interim property settlement are both options for individuals going through financial hardship as a result of separation and can be negotiated to address the cash strapped spouse’s financial needs pending final resolution of the parties property settlement. 

Spousal maintenance limits the entitlement of the recipient spouse to the financial capacity of the liable spouse. However, with partial property settlement the entitlement of the recipient spouse is considered against the value of the estate and her likely entitlement at the end of the matter.

To obtain partial property settlement order from the Court, the Court must determine that it is in the "interests of justice" to do so. The Court will need to find that the amount granted in the interim property settlement is ultimately within the expected range the party requesting a partial property settlement will receive and that there are sufficient funds in the asset pool to satisfy any order for final property settlement.

Unlike spousal maintenance, the Court is likely to 'add back' any partial property settlement at the final hearing. This essentially means that when the Court reaches a final decision on how to divide your assets, it treats the funds from the partial property settlement as if you have already received them. The practical consequence is that the Court subtracts the interim property settlement from the amount you would have otherwise received in the final settlement, had the partial property settlement not occurred.

Spousal Maintenance and Interim Property Settlement - which order to seek pending a final hearing, when my ex has substantial savings?

In many cases, one party may find themselves without access to funds, even though substantial savings are available in the bank or assets can be liquidated. In such circumstances, our experienced family lawyers can assist you identify which orders are most suitable in your circumstances.

New South Lawyers’ communications are intended to provide commentary and general information. To that end, people should not rely on this communication as legal advice. Accordingly, they should seek formal legal advice for matters of interest arising from this communication.

To find out more, chat with a member of the New South Lawyers Family Law Team today.