In June 2016 the Family Justice Council published its ‘Guidance on Financial Needs on Divorce‘ which follows on from the Law Commission’s 2014 report on matrimonial property, needs and agreements. The publication deals primarily with two principles – what are needs and what level should they be met and also the duration of any spousal maintenance for the receiving party to transition to independence.
Dealing with each point in turn, historically, following the case of White v White  needs was defined as ‘reasonable requirements’ but this has since been superseded by the requirement to assess financial needs based upon the available assets and income in the marriage together with the standard of living during the marriage prior to the breakdown. It remains generally accepted that the standard of living should be maintained as best as possible bearing in mind each individual’s own income and housing post-separation. It would be detrimental for a party to have a sudden and dramatic drop in lifestyle as a result of the separation and divorce, although the financial needs publication accepts that in cases where there are little or no assets, this may be unavoidable.
The financial needs guidance also sets out that where there are modest resources available to a marriage, then the needs of the children may predominate. The weight of the standard of living and lifestyle enjoyed during the marriage is heavier where the marriage is long in length i.e. the longer the marriage, the more important it will be for the court to try to maintain the lifestyle during the marriage.
When considering the duration of spousal maintenance, the guidance has been particularly helpful. The court should always consider making an order for spousal maintenance only for as long as it takes for the receiving party to gain financial independence, however, termination of such maintenance should only occur provided that the receiving party will not suffer undue hardship and that the termination of such maintenance should not be replaced in favour of achieving a fair result.
Conversely, when considering whether to make a spousal maintenance for the joint lives of the parties, the court must have regard to the following of the parties:
- health and mobility
- work experience
- length of unemployment
- opportunity to acquire new skills or refine existing ones
- costs and availability of retraining
- childcare commitments and routine
- age, health and needs of children or dependants
- childcare costs
- realistic level of financial remuneration
- state benefits availability
- net financial gain
- pension sharing if any, to take into account future needs
- compatibility of working whilst caring for children
- earning capacity in view of the length of the marriage and the paying party’s ability to pay
Financial remedy proceedings can be (and often are) highly complicated. If you would like to speak to a qualified solicitor who specialises in divorce and finances cases, then please contact us on 01234 889777 for a free consultation.