SPOUSAL MAINTENANCE REBUTS THE NEED FOR A ‘FINANCIAL BUFFER’ Simpkin [2020] FamCAFC 319

Spousal Maintenance Rebuts the need for a 'Financial Buffer' - Simpkin [2020] FamCAFC 319

Spousal maintenance is financial support that is paid to a party of a marriage by their spouse and it can be paid either as a lump sum or a periodic payment.

There are two principles which must be satisfied to obtain a court order for spousal maintenance, namely:

the party seeking maintenance has financial need to the extent that they are unable to meet their own living expenses; and
the other party has the financial capacity to support the living expenses of the party seeking spousal maintenance.

The case of Simpkin [2020] FamCAFC 319 ("Simpkin") involved a Wife, who medically retired from work in 2003 and has subsequently relied on the Disability Support Pension. In contrast, the Husband was employed in a managerial position and received an annual salary of $240,000 plus additional bonuses in the sum of $160,000.

Interim Orders were made in the Federal Circuit Court of Australia for the Wife to receive spousal maintenance in the sum of $750 per week in addition to a one-off lump sum payment in the sum of $10,000. The Wife however filed an appeal in the Family Court of Australia, seeking an increase in her periodic interim spousal maintenance payment to $1,378 per week.

The Wife argued that the Trial Judge had failed to correctly calculate the Husband’s expenses, particularly by affording the Husband with “some form of financial buffer” for “the vicissitudes of life”, which contained uncertainty and expenses that fluctuate from time-to-time. The Trial Judge formulated this view in the context of the Husband previously being made redundant by his former employer.

However, in the appeal, the Wife cited Section 83 of the Family Law Act 1975, which provides the Husband with relief to vary or discharge any spousal maintenance order should his financial circumstances change. Ryan J concurred that the Trial Judge had failed to consider Section 83 of the Family Law Act in assessing the Husband’s capacity to pay spousal maintenance.

In light of Section 83 Family Law Act, the Wife’s appeal was upheld. It was calculated that the Husband had a surplus of $1,327 per week from his income after payment of his expenses, which excluded the Husband’s bonuses from his employment. Therefore, the Wife’s periodic spousal maintenance payment was to increase from $750 per week to $1,327 per week.

It is also notable that the Wife had assets comprising of savings and shares of approximately $17,000, as well as superannuation valued at $560,000. Despite the Wife having access to these assets, the Court took the view that it is not appropriate for the Wife to choose between forgoing her reasonable needs or drawing from her superannuation.

Ultimately, the case of Simpkin is a contemporary reminder that spousal maintenance will not be reduced on the basis of uncertainty or expenses which may fluctuate. Spousal maintenance can also be sought and obtained by a party notwithstanding their assets or superannuation entitlements. It is therefore prudent to consider the income and expenses of the parties in assessing whether a spousal maintenance claim will be successful.