Mind the Gap! How to narrow the disparity between income and outgoings after a financial settlement on divorce

The BBC reported on 16 February 2022 that inflation is rising faster than at any time in the past 30 years and wages are failing to keep up.

According to the BBC, in the 12 months to January, prices rose by 5.5% on average with warnings that inflation could rise above 7% this year.  This of course puts enormous pressure on household finances when the cost of outgoings increases, without a corresponding increase in income.

Within divorce and financial proceedings it is still common for one spouse to pay ongoing maintenance to the other.  Generally that is to meet the gap between the lower earner’s income and their outgoings.  But what happens when that gap widens, as is going to be the case for many families now?

If you find yourself in this position then the first step is to look back at the terms of the financial order that was made on your divorce. Very often there will be an automatic annual variation based either on the retail price index (RPI) or the consumer price index (CPI) so that maintenance can keep up with the cost of living.  So there will be a clause within the order setting out that every year in the same month, the maintenance will be varied automatically to keep pace with inflation.  Older orders tend to use the RPI and more modern orders tend to use the CPI, but generally the RPI tends to be more generous as it takes into account costs such as mortgage interest costs and house prices.

If you have a spousal maintenance order with an automatic variation then all you need to do is to inform the paying party that they need to increase their payments.

Often however it is the case that the paying party does not increase the payments and the receiving party prefers not to insist upon it for fear of rocking the boat.  It is however part of the Court Order, and can be enforced as such.  If you have any difficulties then it is worth discussing these with a solicitor.

Even if you do not have an automatic variation clause, it is still possible to increase the maintenance payments.  The first step then is to speak to the paying party and explain any difficulties and ask if they will agree to increase the payment.  If not then it might be worth attending mediation to see whether an agreement can be reached that way.  If that fails then it is possible to apply to the Court to vary the maintenance upwards to meet any shortfall.  The Court will then consider all the circumstances of the case, but there would need to be some change in circumstances from the original proceedings.  The application is mostly not without risk but can often be worthwhile, with good advice.

To discuss this, or any other Family Law related matter, please contact Ellie directly on 01483 887766, email info@hartbrown.co.uk or start a live chat today.

*This is not legal advice; it is intended to provide information of general interest about current legal issues.

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Ellie Newbery

Consultant, Family Law

Ellie’s strength lies in her clear, sensible and collaborative approach to gain the best outcomes for her clients and their families. Ellie advises clients on...

Ellie Newbery- Family Law

Consultant, Family Law

Ellie Newbery

Ellie’s strength lies in her clear, sensible and collaborative approach to gain the best outcomes for her clients and their families.

Ellie advises clients on the best route to reach agreement on the decisions that need to be made on divorce, matrimonial finance and children. Her main focus area lies in divorce and complex financial remedy cases, for high-net-worth and middle-income clients. She has previously been accredited Resolution Accredited Specialist in this area, as well as in Private Law Children work achieving an award for highest marks in the country in her core paper.

Ellie acts for parents in private law applications and negotiations across issues including child arrangements, change of school, removal from the jurisdiction and parental responsibility. She assists clients in resolving disputes about where the children will live and who they will spend time with. Ellie also assists unmarried separating couples.

Ellie qualified as a family solicitor in 2008 after reading history at Durham University and worked in Kent, Surrey and London before joining Hart Brown in 2021. Ellie has been a member of the Surrey Resolution Committee since 2015.