Basics

The Court's powers to deal with financial issues on divorce/dissolution are to be found in the Matrimonial Causes Act 1973.  The types of Orders available generally fall into 2 categories, namely income and capital Orders.

Income Orders deal with maintenance (now known as periodical payments) and include the power to Order maintenance while the matter is ongoing and for any maintenance to be secured to ensure payment.

Capital Orders include the power to Order payment of lump sums, transfer ownership of property or require this to be sold and to deal with pensions.

How the Court decides to distribute the assets is a balancing exercise where the following criteria have to be considered:

  • the welfare while a minor of any child of the family who has not attained the age of 18;
  • income;
  • earning capacity;
  • property;
  • other financial resources;
  • financial needs, obligations and responsibilities;
  • standard of living;
  • the parties ages and the length of the marriage;
  • any disability suffered;
  • contributions;
  • the education any child was receiving;
  • conduct which it would be inequitable to disregard; and
  • any financial benefit from the marriage/partnership which has been lost.

The objective is to achieve a "fair outcome" between the parties taking into account needs, compensation and sharing.  Sometimes this requires one or other party to continue to financially support the other and/or not to receive any capital until the children have grown up and their home can be sold.

Generally the determining factor will be the parties' resources, income and capital.  The first consideration is to ensure any children have a roof over their heads.  Where finances are limited needs may also be split out into essential needs and other needs.  The essential needs are then treated with greater weight.

A new partner or spouse does not automatically adopt financial responsibilities for the family of the other person.  However, their contribution to the outgoings is usually regarded as freeing up further income to be redistributed.  Conversely a new partner/spouse and/or children may increase a party's financial responsibilities.

The Court is only required to take into account the length of marriage, but can take account of the overall length of time the parties lived together.

When looking at the financial issues the Court has to consider whether a clean break would be appropriate to bring the parties' financial responsibility towards each other to an end. A clean break is not prevented between the parties despite the fact that there are children, although it is common to keep a nominal ongoing maintenance obligation in place to allow the matter to go back to Court in future if required.

A spouse/civil partner who is not divorcing/dissolving can still apply to either the County Court or Family Proceedings Court for maintenance and/or a lump sum.

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