Nominal spousal maintenance & coronavirus
After the loosening of the coronavirus restrictions over the summer, successful vaccine roll-out and declining numbers of covid-related deaths, you could be forgiven for hoping we were through the worst of it. Like most people, my heart sank when I read about the ’Omicron’ variant of the virus now in the UK. It made me think, both personally and professionally, that the impact of coronavirus is far from over.
One case which I have found particularly interesting over the last year is that of AJC v PJP [2021].
What is a Nominal Spousal Maintenance Order?
Before going on to discuss this case, it is important to understand what a nominal spousal maintenance order is.
In simple terms, it is when one party (the payer) agrees to pay the other (the payee) a very small amount of spousal maintenance each year; for instance, £1 per annum. These orders tend to arise in circumstances when the payee has young children and has typically undertaken most of the caregiving.
Whether the money is actually paid is relatively insignificant, it is the legal mechanism which is important. The nominal order means that there is not a clean-break in relation to the payer’s income. As such, in certain circumstances, the nominal spousal maintenance order can be activated and become a substantive spousal maintenance order.
In the case of AJC v PJP [2021] an application for a nominal spousal maintenance order to be ‘activated’ was made so as to become a substantive maintenance order.
What circumstances will ‘reactivate’ a Nominal Spousal Maintenance Order?
Generally speaking, reactivation of nominal spousal maintenance orders are quite rare; there has to be a significant change in circumstances and usually only where the payee is experiencing financial hardship.
However, the case of AJC v PJP looks at this issue in the context of the coronavirus pandemic.
Facts of the case
The Wife was a pilot, aged 53.
The Husband worked in car sales and was aged 57.
The Wife lost her income as a result of the coronavirus pandemic; although hoped to be able to regain employment within around 12 months. She sought to reactivate a nominal spousal maintenance order which was agreed in their divorce in 2012.
The Husband also suggested his income had been affected. He contended that after paying to support the children and his mortgage, he did not have a substantial amount left for living expenses.
Question for the Court
The Judge had to consider whether the purpose of a nominal spousal maintenance order could be to provide an emergency fund many years after the divorce, and, at a time of global crisis.
Decision
The Wife’s application was unsuccessful. The Husband had never paid maintenance and was also being impacted financially.
What was particularly important about the decision was that it was noted that unexpected life events can occur and when those arise (or are compounded by) what happened during the marriage, the reactivation of a nominal spousal maintenance order may be justified. However, unemployment due to the pandemic was not a disadvantage which was generated by the relationship.
Conclusion
I think Nominal Spousal Maintenance Orders will still be important in certain cases, but the court are encouraging the financially weaker party to stand on their own two feet. As such, the application of a Nominal Spousal Maintenance Order must be considered carefully. It should not be assumed to be an automatic safety net to cover whatever life throws at you and it is only likely to be relevant if there are significant changes in circumstances.
In summary then when couple’s decide to separate it is crucially important that their team include not only a lawyer to actually to deal with the divorce but a finance team as well who can advise on what the financial implications will be for those involved both now and in the future.
If you are considering divorce we have both the lawyers and the financial planning experts skilled in divorce financial planning to ensure you are fully aware of your options to help you develop a long-term strategic financial plan and ultimately achieve the best possible divorce settlement for you.