29 November 2012
Family Law Solicitor Cara Nuttall on how lack of employment adds to the financial difficulties between separated spouses
Many newspapers are leading today with the news that around 3 million (or 1 in 10 workers) are underemployed. The problem of underemployment, and people not achieving their full earning capacity, is one which has been causing complications in finalising financial settlements throughout the economic downturn. When looking at the issue of how income is to be distributed between spouses, the court has to consider not only what each is earning now, but also what they can reasonably be expected to earn in the future, and for how long it is appropriate for them to remain inter-dependant by way of spousal Maintenance payments.
Whilst this always entails an element of crystal ball gazing, current employment conditions make this more difficult still, as whilst a spouse may have a healthy earning capacity as a qualified professional on paper, there can be no guarantee that they will be able to reach that potential with a full-time position. The court therefore has to balance the presumption that a Divorced spouse should stand on their own feet financially, so far as is reasonable in the circumstances, with the risk that making an order which anticipates they will find work at a level for which they are fully qualified will leave them in a position of financial hardship, if such work does not come along. Inevitably, it seems that having to make a 'best guess' in cases where so many people in the country are not earning what they could be, will lead to an increase of variation applications in the future, as people find that an order made in contemplation of seeing the parties fairly through predicted future events is no longer appropriate, due to significantly higher or lower earnings than the court contemplated at the time the original order was made. Such proceedings can, however, often be costly. Given the complexities involved in calculating maintenance payments, it is always advisable to seek expert advice. This can help not only to find an appropriate solution for the immediate circumstances, but also come up with creative solutions, to try and factor in the uncertainty of the current economic climate and so avoid the need for costly and stressful proceedings again further down the line.
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