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When you are finalising a maintenance agreement because you are getting divorced or exiting a long-term relationship, you need to consider the following factors:
. Your living costs are going to increase each year because of inflation. Maintenance agreements usually include a clause stating that the monthly maintenance payment will increase by the percentage change in the consumer price index (CPI), which is currently at 6.3%.
. The age of your children at the time of finalising the maintenance agreement is also a factor. For example, if you have a three-year-old, don’t forget that their education costs are going to increase once they start attending school. You should also include a clause about how tertiary education may be funded and who is expected to save towards this, if either of you are in a position to do so.
. Your agreement can stipulate maintenance until the age of 18, when your child reaches the age of majority, or you can stipulate a later age, such as 24, so that you take into account the period during which your child may be studying and will still require financial support.
However, the onus then falls on your child to directly claim the maintenance payment from the parent who does not provide the primary residence.
. Your own age will come into play. Kristy Giva Knill, director and head of the family law department at McLoughlin Clark Attorneys, says that, for example, you must consider how long you will be able to work before retirement.
“Or if you have not worked throughout the relationship, then you must consider whether you will be able to obtain gainful employment in the future and how long it will take to do so, or whether you are a candidate for lifelong maintenance, which means your partner will have to ‘maintain’ you until your death or remarriage,” she says.
. Your monthly expenses, including that of your children, need to be taken into account. Knill says you should prepare a comprehensive and realistic expense schedule so that you know what your actual monthly costs are.
“Only once this has been done can you negotiate from a position of strength,” she says.
WHO SHOULD YOU APPROACH FOR HELP?
It is crucial to remember that your maintenance agreement will generally be pertinent to your life for a considerable period of time – for some, it will ensue for the remainder of their life.
In light of this, you should take the time to consult one or more of the following specialists to help you negotiate this agreement:
. An experienced attorney who specialises in this area of law.
. A financial adviser or actuary who will consider your life expectancy and your future maintenance needs.
Your financial adviser should be consulted anyway, as your financial needs and goals will have changed when you got divorced.
The adviser will also help you navigate the tricky aspects of revising your will and reviewing the beneficiary nominations on your life insurance policy.
. An industrial psychologist to assess your employability in the workplace if you have been out of employment for some time.
Knill says once your maintenance agreement has been finalised, signed off and made an order of the court, it is imperative that you keep to the terms in the agreement and ensure the other party also does so.
If your former spouse/partner fails to comply with the terms of the court order, you have to approach an attorney or the court for assistance in enforcing the maintenance order.
“It is not advisable to sit back and allow the noncompliance to continue for years before you seek advice on how to enforce your agreement. In other words, the sooner you seek assistance in this regard, the better. Maintenance officers at the maintenance courts are trained to assist unrepresented applicants and are generally helpful,” she says.
“All good maintenance agreements include an annual escalation and it is most common to find that this is linked to the CPI, which measures changes in the price level of a market basket of consumer goods and services purchased by households. However, you can also find that an agreement may put the increase at a set percentage – for example, 10% escalation a year.”
WHAT HAPPENS WHEN THINGS CHANGE?
Just as you review your financial plan each year to take into account any changes in your life, you also need to revisit your maintenance plan each year.
If, for example, you lose your job, you have every right to approach the maintenance court for an increase in your maintenance.
However, you will have to provide the court with evidence that you are no longer employed and supply the reason for your unemployment.
It would most likely be considered unreasonable if you simply quit your job to claim more maintenance.
The court would also consider whether you have any other source of income and will ask you for a list of your current expenses.
Knill cautions that the court will not automatically order an increase in your maintenance – first your former spouse or partner’s financial situation will be taken into consideration, and the court will have to consider whether they are actually able to afford to increase the monthly maintenance that they are paying.
QUICK TIPS
. Be aware of the renewal date on your maintenance order as it may not always coincide with the date of your actual divorce. This also means you will be aware of when the annual increase will kick in.
. The onus is on you to remind the person paying maintenance of an increase at least a month before the annual increase is due. As with everything else to do with divorce, make sure this reminder is in writing so that you have a record.
