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What are we each entitled to in our divorce settlement?

What does the law say about how to split the house, how to share pensions and other assets, and how much maintenance is payable.

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Spousal Maintenance

  • ExH2B
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09 Jul 21 - 09 Jul 21 #517214 by ExH2B
Topic started by ExH2B
I'm getting conflicting advice on whether I would need to pay spousal maintenance, for how long and how much and I would be grateful for some guidance. I understand that there is no fixed formula but our circumstances would suggest I might have to hand over more than half of my income to my ex in child and spousal maintenance. I'll lay out the circumstances and try and be as fair to both myself and my ex as hopefully we'll get this done amicably in mediation (although it won't stay amicable for long if she gets more than half my income!)

We've been married for just under 10 years and we have three children aged 9, 6 and 4. We are both in our late 30s.

There are not many current assets in the marriage. Combined home equity, vehicles, chattels and jewellery net of mortgage and unsecured debt comes to around £90k. Unsecured debt was taken out to purchase a luxury vehicle for ex and I'm assuming it will be reasonable to sell it and buy something that meets needs rather than wants. I'm anticipating a split of current assets of about 65/35.

There is also a pension, all in my name, that will presumably be split 50/50. That is worth around £180k.

Now, on to income. I earn £71k basic, get around £5k in bonuses and do a second job on ad hoc short term contracts that generates about £5k income a year. (If I can't agree with my ex that the proceeds of my second job can go 100% into my pension then I'll simply stop doing it because I don't see the point in giving up my leisure time to do a job that pays 42% to the tax man and 25% to her!) I established my career before we married and before children.

My ex is a stay at home parent and has been since 2012. Before that she held a series of menial jobs and has never had what could be defined as a career. She is currently bank staff for a large organisation and earns about £250 a month from this. Her hourly rate would suggest an annual income potential of around £22k full time.

After divorce, my ex can claim child benefit. She is also eligible for universal credit. Combined with her income as bank staff this would bring in around £1.6k a month. My net income meanwhile is £4.1k per month although after pension contributions this is closer to £3.8k. I would need to pay £750 per month child maintenance on a 5/2 split so my income will be about £3k whereas hers would be £2.35k.

I believe I have higher income needs than my ex as my commute costs £600 per month and also if she gets the lion's share of net current assets I will first have to rent and then pay a much higher mortgage. Also, it is my understanding that my ex will be expected to maximise her income and estimate she should be able to get up to £2.8k by 2023 after completing some retraining that she began 2 years ago.

As she would currently get universal credit of over £1k, I would have to pay at least this amount in SM for her to still be on £2.35k but my income would reduce to around £2k and I would still have to cover my commute (£600), reasonable rent (£800 in my area for a 2 bed flat necessary to accommodate children), utilities, food, internet as I work from home 2 days a week and I would also have to refurnish as she would keep most of the assets. My concern is that I could end up in a position where not only have I given her more than half the assets but also more than half my income too and despite being the responsible one in the relationship who has always worked hard to provide, I will actually reach my late 50s poorer than her (please no posts about how SAHM is an equal job. I don't disagree with you, without going into much detail I just question whether she ever did the job properly as through lockdown she spent all her time sat on her backside playing games on her phone whilst I did all the homeschooling whilst having to fit in a full time job).

Would it be likely I would have to pay SM in this scenario? Or if I did, would a split of capital in her favour be sufficient to dismiss these claims?
Last edit: 09 Jul 21 by ExH2B.

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09 Jul 21 #517215 by WYSPECIAL
Reply from WYSPECIAL
Spousal maintenance is based upon need of recipient and ability to pay of payer.

How much spare cash is there after you have paid child maintenance and reasonable living costs?

Does she still have a need after taking into account all income streams?

She will be expected to maximise her income but unlikely to be expected to work full time with a four year old.

It would have made sense for her to claim child benefit while you were together to get the NI credits

  • ExH2B
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09 Jul 21 #517219 by ExH2B
Reply from ExH2B
I think she would have a hard time proving she needed it and a harder time still proving I could afford it in a way that made any difference.

Currently, after pension contributions and some other in work benefits like life insurance that I would carry on paying anyway, we live on £3.7k a month. Her adjusted salary would be £2.35k but with all the children in primary school she as I understand it she would be expected to work 16 hours a week to maximise her earning capacity. This would increase her income to around £2.7k a month, £1k down on what we live on together.

As I have a commute cost of £600 a month on our joint budget of £3.7k I don't think it is going to be particularly hard to point out that I have also needed around £400 of that joint money for my mobile, food, higher utility usage, some discretionary income of my own and my share of holidays. All things that she cannot argue remain as costs to the household when I am not here. So if her needs are greater than £2.7k, then that doesn't add up!

I don't think I could afford it either. If she's going to keep most of the home equity then I don't think it's unreasonable of me to expect to be able to match her housing costs of £1.2k a month. Utilities including internet £120, food £300, commute £600, mobile £20, clothes £50, some leisure spending of around £150 that would match her budget. By then I'm up to £2.4k or thereabouts leaving about £650. If I gave her £650 she would just lose £650 in UC and also I don't think she would be able to prove a need.

Two questions though:

1) If she keeps the home equity and I have to rent for a while, does the court take into account any right of the stronger party to "catch up" in terms of wealth? My concern is that there seems to be a division of assets that is very favourable to the poorer spouse but then also maintenance on "needs" that are generously interpreted. There doesn't seem to be any priority for the financially stronger spouse to save for a deposit on a house if there share of the assets is insufficient but doesn't this lead to outcomes that are not equitable?

2) There seems to be a cliff edge in maintenance. The income of my ex will start dropping when my eldest is 18 in 2030 and all child maintenance will stop when my youngest turns 18 in 2035.

Provided I offer shared care with 50/50 custody (that I am well placed to do as I can work flexibly and from home some days of the week) in the intervening 14 years (whether or not it is accepted) can I safely assume that the courts will expect my degree educated wife to have become self sufficient by 2035? My concern is that when the children are all grown up and she only has her salary to live on, she'll pursue me for spousal maintenance then even though by then we'll have been divorced longer than we were married.

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