Court orders
The County Court can make various Orders on divorce. These are set out in Section 25 of the Matrimonial Causes Act 1973 and broadly comprise:
- Income Orders
- Capital Orders
- Pension Orders
In more detail these are:
Income Orders – Maintenance Pending Suit
This is an Order whereby one spouse is ordered to make a regular maintenance payment to the other until such time as the divorce and financial arrangements are finalised. The application cannot be made prior to the divorce petition being issued.
Periodical Payments
This is an Order that one spouse makes regular payments to the other for either a specific period time, or for the rest of that person’s life time. These payments can be index linked and in any event would terminate on the remarriage of the recipient.
Secured Periodical Payments
These periodical payments are more unusual and generally are only ordered where the payer’s income fluctuates or it is anticipated that there might be problems enforcing a periodical payments order in event of default. Secured periodical payments order means that an asset belonging to the payer is charged in order to make sure that there is some protection for the recipient.
Capital Orders – Lump Sum Orders
This is an order whereby one spouse pays a cash lump sum to the other.
Property Adjustment Orders
This is an order whereby property/ies is/are transferred from one spouse to the other either from joint names into the sole name of one spouse or from the sole name of one spouse to the other. The order can specify on what terms any of the above transactions are made and in what time frame.
Order for Sale
The Court is able to order that a property is sold and, again, will have the capacity to detail how the proceeds of sale will be divided.
Pension Orders
Often a pension can be the most significant asset that a couple own. The pension scheme’s cash equivalent transfer value (CETV) is currently used to determine the value of the pension. However, the CETV of a pension is not the same as cash and cannot be equated to cash or money held in a property. The administration of pension schemes is a very complicated area and therefore often requires specialist pension advice to deal with the arrangements.
The Court has the power to make three orders in relation to pensions which are:
- Offsetting – means that one party is compensated for their loss of pension rights by giving them a larger share of the other assets
- Earmarking – is a provision whereby the pension remains in one party’s name but part of it is ring fenced for the other. Once the pension becomes payable the other party will receive some of the payment. One of the main disadvantages with earmarking is that the pension is dependent on one person’s pension rights. They are, therefore, able to make decisions about when the pension will be drawn and in the event of their death the pension will die with them
- Pension Sharing – is only available where divorce proceedings commenced after 1 December 2000. This is where one person’s pension is effectively shared and transferred into the other party’s name therefore creating an entirely separate pension fund.
What factors does the Court take into account in determining how the finances should be resolved?
The Court will consider all of the circumstances of the individual case and will also take into account the statutory criteris set out at section 25 of the Matrimonial Causes Act 1973. No two cases are ever the same which is why it is so difficult to have a formulaic approach to finances on divorce. Our team will ensure that full details of your specific circumstances are taken and will explain which of the section 25 criteris may be of particular relevance in your case.
What factors does the Court take into account in determining how the finances should be resolved?
Click here to see the section 25 factors.
The contents of this fact sheet are general principles and do not constitute legal advice. Every case is different and you should seek independent legal advice in relation to your specific circumstances.