Redundancy and Divorce: Maintenance and Financial Settlements

Redundancy and divorce can both be challenging. If your ex-spouse has been made redundant, you may be concerned how this may impact on the financial arrangements made during your divorce. Redundancy can affect things such as spousal maintenance and child maintenance and this article outlines some of the steps you can take.

Spousal maintenance is a form of regular payment made by one spouse to the other following a divorce, with these payments typically set out in a financial order detailing the wider settlement. They often continue until a specific date or event occurs, such as the end of a child’s secondary education or completion of training.

If your ex-spouse experiences a change in their financial circumstances due to redundancy, it may be necessary to change the payments that are made. Although redundancy does not automatically trigger a change in spousal maintenance, both parties should try and communicate openly about the new circumstances and consider the available options.

You and your former spouse can attempt to agree on temporary or permanent adjustments to payments. You may wish to consider using mediation or some other form of non-court based dispute resolution to help resolve disputes without court intervention, which can often be disproportionately costly and slow in relation to the circumstances before the parties. If this is not possible, either party can apply to court to vary the spousal maintenance order. The court will assess the paying party’s new financial situation and determine whether the current arrangement is still fair.

Payments may be ordered but no longer being met due to redundancy of the paying party. If you wish to enforce the existing payments, advice from a specialist solicitor should be obtained, given the implications and time limitations surrounding such enforcement.

Spousal maintenance is a form of regular payment made by one spouse to the other following a divorce, with these payments typically set out in a financial order detailing the wider settlement. They often continue until a specific date or event occurs, such as the end of a child’s secondary education or completion of training.

If your ex-spouse experiences a change in their financial circumstances due to redundancy, it may be necessary to change the payments that are made. Although redundancy does not automatically trigger a change in spousal maintenance, both parties should try and communicate openly about the new circumstances and consider the available options.

You and your former spouse can attempt to agree on temporary or permanent adjustments to payments. You may wish to consider using mediation or some other form of non-court based dispute resolution to help resolve disputes without court intervention, which can often be disproportionately costly and slow in relation to the circumstances before the parties. If this is not possible, either party can apply to court to vary the spousal maintenance order. The court will assess the paying party’s new financial situation and determine whether the current arrangement is still fair.

Payments may be ordered but no longer being met due to redundancy of the paying party. If you wish to enforce the existing payments, advice from a specialist solicitor should be obtained, given the implications and time limitations surrounding such enforcement.

Child maintenance is governed by the Child Maintenance Service (CMS). Unlike spousal maintenance, child maintenance payments can be recalculated annually or when the paying parent’s income significantly changes – such as when being made redundant. Under the 2012 Regulations, the CMS will only review and adjust payments if the paying parent’s income decreases by 25% or more. If this threshold is met, the paying parent must inform the CMS within 14 days of the change. The revised child maintenance payments will continue until the payments are reviewed again, either following the annual review or because their salary has increased by the 25% margin again.

If your financial settlement included a lump-sum payment, redundancy may not directly impact this unless the payment was scheduled in instalments and the paying party’s financial ability changes. If instalment payments are missed, you may need to apply to court to enforce or vary the order.

Pension sharing orders are unlikely to be affected by redundancy. However, it may well be the case that the pension contributions of the paying party will be reduced, affecting the long-term pension value.

Redundancy may lead to difficulty maintaining mortgage payments or other financial commitments outlined in the divorce settlement. Consider discussing the situation with your ex-spouse and look at the idea of possible adjustments to payments. If this is not possible, speak to a family lawyer to learn more about the options open to you. This could include using mediation to help resolve disputes efficiently and amicably or, if no agreement can be reached, applying to the court to vary the financial order.

Redundancy can affect things such as spousal maintenance, child maintenance, and other financial arrangements. If you have concerns about the impact of your ex’s redundancy on your financial arrangements, speak to a family law specialist for advice and support. Whether through negotiation, mediation, or court intervention, there are ways to address these changes and ensure fair outcomes for all parties involved.

Ready to take the next step? As leading family law solicitors in Milton Keynes, our team of specialists can advise and guide you from the moment we start working with you. As well as our head office in Milton Keynes, we also have offices in Watford and London. Talk to us in confidence and find out where you stand. Get in touch – we’re here to help.

This article is intended for the use of our clients and other interested parties. The information contained in it reflects the author’s view and is believed to be correct at the date of publication. However, it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional legal advice.