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What is Spousal Maintenance?

If you are about to sign a Contracting Out Agreement (pre-nup) then I recommend carefully reading the agreement to see if it mentions anything about spousal maintenance.  If it does, I recommend asking your lawyer if it is appropriate in your circumstances.  I will now give a brief explanation on spousal maintenance but this is not legal advice, just a quick explanation of what spousal maintenance is and your rights under relationship property law in New Zealand but I strongly recommend talking to your lawyer more about this before signing the pre-nup to get legal advice. 

Under section 64 of the Family Proceedings Act 1980 Act (“Act”), when a relationship has ended and one partner is unable to meet all or part of his/her reasonable needs, the other party is liable to maintain them if the inability to meet their needs is a result of one or more of the following:

1. The effects of the division of functions within the relationship while the parties lived together;

2. The likely earning capacity of each partner; and

3. Any other relevant circumstances (e.g. very young children preventing the other party being able to work).

Case law in New Zealand emphasise that neither party is liable to maintain the other party after the relationship has ended.  There is no right or entitlement of spousal maintenance.  The Act refers explicitly to the responsibility of each party to meet their own maintenance needs.  Liability flows from a present inability of one partner to be self-supporting and is only for a short time (usually between 6-12 months). 

In one case the husband earned $500,000 per year working overseas and the wife had to take care of the children in New Zealand.  As a result she did not have the opportunity to work or study and now the wife is unable to find work but the husband is still enjoying $500,000 per year.  Here there is a large disparity between the parties. 

Section 65 of the Act provides the guidance for courts in determining the amount payable.  The courts must have regard to the following:

1. The potential earning capacity of each partner;

2. The means derived from the division of property;

3. The reasonable needs of each partner;

4. The fact that the partner by whom maintenance is payable is supporting any other person;

5. The financial and other responsibilities of each partner; and

6. Any other circumstances that make 1 partner liable to maintain the other.

Courts have assessed “reasonable needs” based on the parties’ standard of living when they were still living together.   Case law shows that the paying partner will only be required to pay what they can genuinely afford.  In one case, the spouse was on the benefit and was asking for $150 per week but the court held that the other partner only had to pay $140 per week maintenance because that was all that he could afford (he was earning $44,730 per year).

If you are about to sign a Contracting Out Agreement and it has a clause regarding spousal maintenance read it carefully and ask your lawyer if this clause is appropriate in your circumstances.  If you are a stay at home parent putting your career on hold while your partner’s career is taking off, and the pre-nup states that you will not bring a claim for spousal maintenance, it may not be recommended to sign such a pre-nup, particularly if your children are still very young.  It may be recommend removing this clause because you could be very disadvantaged should your relationship end.  However, if you are both professionals then this clause will most likely  be appropriate.