What is a Periodical Payments Order?

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Diana Bastow

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Periodical Payments Orders in Divorce

Throughout the process of a divorce or when unmarried couples with children split up, numerous orders can be made to achieve a fair and equitable outcome for both parties involved. One such order is a Periodical Payments Order.

A Periodical Payments Order is the term for ongoing (usually monthly) payments made by one party to the other, either for themselves or the children of the family.

They are meant to support the financially weaker spouse or the children of the family. Payments are intended to cover expenses such as mortgage payments, household bills and essential living costs.

What are the types of Periodical Payments Orders?

There are three types of Periodical Payments Orders: spousal maintenance and child maintenance.

Spousal maintenance is financial support provided by one spouse to the other after divorce. An Order for spousal maintenance is usually made when there is a significant difference in income between the spouses, for example, if one spouse gave up their career to care for the family during the marriage or has a significantly lower-paid job (see our blog post on Breadwinner vs Homemaker Divorce Rights).

The aim of spousal maintenance is to provide financial security for the financially weaker spouse until they can become self-sufficient through education, employment or remarriage. The amount is based on the reasonable needs of the recipient and the ability of the paying spouse to meet those needs.

There is no specific formula to calculate spousal maintenance and it is usually determined by examining the parties detailed income needs budgets, the parties incomes and then looking at the deficit that the financially weaker party may have to meet their needs.

Spousal maintenance is based on needs and is not subject to the sharing principle.

Child maintenance is financial support provided by a non-resident parent to the parent with primary custody. This payment is meant to cover expenses related to raising a child, such as food, housing, childcare and education. Child maintenance is usually paid until the child reaches the age of 16. It can extend until the child reaches 20 if they are in full-time education or training.

As with spousal maintenance, there is no fixed amount that must be paid. The amount is based on how much the paying parent earns, how many children they have, their living arrangements, and how much time the children spend with each parent.

The Child Maintenance Service uses a statutory formula to calculate child maintenance payments based on the non-resident parent’s gross weekly income (read our Guide to Child Maintenance). However, the CMS calculation is only a starting point. The actual amount may be negotiated between the parents in a family-based arrangement. The Child Maintenance Service has jurisdiction if the non-resident party earns under £156,000 gross per annum. The Child Maintenance Service will access the non-resident’s P60 or tax returns to make an assessment.

If the non-resident party receives an income over £156,000 gross per annum and less than £650,000 gross per annum then the Court will use similar formula as the Child Maintenance Service and this is set out in the case of James v Seymour [2023] EWHC 844 (Fam).

Global Maintenance is the mechanism by which the Court can make an Order which combines the elements of spousal and child maintenance.

How are Periodical Payments Orders decided?

Periodical Payments Orders are calculated as part of a fair financial settlement based on the individual circumstances of your divorce.

They can be made through a voluntary agreement between the parties or determined by the court. Limiting the amount of court involvement can save time and money. Your family lawyer will help you reach a fair settlement that meets both parties’ needs and is affordable for both.

At Osbornes we have a number of specially trained mediators who can help you reach a mutually beneficial agreement, often in less time and at a lower cost than going to court.

Since a periodical payment is essentially a monthly payment plan, where one party pays the other a fixed amount each month to meet their needs or the children’s needs after a divorce, it is important to consider what each party needs and what they are reasonably able to pay.

Your solicitor and the court will take into account various factors when deciding on the amount and duration of a Periodical Payments Order, such as:

  • Income, earning capacity and financial resources of both parties
  • Standard of living enjoyed by the family before the divorce
  • Age, health and future earning capacity of both parties
  • The contributions made by each party to the welfare of the family, including any caring responsibilities for children or other family members
  • The length of the marriage and any significant period spent living together before marriage

Does every divorce involve a Periodical Payments Order?

No, not every divorce involves a Periodical Payments Order. In some cases, an immediate Clean Break Order may be more appropriate. Having an immediate clean break means cutting the financial ties between the parties, forever. There will be no ongoing spousal maintenance payments or claims on each other’s property in the future—your financial connection will be completely severed.

Immediate clean breaks are often used when each party is capable of supporting themselves and there are no dependent children.

Another alternative to periodical payments is a Lump Sum Order. This involves the transfer of money from one spouse to the other in a single, lump-sum payment. Lump sums can be used to equalise any outstanding financial balances between the divorcing parties. For example, one spouse may take ownership of the matrimonial home and pay a lump sum equivalent to the value of the other party’s equity.

Lump sums can also be used instead of ongoing spousal maintenance. The amount of maintenance required for a set period of time will be calculated and paid to the other party in a lump sum to satisfy their reasonable future needs. This is known as capitalised maintenance. Some couples prefer it as a way to achieve a clean break.

Can a Periodical Payments Order change?

Often, a variation to the amount of the periodical payments will happen automatically because it was provided for in the original Consent Order or Court Order.

Payments are often indexed for inflation, for example, or limited to a certain number of months or years to give your ex-spouse time to get back into work. In such a case, the payments would automatically end after this period.

However, either party can apply to the Court for a variation of a Periodical Payments Order if there has been a substantial change in circumstances. This could be due to an increase or decrease in income, a sudden influx of capital, the start of a new relationship, or a change in living arrangements.

Your family lawyer can advise you on whether applying for a variation is appropriate and how best to proceed.

Is a Periodical Payments Order right for me?

For couples with dependent children, periodical payments may be necessary to ensure that both parties are able to maintain a similar standard of living and provide for their children’s needs after divorce.

Periodical payments are also useful in cases where one party has significantly lower earning potential and requires ongoing financial support.

However, every situation is unique and there is no one-size-fits-all solution when it comes to financial arrangements after divorce. It is important to seek expert legal advice from a qualified family lawyer who can create the right combination of financial orders to meet your individual needs.

How we can help

Our experienced family law solicitors are here to provide you with expert guidance and support. We offer:

  • Free Initial Consultation: We’ll explore your options and help you make an informed decision about whether periodical payments might be the right choice for your situation.
  • Expert Legal Advice: Our solicitors will explain the implications of periodical payments within the context of your divorce settlement.

Our aim is to ensure you have all the information you need to make the best decisions for your financial future.

To arrange your free initial consultation:

  • Complete our online contact form
  • Call us at 020 7485 8811

Let our experienced team help you navigate this important aspect of your divorce settlement.

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