Financial Provisions

The Matrimonial Causes Order, NI, 1978, as amended by the Matrimonial and Family NI Order, 1984, and 1991

Both the High Court and County Court have jurisdiction to make orders concerning financial provision. The court seeks to distribute family assets fairly, considering the criteria set out in legislation. It is recognized that after divorce or separation, establishing two separate homes may lead to a change in the standard of living from before.

Ancillary relief refers to orders made in the event of divorce, nullity, or judicial separation.

The child support legislation has placed the responsibility for financial arrangements for children with the statutory agency.

An application for ancillary relief can be made for an eligible child. The applicant may be a parent, guardian, or another person in whose favor a residence order is made. The Official Solicitor may apply if appointed as a guardian ad litem of the family.

An eligible child is a child of both parties or a child treated as such by both parties, except for one who has been boarded out by the social services. The child must be under 18 for property transfer.

For periodical payments, the maximum age is generally 18, but payments may continue for an older child receiving education or training for a trade, profession, or vocation. The education and training conditions may be waived by the court for a child over 18 in special circumstances.

Either a spouse or an ex-spouse may apply to court on the basis that the other party failed to provide reasonable maintenance or contribute properly to the maintenance of a child of the family.

The court may issue orders pending a hearing for ancillary relief. Such orders may restrain a party from hindering the ultimate order. A spouse might be restrained from dealing with finances or property subject to ancillary relief. Transactions may be nullified if intended to frustrate proceedings.

Ancillary relief encompasses:

• Variation orders
• Property adjustment orders
• Maintenance pending suits
• Financial provisions orders
• Avoidance of disposition orders

Lump sum orders may be enforced through property sale, execution garnishment, or charging orders. Periodical payments may be enforced by wage garnishment or through registration in the magistrates’ court.

Maintenance pending suit involves maintenance arrangements until the main hearing. The court may grant maintenance pending suit in cases of divorce, nullity, or judicial separation.

The order may require either party to pay specified periodical payments from the date of the petition presentation to the final termination date. The court considers the same factors below when determining the application, aiming for reasonable maintenance in the circumstances.

When deciding on financial provision for children, the court must consider its jurisdiction, which does not apply due to child support legislation.

The court may make the following orders:

• Periodical payment orders
• Orders securing such payments
• Orders for lump sum payments
• Orders for the benefit of a child or family, either periodical or lump sum, secured as mentioned above
• Orders for financial provision

Lump sum payments typically conclude all payments, facilitating a clean break settlement. There are published criteria regarding lump sum payments.

Lump sum payments for children are infrequent unless parents have substantial means. Courts preferred periodical payments for child maintenance even before the child support legislation.

The Pensions NI Order grants courts practical powers to include pensions in asset division. Death benefits, retirement lump sums, pensions, and payments are considered. The cash equivalent of pensions quantifies their value for divorce allocation.

Orders for ancillary relief may be modified or varied upon changes in circumstances. This primarily affects periodical payments but not one-off sums or property adjustment orders. When considering a variation, the court looks at changes in the matters relevant to the original order.

Property Adjustment Order includes all assets of the parties, encompassing potential interests in inheritances and pensions. The court may order property transfer or sale and settlement of proceedings.

Property may be transferred into a trust or benefit a child of the family, often involving the family home transferred to the parent directly caring for the children.Transfers may be conditional or unconditional, subject to a charge, or in exchange for periodical or lump sum payments.

A transfer may be ordered to achieve a clean break. The court may order one spouse to settle property for the benefit of the other spouse or child. The court can order property sale and issue necessary directions to enforce it.

When granting ancillary relief, the court considers major factors and the overall circumstances.

• The welfare of a minor child is the primary consideration in this context, outweighing other factors.
• The income, property, and financial resources of each party, present or future, including potential increases in earning capacity, are taken into account.
• Family needs, obligations, and responsibilities of each party, present or anticipated in the future, are considered.
• The standard of living enjoyed before the marriage breakdown is a factor but yields to financial circumstances.
• The age and duration of the marriage, as well as physical or mental disabilities of the parties, are considered.
• Contributions made or expected to be made by each party to the welfare of the family, including home care or family support, are assessed.
• The conduct of each party matters only if it would be unfair to disregard it. This reflects the broad no-fault principle, with misconduct being relevant only in exceptional cases.
• The value of benefits for each party, including pensions lost due to the dissolution of marriage, is accounted for.

When considering a child, the court also considers the child’s financial needs, income, capacity, disabilities, education, and standard of living.

The Clean Break Principle:

The legislation requires the court to assess whether a clean break would be appropriate in making orders for property or financial adjustment. The court determines if terminating financial obligations would be just and reasonable.

A clean break might be achieved around or shortly after the decree, especially if the parties are young, the marriage was brief, or if the parties are either wealthy or supported by benefits.

There’s no time limit for an ancillary relief application. It may be heard in the divorce petition or later, even years afterward.

A clean break may be achieved through short-term periodical payments relevant to children about to reach adulthood or for attaining financial independence. However, a clean break may not be suitable, particularly when minor children are involved.

When one spouse cohabits in the matrimonial home, contributions may reduce the ex-spouse’s periodical payments. In such cases, the courts might not order a clean break. In many situations, a clean break might not be feasible.

Divorce or judicial separation doesn’t revoke a will. Marriage does. A divorced spouse is no longer considered a spouse.

In case of a deceased divorced person, provisions for the ex-spouse take effect as if the ex-spouse had died on the divorce date. Executors or trustees’ appointments cease unless stated otherwise, and guardian appointments end.

If inadequate provision is made in the will for a spouse or former spouse, an application can be made under the Provision for Family and Dependants NI Order. See the separate section on this legislation. A spouse may claim if not remarried or barred by an order under matrimonial and family proceedings.

For separated spouses, if one dies intestate while separation is ongoing, the intestacy rules apply as if the other spouse had died. This is applicable only with a decree for judicial separation.