The obligation to pay alimony is determined on the basis of the needs of the entitled party and the financial capacity of the obligated party. In this blog, we will discuss the financial capacity, the extent to which the obligated party can contribute to the livelihood of the child and the ex-partner. There are various data that influence the financial capability, including the cost of living (the mortgage amount or the rent). These data give rise to proceedings if there is no or insufficient financial capacity to pay spousal support. Will a lump-sum payment reduce the number of discussions and proceedings?
Living expenses and partner alimony; how is it now?
The Expert Group for Alimony Standards issues recommendations which, among other things, help in making an alimony calculation. The recommendations are published annually in the Report on Maintenance Standards and these recommendations are used by judges when assessing requests for maintenance. When determining the financial capability, the Expert Group Alimony Norms advises to calculate with the actual living expenses. That amount can be maximised if the housing costs are excessive.
Almost 10 years ago, the Expert Group on Alimony Standards changed its recommendation for the financial capability to pay child support. Since then, the advice has been to start from a lump sum, a standard amount based on income (30% of the net disposable income). The idea behind the lump sum is to simplify the calculation, increase predictability and increase legal certainty. Currently, different living expenses are assumed for the calculation of childand spousal support.
How can it be?
The Expert Group on Alimony is planning to include a lump-sum housing expense in the Alimony Standards Report as of 1 January 2023 for the calculation of the supporting capacity for spousal support. The intention is to use the same flat-rate housing costs as for the calculation of child support, namely 30% of the net disposable income. It is expected that exceptions will remain possible.
What are the possible consequences?
The obligated party with a higher living burden than the fixed amount will have more financial capacity than is currently the case. In practice, a housing burden of more than 30%-35% of the net income is considered unreasonable. In those cases, the living expenses have already been adjusted downwards and the fixed amount of living expenses will not lead to a change in financial capability. This is different for a maintenance obligated person with a lower house load than the lump sum. Due to the (fictitious) higher cost of living, this obligated party will have less financial capability and will therefore have to pay less alimony.
If a lump-sum housing charge is applied, the calculation method will be simplified. This simplification will reduce the number of proceedings due to a mere change in the living expenses situation. It remains to be seen whether this will also reduce the number of partner alimony proceedings.