As a result of Covid-19 and the furlough scheme coming to end, the threat or reality of one spouse being made redundant within divorce proceedings is likely to become more prevalent over the next few months.
How does or can this affect, therefore, financial settlements in divorce?
Financial Settlement In Place
If a financial settlement has already been agreed between you and your spouse and approved by the Court it is highly unlikely the Court will “set aside” the settlement and look at it afresh. This is because case law has confirmed that the loss of employment is not a sufficient unforeseen event to disturb the basis of settlements already finalised.
If the financial settlement includes spousal maintenance and the payer has been made redundant, they are able to apply to the Court for a variation downwards in the spousal maintenance which they pay. Any decrease in payments is not though automatic and the Court will consider all of the circumstances. For example, the Court may expect the same level of payments to continue for a period of time, viewing any redundancy package as a capital fund from which maintenance can be paid.
If a child support assessment has been undertaken the person who has been made redundant should contact the Child Maintenance Service and ask for a reassessment.
Still Negotiating the Terms of Settlement
If you have not yet reached a binding agreement with your ex-spouse full details of any impending redundancy should be provided, so the effect of the redundancy can be taken account in the financial provision which is ultimately made.
If a redundancy payment is received during the divorce proceedings or it is known it will be in the foreseeable future then depending on all of the other circumstances/assets it may be possible to argue that it should either be shared or that one spouse should be allowed to retain it in its entirety.
If the position as to whether a redundancy will take place is unclear, the finalisation of any settlement can be delayed until the position is known. As to whether this is a proportionate step to take will again depend on the particular circumstances of those involved.
Concluding financial settlements which are fair and reasonable can be complex and dependant on your personal circumstances. If you would like further advice or to make use of our fixed fee appointment scheme then please contact one of our family law specialists Zoe Gaitskell or Benitia Knowles-Wright on 01404 548050