The Ex-Files: What expenses do I pay for my wife and children?

Q.  I have just separated from my wife. We have two children aged 11 and 12 who will stay with me two nights a week and live the rest of the time with my wife. She has given me a detailed list of expenses for her and the children which she would like paid monthly. Her haircuts and clothing alone come to a significant amount. I am happy to pay for the children but am I obliged to pay for my wife? There is no reason she couldn’t work now. She has had part-time roles frequently throughout our marriage including after we had the children. How much should I contribute to all their expenses and how do most people work this out?

A. When discussing this financial support, it is clearer to consider the payments for your wife and children separately. The payments towards the cost of raising your children are called child support and payments to your ex are called spousal maintenance

Child support

There are three different ways that child support can be calculated and paid:
1.     Formula assessment by Inland Revenue

This is where the IRD calculates the amount based on factors including your income, your wife's income, the number and age of your children and the number of nights you each care for them. The IRD then collect the amount from you and pay it directly to your wife.

2.     Voluntary agreement

You and your wife reach an agreement regarding the amount yourselves and the IRD collects it from you and pays it to your wife. If there are any missed payments, then the IRD enforces the agreement.

3.    Private agreement

In this situation, you and your wife set the amount, timing and method of payment. Any missed payments are sorted out between yourselves.

You and your wife can decide which arrangement will suit you best. Many couples manage their child support payments successfully by private agreement. You write that your wife has already made a list of expenses – that could be a good starting point. It should include routine costs like housing, food, clothing and activity fees and can include large annual costs like school fees & uniforms.

Some couples like to agree up front how they will deal with sudden or unforeseen costs such as orthodontics. You might decide that these costs will be split 50:50 or that they will all be covered by the financially advantaged party.

It can be good to have an annual review of child support and discuss costs for the upcoming year, particularly as the children's needs and care arrangements will change as they get older.

If you decide on a private agreement, be aware that you or your wife could decide to apply to IRD for a formula assessment at any time.

Spousal maintenance

Spousal maintenance is the provision of financial support from one partner to another after a relationship ends to assist that partner in meeting their reasonable needs if they are unable to support themselves. Generally, it is for a short period of time while the other person gets back on their feet, perhaps transitioning to a full-time role or undertaking further training.

You can make an agreement about spousal maintenance yourselves or your wife could apply to the Court. The judge would consider your family circumstances, such as each of your ongoing responsibilities for the children, your financial responsibilities (like mortgages, bills and dependents) the standard of living you had when you were together, and what your wife is able to earn.

An important factor is whether your wife's ability to be self-supporting is due to the division of functions within your relationship when you were together. If your wife was a stay at home mother or worked less while you were the primary breadwinner, then she may have been unable to progress her career to the same extent that you did. This would have impacted on her current earning potential and would be considered by the Court when calculating spousal maintenance. Generally, payments are made for 6-24 months.

If your wife applied to the Family Court for spousal maintenance, it might take more than twelve months before the case is heard in Court. However, the judge can order that regular interim payments are made until the final application can be heard.

Try to avoid going to Court if you can. It will be costly and probably damaging to your relationship with your wife, which would make parenting together more difficult.

Next steps

You might find it helpful to seek legal advice on your situation so you have a better idea of what you might be legally obliged to pay.

Meet with your wife to go through the children's expenses and her expenses. Find out her plans for the future – how long is she anticipating that she will need your financial support? Explain your concerns and point of view on the spousal maintenance.

If you are finding it difficult to reach agreement, you may make more progress if your lawyers negotiate on your behalf.

This article was first published with the NZ Herald.

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