Varying a Financial Order on Divorce
Whether a Financial Order was made after a full hearing where there was a dispute between the parties, or whether it was made by consent, it is possible for either party to apply to the Court to vary such an Order.
Not every type of Order can be varied, as those which effect a clean break or provide for capital sums usually cannot be varied to avoid uncertainty. In this way all parties can make plans for the future with the knowledge that the distribution of capital is permanent as neither party can apply to amend it.
Orders that can be Varied:
Orders which can be varied include:-
1. Maintenance pending suit and interim maintenance. This is where a party has been awarded payments whilst the main Financial Order is being contested and before the final hearing has been concluded on the matter. Either party can apply at any time to vary such an Order.
2. Periodical payments. This type of Order is most commonly varied and either party may have reason to vary it. The Applicant may wish to seek that more is paid to them, whilst the Respondent may get to a time whereby they wish to see the payments reduced and eventually extinguished.
A variation could include requesting that the Court extend the time for their fixed term periodical payments. Such an application can only be made if the original Order has not yet expired. It does not matter if the hearing of the Application is after that time, as it is only necessary that the Application is made in time. Any party looking to make such a variation should also check that the original Order did not direct that no extension could be made.
Additionally, should the Court vary a Periodical payment they can add a direction to impose a ‘deferred clean break’, whereby they extend or modify the payments but for a limited time only, after which it will cease and neither party can seek to extend it. Whether such a decision is appropriate will depend on the circumstances at the time, much like as they are when they decided whether a clean break in the divorce was suitable at the original hearing.
It should also be noted that when a Respondent seeks to reduce the amount paid on a divorce, the Court could also agree to remit any arrears owing to the Applicant. This would occur, for example, where the Respondent has lost their job, arrears have built up and they are applying for a downward variation to the Periodical payments.
3. Payment of a lump sum by instalments. Although the Court has the power to vary not only the number and amount of instalments but also the overall sum, the Courts have made clear that they would only ever vary the overall sum in exceptional cases where the original circumstances had changed significantly, making it unreasonable to hold the Respondent to the original sum agreed.The purpose of this is to make sure that the finality which the Order was supposed to bring will remain.
4. Sale of a Property as a condition of failing to pay a lump sum payment. Where the Court has directed that a property should be sold should the Respondent fail to pay the lump sum Order, the Respondent can apply for that condition to be removed should they be able to provide another means of security or method of payment.
Orders that cannot be Varied:
In order to avoid uncertainty the following types of Orders cannot be varied on the basis that these Orders are supposed to be permanent to enable each party to make plans for the future without worrying about possible unforeseen changes:-
1. Lump sum Order not payable by instalments.
2. Transfer of Property Orders. No party can seek to delay any date of sale, however it might sometimes be possible to obtain a sale at an earlier date.
3. Pension Sharing Orders. These cannot be varied unless the variation takes place before the Order comes into effect and before the Decree Absolute is issued.
Although most Orders will state that the parties have “leave to apply” this does not mean that they are able to return to Court to vary the Order. This will mean that the parties have the opportunity to return to Court about a family law issue if they are having difficulty implementing the Order. If the result of any subsequent Order will make it more favourable to one party over the other then this will be seen as a variation and the party will not be “at liberty to apply”.
What the Court will Consider on Variation:
The Court is required to consider all the circumstances of the case, giving first consideration to the welfare of any children who have not yet turned 18. The needs of each party will be considered, however where the Applicant is making an application for variation, any need which has arisen out of their own financial mismanagement or extravagance will not be considered, as the Respondent will not be expected to meet these needs.
Any deliberations by the Court must include considering the complete ‘package’ of the original Financial Order. This means, for example, that whilst the periodical payments themselves may seem low and appropriate to be varied, if the Applicant was originally given a larger share of the matrimonial home and to increase the periodical payments will now sway the balance of the original Order, then the Courts will be less likely to agree to this variation. They will always seek to maintain the balance achieved by the original Order.