Periodical Payments | Family Law

Throughout the process of a divorce, there are numerous orders that can be made in order to achieve equality upon the divorce’s conclusion. For example, the court may implement a pension sharing order, a lump sum order or a periodical payment order to make the division of assets fairer or to satisfy both parties’ needs moving forwards.

A periodical payment is essentially a payment plan, whereby one party will pay the other in instalments in order to enable them to afford to meet their and any children’s needs following divorce. Where a significant disparity exists in the income between the parties and there are not sufficient assets to enable a clean break a judge may deem it appropriate to implement a periodical payment order. This will result in one party receiving  payments (typically weekly or monthly) from the other party as an ongoing obligation until such time as the party receiving the periodical payments remarries, enters into a civil partnership with another individual, or as determined in the order itself. Often, periodical payment orders will only last until the youngest of the children reaches 18; however, the court is able to order lifetime orders in exceptional circumstances.

It is typical for this order to be implemented as a means of maintenance for the other party and, quite commonly, in the interest of any children of the parties. A periodical payment order may be applied to fulfil a mortgage, if the party who is currently occupying the former family home is unable to satisfy the payments of the same. One party may be required to assist with the mortgage payments, even while living away from the property, if the other party is unable to make payment themselves to avoid any arrears which could be incurred on the parties’ behalf if the property is in joint names.

Should either party’s financial position drastically change over the course of the order being implemented, it is possible for the court to vary the order to change the amount payable to the other in instalments or to alter the duration in which the payments are required to be made.

Clean break

An alternative to periodical payments is a lump sum order. This order will enable the parties to sever all financial ties from one another as the amount of maintenance required for a set period of time will be calculated and paid by one party to the other in full in order to satisfy their future needs. This is known as capitalised maintenance and will terminate any existing periodical payments order.

Whilst it is possible for an order to be made for periodical payments in certain circumstances as detailed above, the courts have indicated that if a clean break is possible, this is the preferred route to take. This is because the courts want to ensure that financial independence is achieved on divorce to avoid future disputes.