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How could redundancy impact my divorce settlement?

PUBLISHED: 10:30 26 September 2020

There are many financial factors which would be taken into account if someone was made redundant during a divorce, and it's advisable to seek independent legal advice in this situation   Picture: Getty Images/iStockphoto

There are many financial factors which would be taken into account if someone was made redundant during a divorce, and it's advisable to seek independent legal advice in this situation Picture: Getty Images/iStockphoto

Elena Abrazhevich

Redundancy can have significant implications in divorce proceedings. Partner and family law expert at Howes Percival, Amy Walpole, considers the impact of redundancy on financial settlements on divorce and answers some key questions.

Amy Walpole, partner and family law expert at Howes PercivalAmy Walpole, partner and family law expert at Howes Percival

How could redundancy impact on the resolution of my finances on divorce?

You should immediately communicate with your former spouse if you are made redundant so it is not a surprise and alternate arrangements can be put in place.

Maintenance would need to be carefully considered alongside the payer and payee’s future income needs. Consideration will need to be given to the redundancy package and any alternative employment prospects.

If a financial order has not been agreed it could allow for one party to seek an increased capital claim. Adjustments to the division of the marital capital can be made depending on the needs of the parties and the extent of family resources.

There are many factors which would be taken into account, so it is advisable you seek independent legal advice if you find yourself in this situation.

How does redundancy influence the amount of maintenance I pay?

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Any maintenance order is always variable. In a redundancy situation it is open to the payer to make an application to vary downwards the level of maintenance or periodical payments.

The court may not immediately be persuaded to reduce the payments as the redundancy package is intended to compensate for loss of income. The court may regard the redundancy payment as a capital fund from which maintenance can be paid.

Future employment prospects for the payer will be considered. In the event the payer can demonstrate there are no alternative employment prospects on the horizon and the redundancy payment is depleting, an application to vary maintenance downwards is the appropriate route. It is advisable to make the application before being in a situation where it is unaffordable and you fall into arrears.

Anyone subject to a child support assessment who has been made redundant should contact the Child Maintenance Service and ask for a reassessment on the basis of their new circumstances.

Will my spouse have a claim against my redundancy payment?

The court would take into account all assets, to include your redundancy payment, whatever their source. If the redundancy payment is received after separation there could be scope to present a case that these funds should be treated as non-marital, and not be included as part of the settlement.

Each case is considered on their individual circumstances so the outcome will vary in different situations.

If you have any questions regarding financial settlements on divorce during this time, or a general family law enquiry, please contact Amy Walpole on amy.walpole@howespercival.com or 07467 143293.


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