In determining whether an order for spousal maintenance should be made, the Court is required to consider the following four step process:
- Can the applicant support himself or herself adequately?
- If not, what are the applicant’s reasonable needs?
- What capacity does the respondent have to meet those needs?
- What order is reasonable having regard to s 75(2) FLA?
(Refer Saxena and Saxena  FamCA 588; (2006) FLC 93-268, Coleman J)
Before there can be any liability of party to pay spousal maintenance, the applicant seeking an order for payment of spousal maintenance must first establish that he or she “is unable to support herself or himself adequately” (s 72(1)FLA).
The following items are not relevant to the question of a party’ ability to support himself or herself adequately and his or her needs:
- It is not appropriate on an adequacy test to allow a part a deduction against income for any shortfall where mortgage payments for an investment property exceed the rental income received from that investment or to take into account any other tax-related expenses attributable to that investment property. The party seeking an order for payment of spousal maintenance must distinguish expenses (such as rates and levies and any insurance expenses related to insuring a mortgage loan) attributable to the property where the party lives and those expenses attributable to an investment property.
- It is not inappropriate to include child support paid by the other party as part of the applicant’s income for the purpose of spousal maintenance. Those monies are designated for the support of children. Any shortfall that the applicant claims between the amount of child support paid by the other party and children’s actual expenses should not be included as part of the applicant’s need for maintenance for his or her own support (Stein v Stein  FamCA 102; (2000) FLC 93-004).
In the case of Shan & Prasad  FamCAFC 12 (1 February 2018), the Full Court of the Family Court of Australia said that it is not appropriate that the court guess at what are the reasonable expenses of a person applying for an order for payment of spousal maintenance. It is for the applicant to establish what is his or her income and the amount of his or her relevant expenses.
In that case, given that the wife had not established that she could not support herself adequately, it was not strictly necessary for the Full Court to consider the approach taken by the primary judge to the second item that must be established by the applicant seeking an order for payment of spousal maintenance, being the capacity of the other party to pay spousal maintenance. However, the Full Court said that it was useful that it did so.
The Full Court accepted that the evidence of the husband in that case as to his salary as a paediatric registrar was plausible. The primary judge had accepted the husband’s income as being an amount of $2,153 per week.
The primary judge had accepted that the husband’s weekly living costs and expenses included income tax of some $600, accommodation charges of $500, insurances of $62, child support of $313 and living expenses of $480, giving a total weekly expenditure of approximately $1,955. That figure did not take into account capital gains tax or loan repayments which the husband would have had for the loan he would need to take so that he could pay the amount he was required to pay in order to comply with the property settlement order that had been made by the primary judge.
The Full Court found that these figures showed that the husband did not have the capacity to pay any spousal maintenance.
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