Spousal Maintenance in the ACT: Who Qualifies and How It Works

Australia does not have alimony. What it has is spousal maintenance — a separate legal entitlement under Part VIII of the Family Law Act 1975 that exists independently of property division and child support.

There is no formula. No calculator. No percentage table. The court applies a two-step threshold test: does one party have a genuine financial need, and does the other party have the capacity to pay?

The Two-Step Threshold Test

Step 1: Demonstrated need

The applicant must prove they cannot adequately support themselves. The court assesses reasonable living expenses against net income from all sources. If expenses exceed income, a need shortfall exists.

Reasons the court accepts for financial need include:

• Primary care of children under 18 — the biggest single factor in ACT spousal maintenance claims
• Age or physical/mental health that limits earning capacity
• Career sacrifice during the relationship — years out of the workforce caring for children or supporting a partner's career
• Retraining period — time needed to re-enter the workforce at a reasonable level

The court does not accept an unwillingness to work as a basis for need. If the applicant has earning capacity but chooses not to use it, the claim will fail.

Step 2: Capacity to pay

The respondent must have surplus income or resources after meeting their own reasonable living expenses. The court will not order maintenance that pushes the payer below a reasonable standard of living.

Both steps must be satisfied. A spouse in genuine need gets nothing if the other party genuinely cannot afford to pay.

How Courts Determine the Amount

Since there is no formula, courts assess maintenance case by case under Section 75(2) of the Family Law Act. The factors include:

• Each party's income, property, and financial resources (including any property settlement proceeds)
• Each party's earning capacity and employment prospects
• The standard of living during the relationship
• The effect of the relationship on each party's earning capacity
• The age and health of each party
• Whether either party has care of a child under 18
• The impact of family violence on the parties' circumstances (added by the Family Law Amendment Act 2024)

In practice, most spousal maintenance in the ACT is ordered for a fixed period — typically two to five years — to allow the recipient to retrain or re-establish their career. Indefinite maintenance is reserved for cases where the recipient has a permanent incapacity or is of an age where re-entering the workforce is unrealistic.

The Interaction with Property Settlement

Spousal maintenance and property division are technically separate, but courts consider them together. A large property settlement in favour of the lower-earning spouse may eliminate the need for ongoing maintenance — the capital from the property split is expected to generate income or reduce expenses.

Conversely, if the property pool is small and one party retains the family home (reducing their liquid assets), maintenance becomes more likely because the recipient may have limited cash despite receiving a fair share of the overall pool.

Tax Treatment

Spousal maintenance receives favourable tax treatment in Australia:

• For the recipient: Maintenance payments (periodic or lump sum) are not taxable income and do not need to be declared on tax returns
• For the payer: Payments are not tax-deductible

This is the opposite of the US system, where alimony was historically deductible for the payer.

Centrelink Impact

While spousal maintenance is not taxable, it is means-tested by Services Australia (Centrelink). Maintenance payments reduce eligibility for government benefits — including the Single Parenting Payment and JobSeeker — on a dollar-for-dollar basis.

This creates a practical tension: the maintenance payment may simply replace government support rather than genuinely improving the recipient's financial position. Courts are aware of this dynamic and factor it into the amount ordered.

Enforcement

If the payer defaults on court-ordered maintenance, enforcement options include:

• Lump sum conversion: The court can convert arrears into a single lump sum payable from property or superannuation
• Enforcement application: Filing an enforcement application with the FCFCOA
• Tax refund interception: Services Australia can redirect the defaulting party's tax refunds to satisfy unpaid maintenance

How to Include Maintenance in Your Settlement

Spousal maintenance can be included in consent orders alongside the property split — the same Form 11 application covers both. Alternatively, it can be dealt with in a binding financial agreement.

The critical step most self-represented parties miss: include a mutual release of future spousal maintenance claims in your consent orders unless maintenance is being ordered. Without this release, either party can come back years later and claim maintenance if their circumstances change.

The ACT Divorce Financial Split Guide includes a spousal maintenance assessment worksheet and template consent order clauses covering both ongoing periodic payments and mutual release of maintenance claims.

See more Australian Capital Territory guides →