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NDIS and Spousal Maintenance

NDIS and Spousal Maintenance

In some cases involving the breakdown of a relationship one spouse may be ordered to pay to the other spouse a sum of money to assist with their financial support.  This is known as spousal maintenance.

To be eligible for spousal maintenance a party (“the payee”) needs to a establish that they cannot support themselves:

  1. By reason of care and control of a child of the relationship who has not attained the age of 18 years;
  2. By reason of age or physical or mental incapacity for appropriate gainful employment; or
  3. For any other adequate reason.

In short, the payee would need to be able to show that their reasonable personal expenses exceeded their income.

The second aspect of a spousal maintenance application is that the payee must establish that the other party (“the payer”) has the capacity to pay spousal maintenance, that is, to show they have a surplus of income over expenses.

In considering an application for spousal maintenance the Court is to have regard to a number of matters set out in section 75(2) of the Family Law Act 1975 (Cth).

Section 75(3) of the Family Law Act 1975 (Cth) provides that a Court shall disregard any entitlement of a party whose maintenance is under consideration to an income tested pension, allowance or benefit.  This means that Centrelink benefits (eg. disability pension) are excluded when calculating an applicant’s income for the purpose of spousal maintenance.  The aim of this section would appear to be to protect the public purse by increasing the number of spousal maintenance applications.

Interestingly, the National Disability Insurance Scheme (“NDIS”) is not income tested.  Therefore, a potential payer of spousal maintenance may argue that the receipt of the NDIS by the payee could be used to reduce the level of maintenance otherwise payable.  This issue was considered in the decision of Bodilly & Hand [2019] FamCA 210.  Justice Cronin held the following:

  1. Section 34(1)(e) of the NDIS legislation provides that in determining the funding for the recipient, the agency official must take into account what others such as family and the community (that is, other than the NDIS) will provide. That tends to suggest that in the course of an assessment of what has been described as the budgets, the NDIA will take into account the needs of the recipient but only fund those which are not likely to be covered from an outside source. That interpretation has been rejected by the Federal Court. In McGarrigle v National Disability Insurance Agency [2017] FCA 308, Mortimer J held that the NDIA had to be either satisfied that a support had the character of being a reasonable necessary support or that it did not. Her Honour held that once a support was identified and described then the question for the NDIA was whether or not that support was reasonable and necessary for that particular participant. Her Honour said that that determination could only be made on the basis of probative evidence. In the present case, I do not have that evidence; all I have is the evidence of the anticipated costs calculated by the wife and the historical costs determined by the accountant. Her Honour went on to say that once a decision had been made that the support was reasonable and necessary, then subject to other requirements in ss 33(5) and 34 of the legislation:

The scheme requires and contemplates that support “will” be funded. In my opinion, that can only mean wholly or fully funded.

  1. On appeal before the Full Court of the Federal Court of Australia, [2017] FCAFC 132, her Honour’s determination was upheld.
  2. Importantly for the purposes of the present determination, Mortimer J held that the parliament did not intend the decision-maker to ask, informing a state of satisfaction, whether the community could or should make a financial contribution to the funding of a support found by the decision-maker to be reasonable and necessary in order for the participant to work towards the goals, objectives and aspirations set out in the participant’s plan (see [95] of the decision of Mortimer J).
  3. Her Honour went on to say that where a support had been found to be both reasonable and necessary, it would be inconsistent with the purpose of the scheme for such a support to be made effectively conditional on either the provision or the funding by another person of a portion of the relevant support.
  4. The assessment of the wife’s entitlement to payments from the NDIS require the NDIA to examine and decide in a rational and reasonable way “based on probative material” whether or not there is, in fact, capacity for others to provide the support needed. The issue is whether or not support needs to be funded rather than the support to be provided. If the support is to be provided by family members or the community, the funding is not necessary. Importantly, as Mortimer J observed, the issue must be determined on probative evidence. Looking at the evidence of the wife as set out above, there was no suggestion by her how (if at all) the family or the community was to provide the support to obviate the necessity for the funding. That being the case, I see no reason why I ought not accept that in assessing the wife’s needs, the NDIA, assisted by those that contributed to assessing her needs, determined that those needs were at a particular level for which funding was provided. That inference is more probative than the wife’s estimates or anticipated expenses.
  5. The result therefore is that the wife is not entitled to argue that any shortfall in the budget should be met by the husband as part of her maintenance claim. If, as the wife asserts, her needs can be quantified, and those needs have been accepted by the NDIA, they must be funded. If not, there is a problem between the wife and the NDIA and that problem is contemplated by the legislation in review processes.

It is not clear if and when the Government will amend the Family Law Act 1975 (Cth) including section 75(3) to specifically capture and exclude entitlements to the NDIS in calculating an applicant’s income for the purpose of maintenance in order to further protect the public pursue.

Adam Somerville-Brown

Director | Accredited Family Law Specialist

 

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