Lump Sum Orders & Periodical Payment Orders Explained
22 August 2017
When a marriage breaks down, as well as legally ending the relationship with a divorce, most couples will also have financial matters to resolve.
When it comes to dealing with financial matters through the Family Courts, there are lots of different options available. The Court will commonly make two types of Orders – Lump Sum Orders and Periodical Payment Orders.
What is a Lump Sum Order?
A Lump Sum Order is an order for one person to pay the other person a lump sum of money. This is often ordered when there is a property, usually the family home, and one of you is going to remain living in it. The property would be transferred into that person’s name and a lump sum would be paid to the other person for their share of the value of the property.
What is a Periodical Payment Order?
A Periodical Payments Order is more commonly known as a Maintenance Order. There are two different types of periodical payments – Spousal Periodical Payments and Child Periodical Payments. These can be calculated as two separate figures or combined as one global figure, known as a Global Periodical Payment.
Spousal Periodical Payments
Spousal Periodical Payments are paid by one person (usually the higher earner) to support other person (usually the financially weaker person) following a divorce. This can happen because one person has given up work during the marriage or works part time, perhaps to look after the children.
When the marriage breaks down, that person may need help to meet their day-to-day living expenses as their income alone is not enough to do this. If the other person has surplus income after meeting their living expenses, an Order can be made for Spousal Periodical Payments. These can be for a defined period of time but have to end if the person receiving the payments remarries.
Child Periodical Payments
Child Periodical Payments are paid by the ‘non-resident’ parent to the parent who is responsible for the day-to-day care of the children. This is because the person looking after the children will have to meet their living costs. However, both parents have a responsibility to contribute towards their child’s everyday living costs, even after divorce or separation.
The Court can make an Order for Child Periodical Payments, although any Order made is only enforceable for a year. Otherwise claims for child maintenance can be made through the Child Maintenance Service if necessary. The reason some people would choose to have child periodical payments confirmed in a Court Order is if they have agreed that the payments will be at a higher level than the Child Maintenance Service would calculate.
How to Obtain a Court Order
If you and your former spouse are able to reach an agreement in relation to finances between yourselves, then a Solicitor can draft this into an Order and send this to the Court for approval.
If you can't reach an agreement, one of you would need to make an application to the Court for a Financial Order and Court proceedings would then follow, with a final Court Order being made at the conclusion of the proceedings.
Given the range of Court Orders that relate to financial matters in divorce, it is always best to seek legal advice to explore the options available and what best suits your individual circumstances.