Maintenance dodgers could face new upshot: blacklisting
New act obliges officer to warn bureaus about payment skippers
New Maintenance Act regulations have serious implications for defaulters, who face getting an adverse credit record that could limit or block their access to home loans, vehicle finance or even phone contracts.
Kerry Sutherland, a certified financial planner and senior wealth manager at Alexander Forbes Financial Planning Consultants, says both parents, whether they are married or not, have a legal duty to maintain their minor children. This means providing a minor with essentials such as food, housing, clothing, medical care and education.
Since January, if the defaulting parent cannot be traced, the court can grant an order directing electronic communication service providers such as cellphone service providers to provide the court with the contact information of the person.
Nicole Collier, a family law attorney at Warrender Law, says even if one maintenance payment is missed, the caregiving parent can approach maintenance court officers and lay a complaint in terms of sections 6 and 7 of the Maintenance Act.
Should a maintenance officer be unable to trace the defaulter through the usual methods and have to resort to the cellphone companies, the state will carry the tracing costs if the caregiving parent cannot afford them. The state will claim these costs from the defaulter.
Another important amendment that came into operation in January is that the maintenance officer now has a legal obligation to list convicted defaulters with credit bureaus, which they do by lodging a copy of the court order with the bureaus.
"These amendments have been legislated with the aim of enforcing maintenance orders and further discouraging noncompliance," Collier says.
Divorce is expensive, Sutherland says. When a couple get divorced they can seldom maintain the lifestyle they were used to as a married couple because they each have to take on the costs of running their own home in addition to taking care of the children.
If it becomes impossible to meet your obligations, the onus is on you to approach the maintenance court.Kerry Sutherland, senior wealth manager at Alexander Forbes
Sutherland says that if you are the parent responsible for making maintenance payments, you need to ensure that you keep up with your payments and if your financial circumstances make it impossible to meet your obligations, the onus is on you to approach the maintenance court immediately for an variation of the court order.
If you do not, your outstanding payments will continue to grow and you will eventually have to settle in full, she warns.
If you are owed money from your ex-spouse or child's other parent, you have various options as provided for in section 31 of the Maintenance Act.
After 10 days of not receiving maintenance in terms of an order, you can apply to the maintenance court where the order was obtained, to have it enforced by way of execution against the other parent's property or goods which will then be attached and sold. Alternatively you can ask the court to order the debtors of the defaulting parent to pay you directly.
You can also ask the court for an emoluments attachment order (known as a garnishee order) stating that the defaulting parent's employer is to pay the maintenance monies due to you from their salary, directly into your account. The defaulting parent's employer is then liable to inform the main-tenance court if the person resigns or is retrenched.
But taking action that could see your ex-spouse blacklisted should be a last resort, according to Peter Hewett, a certified financial planner and MD of Hewett Wealth, for the simple reason that blacklisting your ex may in fact prejudice their ability to recover financially and resume making the required maintenance payments or even preclude them from acquiring a car or a home that may be required to maintain the child's standard of living.
Sutherland says divorce agreements differ vastly. Where one parent is wealthy, the other can ask for a large lump-sum payment upfront for the children's current and anticipated expenses. This is an option where the caregiving parent is concerned about receiving ongoing monthly maintenance payments.
Of course, not everyone has enough money to pay a large lump sum upfront.
"If you are married out of community of property with accrual, you divide all assets accrued during the course of the marriage (excluding any inheritance) 50/50 at the time of divorce."
This means that if a large lump-sum payment is required, the maintenance-paying spouse might need to sell an asset to pay the other partner.
If you are going to opt for the once-off lump-sum payment, you need to do accurate calculations with a financial planner to forecast your needs and also invest the money correctly. You could also agree to split any future medical expenses, she says.
Sutherland says garnishee orders and blacklisting are highly stressful and emotionally draining to all involved, including the children.
Her advice is to do your maintenance calculations correctly so that you know what you will need going forward in order to maintain your children, and do not end up in court.
Hewett says the cost of a disputed divorce can become immense and can actually end up costing more than the value of the assets under dispute.
Although it is easier said than done, he says it makes sense to try to find an independent party to mediate your negotiations so that disputes remain logical and don't become too emotionally charged.
An independent adviser could assist the divorcing couple to draft an impartial proposal on an asset split and maintenance budget that makes financial sense and is sustainable.
Most advisers would be prepared to do this for a fixed fee and do not have any incentive to drag the process out unnecessarily.
Hewett says you would also not be subject to the significant time delays involved when attorneys correspond with one another or where court applications are required to resolve the dispute.
Once you have agreed an amicable and financially feasible settlement, it is relatively inexpensive and quick to formalise the agreement through a single attorney who will then draft the divorce settlement and have it registered with a competent court.
Collier also recommends that couples attempt mediation when considering divorce.
An attorney who is a family mediator is capable of calculating both the division of the estate as well as maintenance, she says.
It is important to ensure that you make provision for your child's education and if an investment is made in the child's name for this purpose, it would not be included in the spouses' assets for accrual purposes and could thus be applied for its original purpose in the event of divorce, Hewett says.
Tips for an amicable maintenance agreement
Set a realistic maintenance amount, one that the noncustodial partner can afford, so that they do not default.
Consider paying for school fees annually in advance to take advantage of the discounts offered by schools.
Consider setting up a joint bank account to which both spouses contribute each month. This can be used for expenses that will vary over time such as extramural activities, extra lessons, school trips, birthday presents or parties.
In some divorce agreements, parents have an arrangement that one pays 100% of education and related expenses and the other pays for all other expenses related to maintaining the child.