Variation of Financial Orders

Which Financial Orders Can Be Varied

Section 31(1) of the Matrimonial Causes Act 1973 gives the court power to vary or discharge an order to which the section applies, to suspend any provision of it temporarily and to revive a suspended provision. Section 31(2) lists those orders: maintenance pending suit and interim maintenance, periodical payments and secured periodical payments, a lump sum payable by instalments, a deferred lump sum carrying pension provision, an order for the sale of property, a settlement order made on or after a judicial separation order, and a pension sharing order made before the divorce or nullity order is final. The orders the section mainly reaches are spousal maintenance orders, because the capital orders are largely excluded.

What is not on the list matters just as much. A lump sum payable in one go, a transfer of property and, once the final order has been made, a pension sharing order cannot be varied under section 31; section 31(4A) allows a pension sharing order to be revisited only before it takes effect and before the final order. Where the complaint about a capital order is that assets were hidden or the order was obtained unfairly, the route is an application to set aside under rule 9.9A of the Family Procedure Rules, or an appeal: see hidden assets and non-disclosure.

The same powers exist for civil partners under Part 11 of Schedule 5 to the Civil Partnership Act 2004, paragraphs 50 and 51: see civil partnership dissolution.

Child maintenance orders are different. Section 8(3) of the Child Support Act 1991 removes the court's power to make, vary or revive a child maintenance order where the Child Maintenance Service could make a calculation, but section 8(3A) preserves the power to vary an order made on or after 3 March 2003 unless a calculation has actually been made, and section 4(10)(aa) lets either parent apply to the Service once such an order has been in force for one year. See child maintenance advice.

How the Court Decides a Variation

Section 31(7) sets the test. The court has regard to all the circumstances, gives first consideration to the welfare of any child of the family under 18, and treats the circumstances as including any change in the matters it had to consider when the order was made, which are the section 25 factors.

Where a periodical payments or secured periodical payments order was made on or after the divorce or nullity order, section 31(7)(a) requires the court to consider whether to vary it so that payments run only for such further period as is sufficient to let the receiving party adjust without undue hardship to the payments ending. Where that duty applies, the variation hearing is also a clean break hearing.

Section 31(5) stops the court making a property adjustment, pension sharing or lump sum order on an application to vary spousal maintenance, with one exception. Under sections 31(7A) and (7B), where the marriage has been dissolved and the court discharges the maintenance order or limits it to a further period, it may also order a lump sum, property adjustment or pension sharing, and may direct that the receiving party cannot apply again. That is capitalisation: the income claim is replaced by capital and the order is closed.

Three further powers matter. Section 31(2A) lets the court remit arrears under a maintenance order in whole or in part. Section 31(10) lets it defer the effect of a variation or discharge for a period it specifies. Section 31(14) preserves its power to direct that a variation takes effect from a date earlier than the order making it. Backdating is a discretion, not a right.

Fixed terms are treated differently. Section 28(1A) allows the court, when it makes a term order after a divorce or nullity order, to direct that the receiving party may not apply under section 31 to extend the term. Without that direction an extension can be sought, but section 31(1) is a power to vary an order that exists, so an application to extend has to be issued while the order is still running.

Evidence and Common Problems

The financial statement for a variation is Form E2, which GOV.UK describes as the form to complete if you are applying for a variation of an order for a financial remedy, other than a variation to capitalise an order for periodical payments; capitalisation uses the full Form E. Under rule 9.19 both parties exchange and file their statements, verified by a statement of truth, within the period the rules set after issue. The court decides on evidence, so the change you rely on has to be documented: a redundancy notice and the search for new work, medical evidence, a pension statement, or the other party's new payslips.

The problems we see most often:

• an application to extend a term issued after the term has ended, when there is no longer an order to vary
• a term order carrying a section 28(1A) direction, which bars an application to extend it
• assuming that a former spouse living with a new partner ends maintenance: cohabitation is not one of the events that ends an order under section 28, although it can be raised as a change of circumstances
• cutting payments before the court has varied the order, which builds arrears under an order that remains in force until it is varied
• an income drop with no evidence of why it happened or what has been done about it: earning capacity, including any increase it would be reasonable to expect a party to acquire, is a section 25(2)(a) matter

Section 33A(2) applies the consent order procedure to an application varying or discharging an order for financial relief, so the court may make the agreed order on the prescribed information alone unless it has reason to inquire further. An agreed variation still needs a properly drafted consent order; a private arrangement to pay less leaves the original order in force.

How the Variation Process Works

1. We read the original order, confirm which provisions section 31 reaches, check for a section 28(1A) direction and note the end date of any term.
2. We gather the evidence of the change and negotiate where the other party will engage, using family mediation where it suits. An agreed change is recorded in a consent order, not a side letter.
3. Before issuing, you attend a MIAM unless an exemption applies: rule 3.6 of the Family Procedure Rules applies the requirement to the proceedings listed in Practice Direction 3A, and paragraph 13 of that direction includes a variation order, though the requirement does not apply where the application is for a consent order.
4. The application is issued in the family court. Rule 9.9B(3)(c) puts an application to vary periodical payments on the fast-track procedure, started on Form A1, unless you ask for the order to be dismissed and replaced with a lump sum, property adjustment or pension sharing order, when the standard procedure and Form A apply. Fees are on the GOV.UK court and tribunal fees page, and help with court fees is available to those who qualify.
5. On the fast track the court fixes the first hearing when the application is issued (rule 9.18) and the parties exchange Form E2 (rule 9.19). Under rule 9.20 the court must decide the application at that hearing if it can, unless there are good reasons not to; otherwise it gives directions, and it may use the hearing as a financial dispute resolution appointment.
6. The court makes its order: it can vary the amount or the term, discharge the order, suspend a provision, remit arrears, defer the effect, capitalise under section 31(7B) and, where it does, bar further applications.

When Legal Advice Is Especially Important

Advice matters most where:

• the order runs for a fixed term that is about to end, or you are unsure whether it carries a section 28(1A) direction
• the other side proposes capitalisation and the lump sum has to last for the rest of the term and beyond
• you believe the original order rested on hidden assets or false disclosure, where the right application is to set aside rather than to vary
• the order includes child maintenance and it is unclear whether the court or the Child Maintenance Service now has the power to change it

How RakLAW Solicitors Can Help

We act for people applying to vary an order and for people responding to an application, from our office at 42 Shad Thames in Southwark, near Tower Bridge. We say at the outset whether section 31 reaches the order and whether the change is one the court is likely to weigh, because a hopeless application costs money on both sides. RakLAW is privately funded and does not offer legal aid.

We prepare the evidence and Form E2, negotiate an agreed order where one is available, and issue and run the application where it is not, including capitalisation cases and those with a pension sharing element. Where payments have been missed we advise on enforcement of financial orders alongside the variation. Related topics are on our money and financial settlements hub, our charges on the family law pricing page, and you can book a free consultation to discuss your order.