How does cohabitation impact my financial settlement?

How does cohabitation impact my financial settlement?

Marriages break down for all sorts of reasons. Sometimes, this is due to infidelity. You may find yourself in a position where your spouse is cohabiting with someone else, or you have met someone new and want to cohabit. If you are in this position, you need to consider how cohabiting can impact your financial settlement on divorce.

Will the court say that we are cohabiting, even though I am just staying there a few nights a week?

It is often difficult to establish that a couple is cohabiting. To assist with this, we have to look at what the Case Law says and the case of Kimber -v- Kimber is a helpful reminder. The Court in this case had reviewed the criteria used by Social Security Authorities upon which they demonstrate a state of cohabitation.  It concluded that cohabitation was as follows:

  1. The parties were living together in the same household.
  2. The living together involved a sharing of daily tasks and duties.
  3. There was stability and permanence in the relationship.
  4. The financial affairs of the couple were indicative of their relationship.
  5. Their sexual relationship was admitted and ongoing.
  6. There was a close bond between the third party and the children.
  7. The motives of the couple.
  8. Evidence that cohabitation existed was in the opinion of a reasonable person with normal perceptions.

How can cohabitation impact the financial settlement on Divorce?

The impact and consequences of cohabitation are far-reaching especially when considering a person’s needs, especially when considering a claim for spousal maintenance. Cohabitation can affect your monthly expenditure. Being the economically weaker party and living with a partner can increase your ability to meet your own needs as it would be expected that your new partner would contribute towards the house. When considering the new partner’s contributions, the Court is not confined to what the new partner is contributing but what they ought to be contributing and if they can afford to pay, they will be expected to do so. The Court has very wide discretion and it is a matter for each Court to make its own assessment based on all the facts of the case.

Conversely, if you are the economically stronger party and you cohabit, this may make spousal maintenance more affordable.

Where maintenance payments are being made, there is no automatic provision in English Law for termination of maintenance because of cohabitation, unless the Court Order expressly provides for this. Also, the law does not class cohabitation as the same as remarriage as upon remarriage, the maintenance payments cease.

Cohabitation can have an impact on the financial settlement, and it can also have an impact on Maintenance Orders being varied. There is a greater risk that if you wish to cohabit that you may stand to lose tax-free maintenance payments.  It is therefore extremely important to consider the financial impact of cohabiting with a new partner.

Get in touch with our specialist divorce solicitors 

We have a wealth of experience in advising clients with regards to the variation of Spousal Maintenance Orders and how cohabitation could impact their financial award. If you would like advice and support regarding divorce and finances, contact our Family Law team today on 0330 0945 500, email family@nevesllp.co.uk or complete our online contact form and we will get back to you.