Take financial responsibility for maintenance payments to avoid being blacklisted
According to new regulations under the Maintenance Act, maintenance defaulters can be blacklisted and blocked from getting credit.
Since January 2018, if the defaulting parent cannot be traced, the court can grant an order directing cellphone service providers to give the court the last known information of the person in question, said Alexander Forbes Financial Planning Consultants senior wealth manager Kerry Sutherland.
Being blacklisted could mean struggling to get access to credit. “This could be anything from trying to buy a new car, rent a house or sign a contract with a cellphone provider or insurance company. The new legislation is taking defaulters much more seriously,” she said.
“According to the law, parents have a legal obligation to provide a minor with food, housing, clothing, medical care and education or with means that are necessary for providing the person with these essentials. This is a legal duty and is called the “the duty to maintain”. Sadly, divorce is expensive, it means there are now costs for two homes in addition to maintaining the children. If you are the partner paying maintenance, and your financial circumstances change, the onus is on you to approach the maintenance court immediately because the money you owe doesn’t go away if you default on payments. Your outstanding payments will continue to grow and you will eventually have to settle in full.”
“If you are owed money from your ex-spouse, you can get a court order to have their debtors pay you, or compel their employer to pay the salary into your account.” The employer is liable to inform the maintenance court if the employee resigns or is retrenched.
Sutherland said divorce agreements could vastly differ, and one school of thought was to receive a large lump sum payment upfront. You can do this if you are concerned about receiving ongoing monthly payments. Of course, not everyone has enough money to pay this upfront large lump sum. “If you are married in accrual but out of community of property, you divide all assets accrued during the course of the marriage (less 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.”
To avoid being blacklisted, here are some tips to help you set up an amicable maintenance agreement:
Set a realistic amount the non-custodial partner can afford so that they do not default. Most spouses have an idea of their ex partner’s earning power. What we see in practice is that many spouses’ think the other earns more than they actually do and has assets hidden away.
Consider paying for school fees annually in advance to take advantage of the discount offered.
Consider setting up a joint bank account to which both spouses contribute every month. This can be used for expenses that will vary over time such as extra murals, extra lessons, school trips, birthday presents or parties.
In some divorce agreements, parents have an arrangement that the one pays 100% of education and related expenses and the other pays for all other expenses related to maintaining the child.
Garnishing orders and blacklisting are highly stressful and emotionally draining to all involved including the children. 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.