The economic aspect of divorce

K. ARAVIND

Divorce has been on the rise in recent years. Divorce after a lengthy court case is causing a lot of psychological distress but the number of people who are opting for divorce is increasing. Divorce is a process that involves the financial rights and financial obligations of those involved.

For a person who has no income of his/her own, to give alimony to his/her life ex-spouse is important in the terms of divorce. Courts have ruled that a man who normally earns a living can pay alimony to his wife who has no income of her own. However, in some cases, the court had also ordered the ex-wife to pay alimony to the man. Such judgments often apply to physically challenged men who are unable to earn an income on their own.

The court may pass orders to pay temporary alimony during court proceedings. Once the proceedings are completed and the divorce is legal, permanent alimony is to be paid. It can be paid together or in a fixed amount on a monthly basis. This can be up to the death of any of the spouses or until a date fixed by the court.

There is no set formula for determining the quantum of alimony. The amount of alimony is determined based on the income, standard of living, financial status, assets and financial needs. If the sum is fixed together, it can be one-third to one-fifth of the husband’s total income. The monthly alimony should not exceed 25 per cent of the husband’s income.

If the wife has income but there is a big difference between the assets of the wife and the husband, she can claim the difference from the husband to maintain the standard of living. The alimony does not include financial support for children. If the wife remarries, the husband does not have to pay alimony. However, financial assistance for children should continue to be provided.

It is better to receive a lump sum as alimony than to fix a monthly payment. One reason is the depreciation of the rupee. Money received tomorrow may not have its value today. Together, alimony is not taxable. At the same time, the monthly payment of alimony is taxable. If the husband loses his job, the wife may not receive monthly alimony.