Call local rate
Mon - Fri 8:30am - 7pm | Sat - Sun 9am - 5pm
Call local rate 0330 383 0319
Mon - Fri 8:30am - 7pm | Sat - Sun 9am - 5pm
Call us: Mon - Fri 8:30am - 7pm, Sat - Sun 9am - 5pm
Divorce calculator. Understand what you may be entitled to, in just 10 minutes. Use the calculator

Being made redundant during divorce

Being made redundant is unlikely to be an easy experience. Some people will have warning about their redundancy, but for others it may be very sudden and can cause considerable stress and anxiety.

read more

If you are also going through divorce at the same time, the two life-changing events can seem overwhelming.

It is important firstly to ensure that your lawyer is informed of your redundancy as soon as possible so they can consider what further action may need to be taken in relation to your divorce. For instance, you may need to amend your financial disclosure based on your redundancy package and short-medium term change in income. This will not necessarily change things negatively or positively. However, it is a factor that will need to be considered and shared with your ex-spouse and their legal team in line with full and frank financial disclosure.

We offer an award winning service

How to: Reviewing your financial discloure Download our free financial disclosure guide

Is my redundancy package a marital asset?

Whether your redundancy package is considered a marital asset depends on the circumstances surrounding your redundancy.

read more

If you had been aware that you may be made redundant before you separated from your ex, then the package may well be included in the matrimonial pot. This is because your spouse would have been able to share in the package if you had stayed together.

However, if the redundancy happened after separation, there is an argument that the package is not a marital asset, given that it did not exist during the marriage. Additionally, the sole purpose of a redundancy package is to compensate the individual employee for their loss of employment and therefore it may not be regarded as something to be shared.

Where this may come into debate is if alternative employment is found before statutory redundancy pay expires. If the individual is not entitled to statutory pay, but employment is found quickly, it may also be difficult to argue that the package should not be included, as income is renewed and the redundancy package will be viewed as an additional asset.

Redundancies will be dealt with on a case-by-case basis, and it may well be possible to argue that the redundancy package should not be shared. However, you should seek immediate advice from a family lawyer to fully understand the impact on your specific case as this will need to be assessed alongside all other factors within your matter.

How to: a beginner's guide to mediation Download our free mediation guide

Will my redundancy impact the financial agreement?

If you are made redundant after separation or during your financial negotiations, your redundancy may well impact the financial agreement. It is important to inform the relevant people about your change in circumstances and amend your financial disclosure accordingly.

read more

For example, although the arguments as outlined above can assist in trying to ringfence a redundancy payment, ultimately most financial matters are determined largely by an assessment of each party’s respective needs.

Therefore, if the additional funds provided by the redundancy are required to ensure that both parties are put in a position to move forward within their lives then a court may decide that this must be shared in some way with shares to be determined. However, if this is not required or it is clear that the party being made redundant will need these funds to support themselves for a period it may be more appropriate to ring fence the redundancy.

Financial matters upon divorce can be complicated with many factors at play and therefore it is important to seek legal advice if you encounter these sorts of circumstances whilst within the process.

Stowe Support
A range of tools to help you through your relationship breakdown and beyond.
How to: A beginner's guide to divorce Download our free divorce guide

Will my redundancy affect child/spousal maintenance payments?

If a financial order has been granted, and maintenance orders are made as part of it, a redundancy could affect the payments agreed especially as maintenance orders are subject to variation.

read more

For example, should the paying party be made redundant after the financial consent order has been put in place, it is their responsibility to make an application to the court to vary the level of maintenance.

This may be a difficult case to argue, however, as redundancy packages are offered to compensate the employee for loss of employment, and the court may view it as a fund from which to continue maintenance payments.

Nevertheless, future earning potential will be considered and if there is clear evidence that the redundancy package may deplete before new employment can be found, an application to vary the maintenance order can be made.

In the same way, should the paying party simply cease payments without this having been agreed or varied formally by the court, the receiving party can issue enforcement proceedings in order that these payments might resume. Again, during these proceedings the court would look at the resources available whilst assessing what would be reasonable in the circumstances.

Negotiating a financial settlement with redundancy

Some couples can negotiate between themselves, or through their lawyers. Others may need to use alternative methods to reach an agreement.

Options for out-of-court resolution are:

  • Mediation, including traditional, hybrid, online, shuttle and child-inclusive
  • Collaborative divorce
  • Arbitration
  • Private financial dispute resolution hearing

If you are unable to agree, the court will step in.

Close

Newsletter Sign Up

Sign up for advice on divorce and relationships from our lawyers, divorce coaches and relationship experts.

What type of information are you looking for? (Optional)


Read about how we use your data in our Privacy Policy. To opt out at any time, select ‘unsubscribe’ in any of our marketing communications, or email [email protected].

Privacy Policy
Close
Close