In the event of a divorce, one of the parties may apply for a compensatory allowance from the other party. This application is possible if there is a difference in the standard of living between the former spouses following their divorce. In this article, Mr. Antoine Beraud, a lawyer at the Marseilles Bar, explains the characteristics and the various modalities inherent to this compensatory benefit.
What is meant by compensatory allowance?
The compensatory benefit, also called compensatory indemnity, is an aid paid by one of the ex-husbands to the other in order to rebalance the financial situation after a divorce, whether the divorce is amicable or contentious. Contrary to popular belief, it can be requested by any party if one has a higher standard of living than the other (husband or wife).
Care must be taken to make a clear distinction between compensatory benefits and alimony. As Mr. Beraud explains, while both benefits are financial, the notion of compensatory allowance only concerns the difference in standard of living following divorce.
How to set up a compensatory allowance
The compensatory benefit is considered at the time of the pronouncement of the divorce, and not before. Be careful, however, as it is to be requested during the procedure. In order to determine the amount, several elements are taken into consideration, namely:
- The number of years of marriage;
- The age of both spouses;
- Dependent children;
- The state of health of the spouses;
- The difference in income;
- Spouses’ assets;
- Career choices and professional sacrifices for the good of the household;
- Everyone’s rights at retirement.
With regard to the payment of the compensatory benefit, it should be noted that before the 2000 reform, it was regulated as a lifetime pension. From now on, the compensatory benefit is in the form of a lump sum paid for a fixed period of time, over a maximum of eight years. However, in certain cases, it can continue to be paid out as a lifetime annuity, for example in the event of a critical illness or very old age.
While the compensatory benefit is very generally paid out in a lump sum, it should be noted that several forms are possible. For example, it can take the form of movable or immovable property, or a combination of cash and an allocation of assets.
A revision of the compensatory benefit is quite possible. The application must be addressed to the family court, in particular by the creditor spouse if he or she wishes to extend the period of payment, or by the creditor spouse if his or her resources are no longer sufficient to ensure payment. The judge considers the application, and may rectify, suspend or cancel the compensatory allowance.
In all cases, even in the case of an amicable divorce, it is strongly advised to take advice from a lawyer specialising in family law, such as Maître Antoine Beraud and his team. You can thus take stock of your personal situation and find the most suitable alternative.