What is lump-sum maintenance?

​At the end of a divorce, the court can grant a few types of maintenance orders to be made and one of these is lump-sum maintenance, which is a single payment made to the ex-spouse. 

Under what circumstances will the court order lump-sum maintenance?

As summarised in the case of AYM v AYL and another appeal [2014] 4 SLR 559 (“AYM v AYL”), this is usually done when there is a need to: 

• Allow for a clean break in the marriage, especially when both parties have new families and have moved on with their respective lives;
• Avoid further legal action from either party and prevent further resentment between both parties; and
• Where one party is unlikely to keep up with monthly payments.

Such an order would not or is unlikely to be made in cases where:

• Children are involved, as a clean break is rarely desirable for the children; and
• It would cripple the husband financially.

However, these factors are not exhaustive and are subject to other considerations. 

How do the courts calculate the amount for lump-sum maintenance?

To calculate the amount of lump-sum maintenance to be paid, the court multiplies the sum they determine the spouse should receive monthly to a lump-sum multiplier (“the Formula”) developed by the court in Ong Chen Leng v Tan Sau Poo [1993] 2 SLR(R) 545 (“Ong Chen Leng Multiplier”):

The following is an example of an application of the Formula: 

Average life expectancy of a woman in Singapore: 85 years old

Usual retirement age of a Singapore male worker: 65 years old

Age of the wife at the time of divorce: 66 years old

Court determines that the wife requires $2,000 a month, or $24,000 a year

Therefore, the amount that needs to be paid in a lump-sum is: 

The court does not strictly apply the Formula to determine the amount for lump-sum maintenance

The courts do not strictly apply the Formula. The court in TNL v TNK and another appeal and another matter [2017] 1 SLR 609 acknowledged that the Ong Chen Leng Multiplier was not intended to be the only method for quantifying the appropriate multiplier for lump-sum maintenance.The court considers other factors as well, such as the actual lump-sum multiplier sought by the wife. The court may choose to follow the wife’s wishes rather than strictly rely on the Formula, and if the lump-sum is to be made upfront, the amount may be discounted.  Further, section 114(1) of the Women’s Charter (Cap 353, 2009 Rev Ed) makes it clear that the court must have regard to all the circumstances of the case when assessing maintenance, including but not limited to: 

• the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future;
• the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
• the standard of living enjoyed by the family before the breakdown of the marriage;
• the age of each party to the marriage and the duration of the marriage;
• any physical or mental disability of either of the parties to the marriage;
• the contributions made by each of the parties to the marriage to the welfare of the family, including any contribution made by looking after the home or caring for the family; and
• in the case of proceedings for divorce or nullity of marriage, the value to either of the parties to the marriage of any benefit (for example, a pension) which, by reason of the dissolution or annulment of the marriage that party will lose the chance of acquiring.

Lastly, it must be noted that the court’s power to order maintenance is supplementary to the power to order the division of matrimonial assets, and that proceeds from the division of matrimonial assets should be the main source of financial support in a divorce. The award of maintenance should be no more than what is necessary to “weather the transition of the divorce”. In line with this principle, the court can consider a multiplier to be “too generous” and order a reduction of the amount of lump-sum maintenance to be paid. 

Conclusion

Lump-sum maintenance is one of the many maintenance orders the court can make in a divorce. If you are currently undergoing a divorce and seeking maintenance for yourself, it is crucial to understand your entitlement and the relevant laws in Singapore. Engaging a knowledgeable and experienced lawyer will help guarantee the most favourable result possible.