Compensatory pension in family law
Definition and essential aspects of the compensatory pension
This is the amount of money that one spouse gives to the other when there is a marital breakdown in which there is an economic imbalance between the parties.
The compensatory pension must be requested by whoever understands that the economic imbalance has occurred with the separation or divorce, and it is granted as long as this situation is accredited.
The compensatory pension may be agreed between the parties or it may be requested in court.
The factors to be taken into account when setting the compensatory pension are mainly:
- The age and state of health of the spouse applying.
- Professional qualifications and employability.
- Past and future dedication to the family.
- Duration of the marriage...
Compensatory pension must always be applied for at the time when the separation or divorce proceedings are initiated, otherwise any rights you may have had in this respect will be forfeited.
Article 97 of the Civil Code, which regulates the figure of compensatory pension
Article 97 et seq. of the Civil Code are responsible for regulating the figure of the compensatory pension. Specifically, it is a benefit that, after a divorce or separation, one of the spouses receives from the other. Its aim is to alleviate the economic imbalance produced by the end of the relationship. Here we would like to tell you everything you need to know about it.
What is the compensatory pension intended to achieve?
Compensatory maintenance is not to be confused with alimony, as its purpose is not to cover the basic needs of the spouse receiving it. Likewise, it is not intended to equalise the assets of both spouses. As we said before, it has the purpose of 'compensating' the economic imbalance produced after the separation.
Let's give an example to make it clearer. Imagine a married or unmarried couple in which, before consolidating the relationship, both spouses had their respective jobs. However, after that time, the woman becomes pregnant and decides to leave her job to take care of the children while the man continues to work.
Over the years, the couple decided to separate. The man will have developed his professional career during those years and probably has a permanent job. The woman, on the other hand, starts from a disadvantaged position to re-enter the labour market and regain the income she had before the marriage. It is in such cases that divorce settlements usually provide for compensatory pensions.
What criteria establish that the payment of alimony is due?
One spouse can collect alimony from the other spouse if they mutually agree to this at the time of negotiation of the settlement agreement. It can also be determined by a judge by means of a judgment if a legal separation is reached. In any case, it can never be granted ex officio. It is obligatory for the injured party to request it at the beginning of the process. If he/she does not do so, he/she will lose the right to receive it.
Obviously, the process becomes quite complicated when it is a judge who has to decide whether or not the disadvantaged spouse is entitled to receive a compensatory pension. In this regard, Article 97 of the Civil Code establishes a number of criteria that the judge is obliged to examine. They are as follows:
- The age and state of health of the spouses.
- Possible agreements reached prior to the court proceedings.
- The amount of time the disadvantaged spouse has devoted to the family and will devote to the family in the future after separation.
- The likelihood of getting a job based on their professional experience and educational background.
- The duration of marital cohabitation and marriage.
- The possible collaboration with the economic activities of the favoured spouse.
- The financial needs of both spouses after separation.
- The loss of entitlement to another pension linked to the marriage.
- the situation prior to the marriage
- The property regime that both spouses accepted at the time of marriage.
After all this, the Civil Code adds "or any other relevant circumstance". A sort of disaster box in which the judge can take into consideration any other aspect that he considers important.
Characteristics of compensatory pensions
It follows from the above that maintenance payments are not in the nature of alimony. It also follows that they are not possible compensation for the materialisation of the divorce or a way of rebalancing the assets of both spouses.
On the basis of the above criteria, the judge will determine the amount of the compensatory pension and the length of time for which the disadvantaged spouse will receive it. Provided, of course, that a mutually agreed settlement agreement has not been signed that establishes these elements.
Types of compensatory pensions
Podemos diferenciar dos en base a su duración en el tiempo:
- Unlimited. That is to say, without time limitation. The spouse who is disadvantaged by the divorce will receive it indefinitely if the settlement agreement so determines.
- Temporary. It ceases to be received as soon as the economic imbalance disappears. This may be due, for example, to the arrival of retirement age or the attainment of a permanent job, among many other aspects.
The form of payment also allows us to differentiate between two types of compensatory pensions:
- Lump-sum payment. One spouse pays the other spouse the full amount. It is unusual for this to be done financially. The most common is for the spouse to cede his/her share of ownership of the marital home to the other spouse in order to settle the debt. It should be emphasised that the lump-sum arrangement extinguishes the right to receive the widow's/widower's pension in the future.
- Periodically. Generally, every month, although another frequency may be established if agreed by both parties.
Other aspects of interest
According to Article 99 of the Civil Code, the maintenance allowance can be replaced at any time by other benefits such as the usufruct of real estate or an annuity.
The amount of the maintenance allowance is not fixed. It may be altered if both spouses decide to do so after amending the agreement. The same applies if the financial situation of the obligor worsens significantly or if the other spouse's assets increase. It can also increase if the paying spouse improves his or her financial situation.
Special mention should be made of the fact that, if the former obligor dies, the obligation to pay the maintenance allowance may fall on his or her heirs. If the former spouse remarries or simply starts living with someone else, he or she will no longer receive the pension.
All in all, alimony is a complex issue in legal terms. Therefore, if you are thinking of applying for it or are not sure whether you should pay it to your ex-spouse, please contact our experienced team of family lawyers. We will advise you and help you in everything you need.
At G. Elías y Muñoz Abogados, we have family lawyers dedicated exclusively to the practice of Family Law who will provide you with comprehensive advice on everything related to this matter, informing you of all the rights and obligations that correspond to you and advising you on the most appropriate way to proceed in each case.
You can make an appointment at any of our offices in Madrid, Majadahonda or Pozuelo de Alarcón or if you prefer, you can speak to one of our lawyers specialising in Family Law by calling 91.571.17.87 from 9am to 2pm and from 4pm to 8pm, who will advise you on the steps to follow in your specific case.
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