Section 15 (1) of the current Maintenance Act, deals with the duty of parents to support their children, and the liability of persons to support children who are unable to support themselves. If the maintenance debtor left his or her employment, the duty of support shall not terminate as it is expected to continue.
The Maintenance Act currently does not regulate future maintenance, as it firstly does not provide clarity on when an application for future maintenance can be made. Secondly, it does not indicate who is responsible for administering the benefits that are eligible for attachment or execution under a warrant, such as any pension benefit, annuity, gratuity or compassionate allowance or other similar benefit.
Section 26 of the Act, which deals with enforcement of maintenance orders, do not allow an applicant for maintenance to claim future maintenance from the party that has an obligation to maintain. Section 26 suggests that an enforcement claim can only be made where there is default following an order for maintenance.
Section 31 of the Act, which deals with offences relating to maintenance orders, only creates offences for the recovery of arrear maintenance and maintenance that is required for the present needs of the beneficiaries. Similarly, the provisions of section 40 (1) which deals with recovery of arrear maintenance allows the court to grant an order for recovery of any amount a maintenance debtor has failed to pay as per maintenance order, plus interest accrued. All these processes are not forward looking and does not deal with issues of future maintenance that are not yet due and payable. The issue of whether future maintenance can be claimed has so far been left to the courts to exercise their discretion in making decisions about whether or not to make an order for future maintenance.
Notwithstanding the legislative shortcomings court cases exist where judges and magistrates have made findings on future maintenance. The following cases illustrate instances where courts have used their discretion in making orders for future maintenance, despite the absence of a provision dealing with this issue in the Act:
In one case the father had voluntarily stopped working precisely so that he would not be expected to pay maintenance. An application for execution against the father’s pension was unsuccessful, because the Pension Fund Adjudicator was of the view that the said funds were not regulated by the Maintenance Act. On appeal to the High Court, the Court ordered that the said money be attached to pay for future maintenance of the children. The court held that to refuse the application would be to undermine the rights of children and disempower women, but to grant it will be to thwart an unreasonable, unwilling father who has no respect for the provisions of the maintenance court order or his common law duties to maintain his own family.
In another case the father had been retrenched. What the court had to decide was whether his pension fund money and retrenchment package could be withheld from him, so as to benefit (be paid out to) individuals that he was responsible to maintain. The court ordered the attachment of the father’s benefits to secure his child’s future maintenance claims. The court held that even though the father was not in arrears with his maintenance payment and was not attempting to avoid the maintenance order, his previous conduct did not create in impression that he was willing to abide by the maintenance order. So, the attachment of his pension benefits for future maintenance was a direct and effective means of ensuring that the rights of the child and the dignity of women were upheld.
In another matter the High Court granted an antidissipation interdict to prevent the maintenance defaulter from making withdrawals from his annuity until such time his child becomes self-supporting; except with the leave of the applicant or the maintenance court. This interdict secured the future maintenance of his child because it prevented the maintenance defaulter from depleting or dissipating the funds of the annuity. The court further directed the fund to make periodic payments to the maintenance applicant for the benefit of the child.
In other similar cases, courts have attached annuities or the proceeds of the sale of immovable property to secure the future maintenance rights of children. In on matter the High Court granted the applicant an interdict prohibiting payment of the proceeds of the sale of an immovable property to her ex-husband. The applicant’s ex-husband had fallen into arrears on his maintenance payments as ordered by the divorce court. The court in this case acknowledged that there was no precedent for it to grant an attachment to secure future maintenance but held that there was scope for the extension of the Maintenance Act for it to make such an order, as the court could exercise its inherent powers to grant an order it would be entitled to award under common law.
The common thread in previous cases is that orders for future maintenance were granted by High Courts in various Provincial Divisions and the courts have taken a lead in rectifying this anomaly in the legislation. In all cases, the maintenance courts had been unable to assist the applicants for maintenance, mostly because the Act is silent or does not regulate future maintenance, but only deals with arrears.
Views:
The South African Law Reform Commission (SALRC) has approved the publication of a discussion paper on the Review of the Maintenance Act 99 of 1998, for public comment. The discussion paper sets out the SALRC’s preliminary recommendations for law reform regarding certain aspects in the Maintenance Act 99 of 1998. One of the most important recommendations made, was the possibility to attach retirement insurance for future maintenance arrears.
The attachment of retirement insurance for security for future arrears is a difficult issue that raises a number of concerns and pension benefits should be applied only in cases where maintenance debtors have demonstrated their intention not to comply with their obligations and to succeed an applicant would have to prove that the maintenance debtor will dissipate the funds and thereby obstruct the beneficiaries’ maintenance claims.
The commission’s proposal for attaching future maintenance, seems to be a practical approach, namely, that the attachment order for future maintenance should be based on:
“Monthly maintenance X 12 (for a year) X number of years to complete school and/or tertiary studies. This amount must be adjusted annually in accordance with the weighted average of the Consumer Price Index”.
Living annuities (not Retirement Annuities, Pension or Provident Funds) has been developed by insurance companies specifically to counter attachments of debt against retirement annuities. With regard to a retirement annuity, it is possible to attach from the capital lump sum for arrear maintenance, but this cannot be done from a living annuity Once a pension or annuity is converted into a living annuity, underwritten by an insurer, it is then owned by the insurer and not the annuitant. As such it will no longer be an asset to able to be incorporated as assets in the annuitant’s estate available for attachment as security for future maintenance. Living annuities provide month-to-month or periodical income depending on the annuitant’s draw down rate, which can be as low as 2.5% but the capital would remain an asset in the hands of the insurer and not the debtor, therefor once an annuity or pension is converted only the month-to-month periodical payments will be capable for attachment (by way of a garnishee order) and not the capital. In divorce matters the Supreme Court of Appeal recently held that held that annuity income (not the capital) is an asset in an estate, which is subject to accrual.
Although the commission is of the view that sections 16 (2) (a) (iii) and 26 (4) of the Maintenance Act should be amended to include a living annuity as an asset in the estate of a maintenance debtor, it remains to be seen how the capital could be attached.
To succeed with a maintenance, claim a party needs to show that there is a need for maintenance and whether the amount claimed is within the means of the maintenance payer. If for example an annuitant, on the good and sound financial advice of his insurance broker converts a pension or annuity into a living annuity to earn month to month income, a court will have to determine whether the monthly amount to be attached is within the “means” of the maintenance debtor having regard to the debtor’s financial circumstances, since attachment of the full income will leave the maintenance debtor without any income whatsoever.
Written by: Bertus Preller, Family and Divorce Law Attorney at Maurice Phillips Wisenberg in Cape Town.