Income and earning capacity of the parties
Income and earning capacity of the parties

The following Family practice note provides comprehensive and up to date legal information covering:

  • Income and earning capacity of the parties
  • Quantifying income
  • Earning capacity
  • Primary carers
  • Employment choices
  • Party not in employment
  • Earning capacity at date of marriage

Income and earning capacity of the parties

By virtue of section 25(2)(a) of the Matrimonial Causes Act 1973 (MCA 1973), the court must give consideration 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, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire.'

Equivalent provision is set out in Schedule 5, Part 5, para 21(2) to the Civil Partnership Act 2004.

The significance and weight to be given to income and earning capacity may vary depending on age and circumstances, for example a spouse/civil partner who has not worked for many years during a long marriage due to child care responsibilities may not have the same earning capacity expectations as a younger party who does not have children.

Earning capacity is particularly pertinent as to the quantum of any order for periodical payments, see Practice Note: General principles—spousal/civil partner periodical payments, but is of general significance, see Practice Note: Compensation, sharing and equality. Both the earning capacity of the recipient and the paying party can be relevant.

Quantifying income

In most cases a party's income will be self-explanatory, particularly where a party is employed and their

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