Compensatory allowance is a lump sum paid to one of the spouses at the time of the divorce. It is intended to compensate for the disparity in living conditions that divorce creates for the spouses. Usually, this allowance must be paid as a lump sum. However, it is possible to organize a payment in yearly or monthly installments, provided for a maximum period of eight years. The divorce agreement must specify the nature of the allowance.
The nature of the compensatory allowance
The compensatory allowance is intended to rectify the imbalance in the spouses’ living conditions caused by divorce. It is not aimed at compensating for income disparities.
Article 270 of the French Civil Code provides that at the time of divorce “one of the spouses may be required to pay to the other a benefit intended to compensate, as far as possible, for the disparity that the end of the marriage creates in the respective living conditions of the spouses. »
To calculate this allowance, the judge will take into consideration a number criteria, in accordance with article 271 of the Civil Code :
- the duration of the marriage,
- the age and health of the spouses,
- their qualifications and professional situation,
- the consequences of the professional choices made by one of the spouses during the marriage for the education of the children and the time that will still have to be devoted to it, or to favor the career of his or her spouse to the detriment of his or her own,
- the estimated patrimony of the spouses, after the liquidation of the matrimonial regime.
These criteria are non-exhaustive : therefore, the judge might decide to calculate compensatory allowance on the basis of other elements.
The income taken into account in the allowance calculation
In order to calculate the compensatory allowance, the judge will take into account the income received by the spouses during their professional lives, but also their income (rents, life insurance…). Social benefits (unemployment benefits, retirement, etc.) are also included in the calculation.
All the components of the spouses’ assets are taken into account in the calculation of the allowance.
As the compensatory allowance is intended to restore a balance in the disparity of living conditions caused by the divorce, the judge will have to evaluate a “minimum income to live on”, i.e. expenses for housing, food, health care, clothing, etc. Specific expenses, such as maintenance of the children or payment of a previous compensatory allowance, will reduce the available part of the resources for the compensatory allowance.
Assessment of the situation at the time of the divorce
The compensatory allowance must be requested at the time of the divorce. It should be noted that a difference in income between the spouses does not automatically entitle one of them to this allowance : it is up to the judge to decide whether this benefit is justified or not. Therefore, a disparity of income between the spouses is not enough of a criteria to decide on a compensatory allowance.
The estimated or foreseeable patrimony of each spouse after the dissolution of the matrimonial regime will therefore be examined by the judge to determine the compensatory allowance, in accordance with article 271 of the French Civil Code.
In a 2018 decision, the French Supreme Court of Appeal has stated that elements prior to the marriage cannot be taken into account in the calculation of the compensatory allowance: only the marriage is taken into account. Therefore, if the spouses lived together several years before getting married, these years of living together cannot be taken into account in the calculation of the compensatory allowance.
Assessment of the situation in the foreseeable future
The judge may also take into account what is called the “foreseeable future.” According to case law, this foreseeable future corresponds for example to the retirement of one of the spouses. It can also be a forthcoming professional change that would affect the income of one of the spouses. On the other hand, succession cannot be taken into account. Similarly, the perspective of receiving a pension payment in the event of the death of one of the spouses cannot be taken into account in assessing what is a “foreseeable future”.