1. What is the reason for requiring maintenance payers to pay interest on arrears of maintenance?
Interest on arrears of maintenance aims to compensate maintenance payees for the loss of interest on their savings, or for the interest payable by them in respect of loans that they have to obtain due to the maintenance payer’s default or delay in making maintenance payment(s).
2. When will a maintenance payee be entitled to interest on arrears of maintenance?
On the commencement of the Ordinance, i.e. 1 May 2005, if a maintenance payer fails to make FULL payment or PUNCTUAL payment in compliance with a maintenance order, a maintenance payee is automatically entitled to interest in respect of the arrears of maintenance which accrue on or after that date.
NOTE: Arrears of maintenance accrued before 1 May 2005 are not subject to interest.
3. What is the interest on arrears of maintenance?
Arrears of maintenance is to carry simple interest
4. What is simple interest?
Simple interest means that interest generated at the end of a period will not attract further interest in the following period. In other words, interest accrued and yet to be paid will NOT attract interest.
5. How should interest on arrears of maintenance be calculated?
Interest on arrears of maintenance is to be calculated according to the following formula - (P x R x T) / N
where P = outstanding maintenance
R = interest rate (rate specified by the court or the interest rate on judgment debt)
T = number of days in the period (from the day following the due day of payment specified in the maintenance order to the day of actual payment of the arrears)
N= number of days in the relevant calendar year
6. Where can I check the prevailing interest rate on judgment debt?
You may visit the Judiciary's website.
7. Can a maintenance payee claim interest on all arrears of maintenance previously accrued?
A maintenance payee cannot claim interest on arrears of maintenance accrued before the commencement date of the Interest and Surcharge on Arrears of Maintenance Ordinance 2003, that is before 1 May 2005.
In respect of arrears that are due for more than 12 months, under the Matrimonial Proceedings and Property Ordinance (Cap 192), a maintenance payee also needs to obtain the court’s permission for enforcing the payment of such arrears and the interest thereon.
8. Can a maintenance payer refuse to pay interest?
If a maintenance payer considers that he has reasonable ground(s) not to pay the interest on arrears of maintenance, he may, within a reasonable time after having knowledge of the requirement to pay, apply by summons to the court not to pay the interest and set out his ground(s) in the application.
9. What are the factors that the court will take into account when considering a maintenance payer’s application for not paying interest to the payee?
The court will consider all factors, including (but not limited to) the followings –
1. Why should the court be given discretion to impose surcharge when there already is a scheme for interest on arrears of maintenance?
Surcharge on arrears of maintenance is to serve as a deterrent against the blameworthy conduct of a maintenance payer who, without reasonable excuse, repeatedly fails to make full and punctual payment in compliance with the maintenance order. This is different in nature from interest on arrears of maintenance. The latter aims to compensate maintenance payees for the loss of interest on their savings or interest payable owing to debt incurred as a result of the default in maintenance payment.
2. How can a maintenance payee obtain a surcharge on arrears of maintenance?
Where a maintenance payer, without reasonable excuse, repeatedly fails to pay the full amount or fails to pay punctually in accordance with the maintenance order, the maintenance payee can apply to the court for an order requiring the maintenance payer to pay a surcharge on the arrears of maintenance accrued on or after 1 May 2005.
3. Is court’s approval required for getting both interest and surcharge on arrears of maintenance?
Maintenance payees are entitled to interest on arrears of maintenance automatically at the prevailing interest rate on judgment debt determined by the Chief Justice from time to time unless the rate is ordered by the court. On the other hand, only the court is empowered to impose a surcharge on arrears of maintenance in cases where the payer has defaulted repeatedly without reasonable excuse.
4. What is the maximum surcharge that the court may impose on a maintenance payer?
The amount of surcharge payable by the maintenance payer shall not exceed 100% of the total arrears of maintenance calculated from the date on which the arrears first accrued (which should be a date on or after 1 May 2005) to the date of payment of the surcharge.
5. How can a maintenance payee apply to the court for a surcharge?
A maintenance payee may apply for a surcharge in the same proceedings where he/she is seeking enforcement of the maintenance order. Such proceedings include –
A maintenance payee may also apply for a surcharge through a special summons procedure as laid down in the Ordinance. Please click here for more information.
6. Can a maintenance payee apply for surcharge in respect of all arrears of maintenance previously accrued?
A maintenance payee cannot apply for a surcharge in respect of arrears of maintenance that accrued before the 1 May 2005.
In cases where the arrears have become due for more than 12 months, under the Matrimonial Property and Proceedings Ordinance (Cap 192), if the court grants leave to enforce such arrears of maintenance, surcharge if any will be calculated from the date specified by the court as being the date on which the payee is entitled to enforce payment of the arrears. In other words, a maintenance payee needs also to seek the court’s approval for claiming surcharge on arrears of maintenance that have become due for more than 12 months.
7. What can a maintenance payee do if the maintenance payer fails to comply with the surcharge order?
If the maintenance payer fails to pay the surcharge ordered by the court, the maintenance payee may seek enforcement of the surcharge order through the usual enforcement proceedings, e.g. judgment summons. In the case where the surcharge is granted in the proceedings for enforcement of a maintenance order, the payee may refer to the order of the court made in those proceedings and take appropriate follow up actions. He or she may also seek recovery of the surcharge in the District Court as if the same is a civil debt due to him or her.
8. I am a maintenance payer. I was out of town when the hearing of the application for surcharge order took place. I have justifications for not fully complying with the maintenance order. How can I ask for the surcharge order to be varied or set aside?
Within a reasonable time after having knowledge of the order, you may apply by summons to vary or set aside the order.
If the court is satisfied that there is reasonable excuse for your failing to –
the court may vary or set aside the order on such terms as it thinks fit.
1. What are enforcement proceedings?
Where a maintenance payee considers that the payer has failed to comply with the original maintenance order, say, he has failed to pay the maintenance in full or pay punctually, the payee may institute proceedings to enforce the maintenance order. The purpose of the enforcement proceedings in this context is to apply to the court, among other things, to direct the payer to pay the arrears of maintenance, to revise the payment arrangement, or to charge the payer’s assets for securing payment of arrears of maintenance. Some examples of enforcement proceedings for maintenance orders are –