Frequently Asked Questions
Interest on Arrears of Maintenance
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
(a) at the rate the court orders; or
(b) in the absence of an order, at the prevailing rate
on judgment debt determined by the Chief Justice from
time to time.
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?
Please click here.
You may also 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, 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 –
(a) whether the maintenance payer has
a reasonable excuse for his failure to comply with the
maintenance order;
(b) whether the maintenance payer has evaded service of
court documents;
(c) the maintenance payer’s past record and conduct
in connection with the making of maintenance payments
to the payee under the maintenance order or an undertaking
in any proceedings;
(d) whether the maintenance payer has given the payee
a reasonable explanation for his failure to comply with
the maintenance order; and
(e) the maintenance payer’s ability to pay.
Surcharge on Arrears of Maintenance
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 interest rate
on judgment debt unless otherwise determined 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) judgment summons;
(b) attachment of income order;
(c) garnishee proceedings; and
(d) charging order.
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, 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 –
(a) appear at the hearing; and
(b) pay the full amount or pay punctually in compliance
with the maintenance order,
the court may vary or set aside the order
on such terms as it thinks fit.
[Others]
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 repay the arrears
of maintenance, to revise the payment arrangement, or
to charge the payer’s assets for repayment of arrears
of maintenance. Some examples of enforcement proceedings
for maintenance orders are –
(a) Judgment summons;
(b) Attachment of income order;
(c) Garnishee proceedings; and
(d) Charging order.
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