Maintenance calculation for internationals – part 4: allowances & high costs
The third blog in this series on maintenance calculation for internationals listed the allowances that internationals usually receive. Most of these allowances are offset by substantial costs associated with an international lifestyle. How are these costs taken into account?
Extra costs for internationals
When internationals are recalled to their home country, or in the event of dismissal or incapacity for work, they lose their international status, resulting in a significant drop in income. Their pension is usually less than half of the income they were accustomed to, and in addition, their pension is no longer exempt from local taxes. The need to save in order to cushion this major loss of income is therefore greater than average for internationals. They also incur additional costs to maintain contact with family and friends. Is this taken into consideration?
The influence of allowances on financial capacity
The allowances and extra costs of internationals operate like communicating vessels. On the one hand, they receive a higher income due to the allowances, but on the other hand, they also face higher expenses.
Case law presents a varied picture. The starting point seems to be that allowances for staying abroad are always added to the income of the maintenance payer, unless they concern a hardship allowance (hazard payment). On the cost side, the additional expenses of internationals are not always taken into account. It remains challenging to properly substantiate these extra costs. Courts are not easily persuaded to factor these costs in.
Bonuses
Allowances are mainly paid to internationals who work for international organisations such as the ICC, OPCW and ESTEC. Maintenance payers who work for international companies such as Shell are, in addition to allowances, often also entitled to a bonus. The legal practice in this respect is likewise varied, although the prevailing trend still appears to be to base calculations on the average bonus received over the past three years. It is the responsibility of the maintenance payer to demonstrate that receiving such bonuses in the future is no longer to be expected.
Indexation and exchange rates
If the maintenance payer lives abroad, his or her income must be converted from the foreign currency into euros. In addition, the standard of living in the country where the foreign maintenance payer resides often differs from that in the Netherlands. There are several ways to take this into account. One approach is to calculate using higher expenses than those included in the “Maintenance Standards”, the guidelines commonly used to determine maintenance. Another option is to adjust the income of the maintenance payer using an indexation figure. In practice, various indices are used for this purpose.
In summary
Determining how much maintenance an international is able to pay is not always straightforward. It requires a tailored approach.
Information & advice
If you need assistance calculating maintenance or you would like to discuss your options as an international facing divorce, please do not hesitate to contact us. Our experts in expat family law are here to support you.
