Compensatory Allowance (Prestation Compensatoire) in France

The compensatory allowance is a sum paid by one spouse to the other to offset the drop in living standard caused by the divorce. The judge assesses it according to the length of the marriage, income, age and health. It is paid as capital or, more rarely, as an annuity.

Its aim is to ensure a degree of economic fairness between the ex-spouses, taking into account sacrifices or lifestyle choices made during the marriage, such as giving up a professional career to look after the children, or favoring the career of the other spouse.

1. Award conditions

For a compensatory allowance to be awarded, two main conditions must be met:

• • • Existence of an economic disparity: The judge must find that there is a significant difference between the spouses’ respective living conditions due to the breakdown of the marriage.
    • Consideration of legal criteria: The amount and terms of the award are determined on the basis of the creditor’s needs and the debtor’s resources, as well as other criteria detailed in article 271 of the Civil Code, including :
      • Duration of marriage,
      • The age and state of health of the spouses,
      • Their qualifications and professional situation,
      • The consequences of professional choices made during the marriage,
      • Estimated or foreseeable assets after liquidation of the matrimonial property regime,
      • Existing and foreseeable rights, in particular with regard to retirement.

2. Forms of compensatory allowance

Compensatory allowance generally takes the form of a lump-sum capital sum, but may also be paid in the form of a life annuity in exceptional cases. Here are the various possible forms:

2.1. Capital

• • • Payment of a sum of money: This is the most common method.
    • Allocation of property: Ownership, usufruct or use/inhabitation.
    • Instalments: The capital can be paid in periodic instalments over a maximum period of 8 years, unless the judge decides otherwise.

2.2. Life annuity

This form is exceptional and reserved for cases where the creditor is unable to support himself due to his age or state of health.

3. Review procedures and consequences after the debtor’s death

• • • Revision: Compensatory allowance in the form of a lump sum is definitive, but its payment terms may be revised in the event of a significant change in the debtor’s situation. Life annuities, on the other hand, may be revised or cancelled in the event of a change in the parties’ resources or needs.

• • • Death of the debtor: the compensatory allowance becomes an inheritance debt and is deducted from the debtor’s estate, unless otherwise stipulated.

4. Differences from spousal support

Compensatory allowance differs from temporary spousal support in several respects:

• • • Lump-sum nature: In principle, compensatory allowance is definitive and lump-sum, whereas the temporary spousal support is revisable according to the needs of the creditor and the resources of the debtor.
    • Purpose: Compensatory allowance is intended to offset the economic disparities created by the divorce, whereas temporary spousal support meets an immediate need for maintenance and support for the duration of the divorce proceeding.

In Summary

Compensatory allowance is a legal mechanism designed to re-establish economic equity between former spouses following a divorce.

Depending on the circumstances, it may take the form of a lump sum or, more rarely, a life annuity, and is determined on the basis of criteria detailed in the Civil Code.

Although the scheme provides compensation, it also has a spousal support component, particularly when paid in the form of an annuity.

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