Assessing contributions is an important step in determining how to arrive at a just and equitable property settlement between separated couples.
What contributions does the Court consider?
Section 79 and 90SM of the Family Law Act 1975 requires an assessment of the following contributions:
Financial contributions towards the acquisition, conservation, and improvement of property. These contributions may include financial contributions received by way of income, inheritances, redundancy payments, compensation awards, and windfalls such as lottery wins;
Non-financial contributions made towards the acquisition, conservation, and improvement of property. These contributions may include a party conducting renovations toward real property at no cost; and
Contributions made towards the welfare of the family through homemaking and parenting contributions.
When does the Court assess contributions?
The Court assesses contributions made at the commencement of the relationship (in particular, whether one or both parties had significant assets at the commencement of the relationship), during the relationship, and post-separation (if relevant).
What weight is given to contributions made by either party?
The weighing of contributions is not a mathematical exercise. Weighing of contributions has been described by the Court as being a holistic assessment of the myriad of contributions that are made by parties throughout the course of their relationship.
Each case is different, and all contributions made by parties are unique to their own circumstances. The Court has the discretion to make an adjustment in favour of either party after assessing those contributions.
The size of the adjustment given to a party based on their contributions will depend on a range of factors including the contribution that was made relative to the asset pool that exists (in the case of a financial contribution) or the passage of time since that contribution was made, and importantly, weighing the relevant contribution against contributions made by the other party to the relationship or marriage.
Do some contributions carry more weight than others?
Historically, the Court placed more weight upon financial contributions (by way of income) over contributions made as homemaker and parent, in cases where it was said that the primary income earner exercised “special skill” in order to make those financial contributions. In traditional relationships at that time, this would advantage the primary breadwinner (often the Husband) and disadvantage the party who had made contributions within the home that prevented them from earning an income (often the Wife). The Court has since disapproved of that approach and “special skills” are no longer recognised as being a particular category of financial contribution.
For specialist advice regarding your property settlement, contact Robinson + McGuinness to arrange an appointment on (02) 6225 7040, by email on info@rmfamilylaw.com.au or get started now online with one of our experienced lawyers. The sooner you seek advice the better – so you can make informed decisions about your options.
Author: Margot McCabe