Post-Separation Contributions in Family Law Property Settlements

Are post-separation contributions included in the asset pool in family law property cases?

 

The short answer is Yes, post-separation contributions are a monetary contribution type included in the asset pool to be assessed in a property settlement for the division of property. The Full Court of the Family Court describes post-separation contributions as an ‘extremely relevant consideration’ in the context of the case.[1]

This means that if one party in a separation substantially improves their asset position after separation, but before they settle their property settlement, they may have to share their post-separation wealth with their former partner.

If you feel you are in this situation and would like advice from an experienced property dispute lawyer in Melbourne to get the facts for your individual circumstances, and to plan for the future.

Post-separation contributions in a case include financials, such as employment bonuses or redundancy payments and non-financial contributions such as an improvement on the value of an asset, or parenting and homemaker contributions. The period of post-separation contributions is the date of separation up until the date of trial, if a settlement is not reached before.

This means that the time period between the date of separation and trial becomes a relevant factor in the context of post-separation contributions and there should not be a period of delay if possible.

Contributions pursuant to section 79(4) of the Family Law Act 1975 (the Act) form step 2 in the four step approach by the Family Court of dividing the asset pool between parties. The four step approach is:

  1. work out the legal and equitable interests of the parties in the existing property.
  2. what did each of the parties contribute to the relationship pursuant to section 79(4) of the Act;
  3. what are the parties future needs (if any) pursuant to section 75(2) of the Act; and
  4. is the outcome just and equitable pursuant to section 79(2) of the Act.

It is a common misconception that to determine what each of the parties contributed to the relationship, the Court needs to only determine:

  1. what assets and liabilities each came into the relationship with; and
  2. what money or homemaker duties each party provided during the relationship.

The Court also needs to know what contributions have been made by either or both parties after the parties have separated. The Court stated in a 2005 case that ‘it would generally be necessary for the Court to acquaint itself with changes in the composition and value of the property pool, so that post-separation contributions can be assessed’.[2]

Furthermore, in a recent full court decision, the Court found that in assessing contributions, it is obliged to consider parties’ contributions over ‘the entire relationship between the parties arising out of contributions before, during and after the formal tie of marriage’.[3] In that case the post separation period was 11 years, nearly third of the term of the entire marriage of 34 years. The court went on to say that ‘the parties’ respective contributions during the 11 year period between separation and trial were an extremely relevant consideration’.[4]

To allow for post-separation contributions to be assessed, a party needs to produce evidence on the composition of the asset pool at the time of separation and at the time of trial. For example, equity in the matrimonial home at the time of separation and at the time of trial. For parties wanting to substantiate their post-separation financial contributions that may be in dispute, evidence of bank statements will be required. For parenting and homemaker contributions post-separation, testimony evidence through affidavit of the role, responsibilities and obligations of those contributions will be sufficient.

If you require advice about your property settlement from an accredited Melbourne family lawyer, please contact Rowan Skinner & Associates Lawyers.

 

[1] Maine and Maine [2016] FamCAFC 270 at [38].

[2] Woodland and Todd (2005) FLC 93-217 at [18].

[3] Maine and Maine [2016] FamCAFC 270 at [21], quoting Kowalski v Kowalski (1993) FLC 92-342

[4] Maine and Maine [2016] FamCAFC 270 at [38].