When a couple separates, the assets that they have accumulated during the relationship are divided between them. This is known as a property settlement. The Family Law Act 1975 (Cth) sets out the principles that the court must follow when dividing property.
One of the factors that the court must consider when dividing property is the contributions that each party has made to the relationship. This includes contributions that were made both during the relationship and after separation.
What are post separation contributions?
Post separation contributions are contributions that are made by one or both parties to the relationship after the parties have separated. These contributions can be financial or non-financial.
Examples of financial post separation contributions include:
- Paying down the mortgage on the family home.
- Making additional contributions to superannuation.
- Investing in the family business.
- Making a lump sum payment to the other party.
Examples of non-financial post separation contributions include:
- Caring for the children.
- Managing the household.
- Running the family business.
- Providing emotional support to the other party.
The court will assess post separation contributions in the same way that it assesses contributions that were made during the relationship. The court will decide the weight of the contribution on a case by case basis. Some of the things that the Court will consider when assessing post separation contributions include:
- The nature of the contribution.
- The value of the contribution.
- The timing of the contribution.
- The needs of the parties.
- The ability of the parties to support themselves.
Assets acquired by either party post separation, and assets disposed of by a party, can also be factored into the property settlement. Therefore, you should always speak to your family lawyer before making a significant purchase or disposing of a significant asset in a property settlement. Until your property settlement is formalised and complete, all assets and debts accumulated post separation are available for distribution. The Court will have regard for the fact that a party has accumulated assets or debts post separation.
The Court will have the deciding factor as to how much weight is applied to a post separation contribution. Depending on the nature of the contribution, it may have little or a lot of weight in the property settlement. The Court will also consider the future needs of each party prior to making an assessment as to the weight of a post separation contribution.
Post separation contributions can be an important factor in determining the outcome of a property settlement. If one party has made significant post separation contributions and the other party has made minimal post separation contributions (both financial and non-financial), this could entitle them to a larger percentage of the property pool.
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