In a property settlement, the first step of the four-step process in determining a split of the assets of a marriage or de-facto

In a property settlement, the first step of the four-step process in determining a split of the assets of a marriage or de-facto relationship is identification of the asset pool. The next step is assessment of the contributions of the parties to the asset pool, which is achieved by applying sections 79 or 90SM of the Family Law Act 1975 (Cth) (“the Act”).

The percentage split of the property pool is affected by assessment of the extent of each parties’ contributions. Greater contributions by a party may increase that party’s entitlement.

The Court takes into account different types of contributions.

Financial contributions

These are contributions by or on behalf of a party to the relationship, or a child of the relationship, to the acquisition, conservation or improvement of the parties’ property.

They include significant assets or superannuation brought into the relationship at the start of the relationship, or the contributions of salary, superannuation or other earnings generated during the relationship.

Non-financial contributions

These are contributions by or on behalf of a party to the relationship, or a child of the relationship, which may not have a “price-tag”, to the acquisition, conservation or improvement of the parties’ property.

They include home improvement or renovations undertaken by a party which improve the value of the matrimonial or investment home.

Homemaker or parenting contributions

These are contributions by a party to the welfare of the parties to the relationship (including any children) as a homemaker or parent.

They include parenting duties, cleaning duties and general house maintenance duties. The weight given to these contributions is on par with financial and non-financial contributions.

Weight attached to contributions

The Court takes into account when in a relationship contributions were made. Progressively less weight attaches to initial contributions over time. Contributions made by a party at the beginning of a relationship bear greater weight in a short relationship than they do in a long relationship. A party who contributes the majority of the asset at the start of a short relationships has grounds to leave the relationship with most of those assets, which is a less likely outcome in a longer relationship.

Specific types of contributions

Specific types of contributions may also be relevant to certain assets. For example, one partner caring for an injured partner may be a relevant contribution in determining the entitlement (if any) of the uninjured partner to the injured partner’s personal injury compensation payment.

A gift by third parties to a party to the relationship may also be a classified as a contribution. These contributions (often from parents) include monetary gifts, assistance with home purchases, or a gift of household furnishings.

What now?

Above is a brief overview of contributions-related factors which may be considered by a court in property proceedings. This is a complex area of law and it is important to get advice from an experienced family lawyer. Contact us for advice specific to your circumstances or if you have any questions about contributions in family law property settlements.