Financial and Non-Financial Contributions

Often married or de-facto couples separate but do not effect a property settlement until many years later. This can make dividing assets more complicated. The Family Court of Australia effectively adopts a 5-step approach in regard to dividing assets by way of property settlements. The court will only consider making orders in relation to a property settlement if it is fair and reasonable to do so.

Other than identifying and valuing the assets and liabilities of the parties, the court will also look at the contribution made by the parties. In cases where there has been a long relationship, the determination will be that the parties have contributed equally. The contribution of the parties may be viewed as something other than equal in circumstances where:-
• the relationship is short and there are no children;
• a partner has brought considerably more assets to the relationship or one of the parties contributed substantially via an inheritance, gift, or personal injury settlement; or
• a partner acted in a deliberate or reckless manner resulting in a loss to the parties.

Financial Contributions
Financial contributions are amounts of money contributed to the acquisition, maintenance, or improvement of assets at the beginning, throughout and after the relationship. Contributions can be made directly or indirectly. Typically, direct contributions to the assets are a matter of history and are in most cases readily calculable. Indirect financial contributions made to the acquisition of property can pose a difficulty when ascertaining the weight that should be placed in their favour.

Non-Financial Contributions
It is not just financial contributions that are taken into consideration in a property settlement between parties in a former marriage or de facto relationship. In a property settlement the court will also consider the non-financial contributions of a party to the marriage or de facto relationship.
Non-financial contributions are non-monetary inputs of a spouse or a de facto partner to the relationship’s asset pool. For example, the value placed on the responsibility of caring for the children which is also recognised separately as part of his or her contributions to a marriage that has come to an end. This type of contribution is just one of the factors that the family court will take into account in deciding a fair and equitable property settlement.

It is recommended that you consult a lawyer before you separate so that you know your options early on and that you do not do anything that may jeopardise your family law proceedings in the future. Straits Lawyers are now offering online services in both English and Chinese.
Simply purchase our online services via this link: https://straits-lawyers.square.site/product/binding-financial-agreement-consultation-bfa-/5?cs=true

Alternatively, you can email us at info@straitslawyers.com or call at 08 8410 9069 to find out more.

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Please note that this article does not constitute legal advice and Straits Lawyers will not be legally responsible for any actions you take based on this article.