Are all contributions during a relationship treated the same way?
Once of the most common characteristics that we experience in Family Law Property Matters is that parties do not understand how their various contributions to the relationship are assessed. More often than not (although we are finding that this is becoming less and less the case) relationships are divided in a "traditional" way. By that, I mean that it is normal that one party is the "breadwinner" and to the other person the majority of the domestic duties fall.
One of the most fundamental misunderstandings that people have is that the contributions that are financial (that is, those made by the main breadwinner) should be given more weight or viewed differently to those made by the homemaker and parent. That is, in general terms, not the way that the Court assesses contributions. It would be unjust and in equitable if over, for example, a 20 year relationship, one person was a stay at home parent, and the other person earned the majority of the income, and, as a consequence of the way in which the parties arranged their financial and domestic affairs, one person received an advantage as a consequence of them going out and working. Therefore, the Court has always stayed away from assessing contributions that are financial in nature as being "more important" contributions than those made by a homemaker and parent.
The reason for this is quite simple. The fact that a person is a breadwinner is as a consequence of the fact that the other party stays at home (either party time or full time) and looks after the children and the home, which enables the breadwinner to go out and earn. Therefore, the contributions made as a homemaker and parent must be, and have been for some time, viewed the same as those as the main breadwinner. It would, as indicated, be quite unjust if a situation were to arise that a decision (most likely jointly) was made for one party to stay home and look after the children, and have caused a spouse to be disadvantaged in terms of what percentage of the property pool they receive, as a consequence merely of the agreement that the parties had come as to how they would arrange their affairs.
There has been, as a consequence of a recent case Ritter & Ritter a potential shift in the way that the Court views these contributions (if this case is followed in the future, as, at the moment it is a stand alone case). In that case, the Court assessed one party’s contributions as being superior to the other party in circumstances where they had worked full time and also done the majority of the homemaker and parent contributions. I have always found it is very difficult to determine who has performed the bulk of, in particular, the homemaker contributions. It is very often a case of "word against word", as very rarely is there again any objective evidence that indicates that one person has done more of the housework that the other. In terms of the parenting contributions, that is quite often more objective to assess, however, as indicated above, one person should be disadvantaged as a consequence of the fact that the parties have arranged their affairs such that the one person works in paid employment and other person’s role in the family is to be as homemaker and parent.
In short, all contributions made, whether financial, non financial, or as homemaker or parent, are valuable. However, if there develops a line of precedent whereby if a person who works and does the majority of the homemaker and parent duties, and receives an additional share of the asset pool as a consequence, couples may well have to assess the way in which the roles in the family are divided, and whether they would be disadvantaged at separation if they continue.
For more advice on how various contributions to a relationship are assessed in family law property settlements, please contact:
Karina Ralston, Principal
Phone: 02 9895 9242
Plain English Guide to Property Settlement under the Family Law Act
Plain English Guide to Superannuation and Property Settlement