What are post-separation contributions?
As previously discussed, contributions can be both financial and non-financial in nature. Contributions made by each party to the relationship will be assessed from the time prior to moving in together (cohabitation) and until the dispute is formally resolved or finalised (either by Court Order or a Binding Financial Agreement). This means contributions to a relationship do not stop being relevant once a couple separates.
When we talk about ‘post-separation contributions,’ it refers to the contributions made by a party to the relationship from the date of separation until the matter is finalised.
Timing is very important when assessing the value of a contribution made to the relationship after a separation. For example, if a property dispute is resolved efficiently after a separation, the matter of post separation contributions is unlikely to be an issue. However, if, for parties are unable to resolve their differences post-separation, and a significant amount of time passes, contributions made during that time can become an issue.
The type of asset is also an important consideration, and the way in which the asset was purchased and/or obtained. For example, if a property was purchased by one party after the separation, it would be considered part of the asset pool in the split, unless they obtained the property independently, using funds that were not part of the joint asset pool. For example, if the property was purchased using a joint savings account, it would be considered part of the asset pool, however if the property was purchased as a result of an inheritance one party receives post-separation, it could merely be considered as a financial resource, rather than part of the asset pool and would be treated differently by the Court.
In spite of how the assets are treated by the Court, both parties have an obligation to identify all property in existence at the time of final hearing or final settlement of the matter, and its value at that point in time – regardless of whether it was acquired pre or post-separation.
Where the contribution is not a physical asset, for example, contributing to a mortgage of a jointly owned asset, or where there are children under the age of 18 and the parties continue to care for the children, then the post-separation contributions are treated in the same way as contributions made during the relationship.
To give you a better understanding of the weight given to financial and non-financial contributions made post-separation, and when determining a property settlement, we look at the case of Jacobson & Jacobson (1989) FLC 92-003.
What does the outcome of this matter tell us about contributions post-separation?
In reading through the facts of this case, it tells us that post-separation contributions can range from the use of funds left standing in the account of one party, tax credits or an application of tax losses to the benefit of one party over the other, and the ongoing care of children post-separation, and the acquisition of property.
Irrespective of how remote or insignificant a contribution is post-separation; it will still be considered by the Court, and the Court deems it inappropriate to separate pre-separation and post separation assets.
In this case, the trial judge dealt with the assets accumulated during the course of the relationship separately to the post-separation contributions, so that in determining the share of the pool, the Wife retained 76% and the Husband retained 24%.
However, because all of the assets should have been included in the pool, the division of property was actually 60% to 40% in favour of the Husband (excluding the maintenance component). Therefore, considering the Husband’s post separation contributions.
In summary, when looking at contributions made post-separation, it is important to consider the following:
- What was the duration of the marriage and the separation period?
- Are there children of the relationship, and who is primarily responsible for their care?
- How were the post-separation assets obtained? i.e., were they obtained from pre-separation assets or resources?
- Did the other party make an indirect contribution resulting in the asset being acquired?
Need assistance on a family law matter regarding contributions?
If you would like legal advice regarding contributions in a relationship, whether it’s initial contributions, contributions made during a relationship or contributions after the relationship has ended, our Sydney family lawyers are here to help. Give us call on 02 9262 4003 for a confidential discussion or submit an online enquiry.
The content of this article is intended as a general guide to the subject matter. For specific legal advice about your individual circumstances, please contact our experienced lawyers.
Pamela is a member of Ivy Law Group’s prominent Family Law division. She specialises in parenting, property and divorce matters.
Pamela is a strong advocate for her clients and gains great satisfaction in helping them navigate through a difficult time in their lives and achieving an outcome that resolves their dispute to the highest standard.