Relationships

Relationship Property Act - Power to deviate from an equal sharing

A recent Sunday Star Times newspaper article suggested that wives who give up careers to raise children or support their husband's careers are suing their former partners for thousand of dollars. It referred to "breadwinners" being "forced to compensate their ex-partners for their poorer financial status and living standards caused by their role in the relationship".

Although this statement reflects the Court's 'new' power to deviate from an equal sharing of relationship property assets (formerly called matrimonial property), the extent to which the Court has awarded compensation for disadvantaged spouses, when compared to the considerable number of cases that are before the Family Court each year, is relatively small. The article states that the newspaper had learnt of "eight court settlements to women, worth between $30,000 and $50,000 on top of the 50-50 split of property and child maintenance between the couples." The reality is, however, that the awards have been relatively modest when compared to the total relationship property pool available for division between the parties.

In order to qualify for an adjustment, there are two hurdles that a claimant must satisfy. Namely they must show that:

The income and living standards of their partner are "significantly higher"; and
This disparity is due to/caused by the effects of the divisions of functions within the relationship.
Once this threshold has been met, the Court has a discretion as to whether to make a compensation award. In deciding whether an award is appropriate the Court will have regard to the following factors:

• The likely earning capacity of both partners;
• The responsibility for care of minor or dependent children of the relationship;
• Any other relevant circumstances.

Prior to its introduction, this provision was one of the most controversial aspects of the Act. One of the primary reasons behind it was that an equal re-allocation of existing assets at the time of separation often failed to produce a real sense of equality between separated couples. Traditionally, women have filled the role as the supportive spouse and devoted parent, and often have continued this role for the course of the relationship while the husband remained in full time employment. As a result, more often than not, women (particularly those with children) suffered a significant decline in their living standards after a relationship broke down.

It is incorrect to suggest that awards such as those mentioned in the article are both generous and common. The reality is that the threshold is difficult to meet and once met, the Court has a discretion whether to make any award at all. It is important to remember that the adjustment provisions were motivated by a desire to minimise financial inequalities after separation.

We may see an increasing number of men who are putting their careers on hold to be the stay at home parent to support their wives' careers. The legislation will operate in their favour and likewise allow them to request a fairer allocation. However, the real interest will be in seeing exactly what amounts will be awarded in future cases.

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Last updated: March 2004

This article is intended to be brief in nature and should be used for information only. It should not be relied on as legal advice.