How does a Court assess financial and non-financial contributions?

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In general, assessing the parties’ contributions to the asset pool of the marriage or de-facto relationship is the second step in determining a split of the assets of the relationship (or a property settlement) through section 79 of the Family Law Act 1975 (Cth) or section 90SM of the Family Law Act 1975 (Cth). This follows the identification of the asset pool itself, which is the first step.

Assessing the degree of each parties’ contributions affects the split of the property pool. Greater contributions by a party may mean a higher entitlement for that party, subject to no further percentage shifts in the remaining steps of the four-step property settlement process.

There are a number of different types of contributions that the Court will take into account under section 79 of the Family Law Act 1975 (Cth) or section 90SM of the Family Law Act 1975 (Cth).

The types of contributions include:

Financial contributions

These are contributions of a financial nature of a party to the relationship, or on behalf of a party to the relationship, or a child of the relationship, to the “acquisition, conservation or improvement of any property of the parties” to the relationship.

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

Non-financial contributions

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

These can include home improvement or renovations done by a party in order to 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) in the capacity of homemaker or parent.

These include parenting duties, cleaning duties and general house maintenance duties. The Courts have consistently taken the view that these contributions have equal weight as financial and non-financial contributions.

The Court will also consider the contributions made at different stages in the relationship. For example, in a short relationship, the contributions that were made by a party at the beginning of a relationship bear greater weight than they would in a long relationship. The weight that attaches to initial contributions is known to erode with the effluxion of time. Thus, a party that contributes, at the start of a short relationship, the majority of the assets, has grounds to leave the relationship with most of those assets; but not so if the relationship has endured past the 5 to 7 year mark.

Specific types of contributions may also be relevant to certain assets. For example, physical care provided to an injured partner may be a relevant contribution in determining whether the other partner should receive any part of a personal injury compensation payment received by the injured partner.

A gift by third parties, to a party to the relationship, on behalf of the relationship may also sometimes be a classified as a contribution. Common examples of such gifts include monetary gifts, assistance with home purchases or furniture from parents to the parties of the relationship.

Specific legal advice tailored to your circumstances is desirable  to determine what weight attaches to the contributions you made to the relationship.

There are generally two other steps for the Court to consider once contributions have been ascertained.