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A compensation payment received during the course of a relationship will be taken into account by a court in determining a property settlement between the parties. However, a right to pursue a compensation claim, or claim which has not yet been finalised, will not be included. This is because such claim cannot be given a monetary value and it is difficult to determine the prospects of success of such application. It is also possible that the party who is pursuing a compensation claim may later decide to discontinue their application.

If a compensation payment is received during the course of the relationship, the court will consider this as a financial contribution made by the party to whom the compensation was awarded. This does not mean that a party who received a compensation payment during a relationship will receive a refund of these funds in the property settlement. Indeed, contributions, both financial, non-financial and as homemaker and parent, are all weighed against one another by a court in order to determine a fair outcome between the parties. Thus, the contribution made by one party by way of compensation payment, will be assessed as against contributions made by the other party such as parenting or homemaker duties.

The weight given to be attributed to a compensation payment will also vary depending on factors such as when the compensation payment was received and how the compensation payment was used by the parties. In addition, the party who did not receive the compensation payment may also have indirectly contributed to the award, particularly if they can demonstrate that they helped the spouse with his or her day-to-day care, took the other spouse to medical appointments or helped prepare court material for their compensation claim.

For advice or representation in any legal matter, please contact Armstrong Legal.

Michelle Makela

This article was written by Michelle Makela

Michelle has over 15 years experience in the legal industry, working across commercial litigation, criminal law, family law and estate planning.  Michelle has been involved in all practice areas of the firm and in her personal practice has had experience in litigation at all levels (State and Federal Industrial Tribunals, the Supreme Court, Court of Appeal, the Federal Court, Federal...

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