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Financial Contributions

When a marriage or relationship breaks down, there comes a point in time where the parties must deal with dividing and separating their assets and severing financial ties. When working out a property settlement, the court considers the contributions, both financial and non-financial, made by the parties to the marriage or relationship.

Financial contributions are amounts of money contributed to the acquisition, maintenance or improvement of assets at the beginning, throughout and after the relationship. Contributions can be made directly (such as a lump sum payment against the mortgage) or indirectly (such as contribution of your weekly earnings to household expenses). Typically, direct contributions to the assets are a matter of history and are in most cases readily calculable. Indirect financial contributions made to the acquisition of property can pose a difficulty when ascertaining the weight that should be placed in their favour.

An indirect contribution typically involved in a family law matter is where one party’s income is paid directly towards the acquisition of property (repaying mortgage) and the income of the other party has been used for daily expenses, thus relieving the mortgage-paying spouse of responsibility for those daily expenses and so making an indirect contribution to the acquisition of property.

As outlined in section 79(4)(a) of the Family Law Act 1975, the court must assess the direct and indirect contributions to the acquisition, conservation or improvement of the property. Financial contributions also include inheritances or gifts, compensation payments, pensions or the use of other financial resources towards the acquisition and maintenance of the assets. The court must consider the contributions made by the parties which they currently hold and the property which they have disposed of prior to separation or prior to the proceedings commencing.

The court will consider what each party brought to the relationship as well as the contributions made during the relationship and (in some cases) after separation. One of the things to keep in mind when assessing financial contributions to a relationship, particularly lump sum contributions, is that recent contributions to the relationship are generally weighted more favorably than older contributions, that is to say older contributions become more blended between the parties to the relationship as time goes by.

Financial contributions:

  • savings;
  • wages;
  • termination payments;
  • gambling winnings;
  • proceeds from investments; or
  • any other matter in which finances were derived during the relationship.

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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