Am I due spousal maintenance because I stopped work to have the kids?

Saturday, 3 March, 2018

I would like to know if loss of income due to child rearing is factored into the Section 75(2)?

I took a total of 2 years off after the birth of my children (only paid for 64 weeks out of the 104 weeks) and lost a significant amount of superannuation during this time. I am trying to determine if I am able to use this loss of income/being the primary carer for my children, as a way to bring my contributions up to the similar level as my ex-husband contributed from an inheritance into the relationship?

AussieMum

*It is imperative that you understand this answer is not to be considered as legal or financial advice. You are advised to seek an opinion from a qualified family lawyer.

Dear AussieMum,

Section 75(2) relates to whether or not a person is entitled to spousal maintenance.

Spousal maintenance is only awarded if one person is unable to fully sustain their normal living expenses, and their ex-spouse's financial circumstances allow them to assist them financially.

Some reasons a dependent person might need assistance could be:

age

mental or physical incapacity to find work

they need support to retrain in order to return to workforce after assuming homemaker duties during marriage

because they must stay home to care for children or other family members.

In Australia, the Court would generally look to achieve a 'clean break' settlement in which no spousal maintenance is due.

In order to achieve a clean break, the person who would have claimed spousal maintenance may receive a greater share of the assets than they would have otherwise and this is in lieu of maintenance.

They are expected to use this additional share to grow their net wealth and provide for themselves.

It is usually in cases where there is a significant disparity in earning capacity or the assets of the family are too limited to allow an equitable split, that spousal maintenance may be awarded.

Where one party may have given up a career to assume the majority of the domestic duties and support their spouse in their career, spousal maintenance may be awarded for a defined period of time to allow the dependent spouse a retraining period to improve their skill set and increase their earning capacity, though often, this is reflected as an additional lump sum in the overall property split.

Indirect/non-financial contributions

The concept of an indirect/non-financial financial contribution is a contribution, or an action, made by one spouse whereby that action or contribution allows the other spouse to directly financially contribute to the acquisition of assets.

For example, in this instance where a wife gives up a working career to raise the children of the relationship thus enabling, or freeing-up, the husband to contribute to the build-up of assets, the wife can be seen to have indirectly contributed to the property pool.

The same would apply if the roles were reversed.

So, your time away from work would be considered as a 'non-financial contribution' made by yourself, which added overall value to the family.

This is particularly relevant if:

you staying at home allowed your husband to focus on earning

when you did go back to work your earnings were lower because of the time off

you have continuted to take care of the lionshare of homemaker and child rearing duties,and/or,

your capacity to work and earn whilst also raising children has been hindered.

Unfortunately, there's no specific formula for calculating the exact value of non-financial contributions of the homemaker and primary care giver but the courts do give weight to this type of contribution and this would be taken into account in the overall property split.

There are other factors that would also be taken into consideration in determining a property split such as how long you have been in the relationship, what each of you brought to the relationship in the first instance, what each of you have contributed financially and non-financially during the relationship and after separation, what your respective earning capacities and future living expenses will be (taking into account the ongoing care of the children), what resources (such as superannuation) will be available to you and whether or not either of you have an extraordinary skill that has contributed significantly to your pool of assets.

If there is a disparity in your Superannuation balances, super splitting may be a viable option.

For what it's worth, my personal experience leads me to advise you to aim for a clean break property settlement if possible, where you are not reliant upon the integrity of the higher earning spouse to honour the orders to pay ongoing spousal maintenance.

A lump sum split of the assets, if possible, means that aside from the child support requirement, you are no longer bound financially to your former partner.

You are not faced with the potential hassle and costs of having to go to court to enforce orders in the event of short payment of spousal maintenance or worse still, no payment at all.

A general grapevine survey of people I know suggests that becoming financially independent of your former partner from the outset will allow you to move towards a happier new life faster than if you are dependent on spousal maintenance.

Published by, Christine Weston
Founding Director and Creator of Divorce Resource

The information in this article is general in nature and should not be considered as professional advice. You should seek the advice of a registered professional who will be able to appropriately assess your specific circumstances before offering their expert opinion.