Post-separation contributions refer to monetary inputs that are considered when assessing assets during family law property settlements.. The Full Court of the Family Court has underscored the significance of post-separation contributions, labeling them as an “extremely relevant consideration” (Maine and Maine [2016] FamCAFC 270 at [38]).
If one party significantly augments their assets post-separation but prior to finalising the property settlement, they may be obligated to share this post-separation wealth with their former partner.
These contributions may include both financial elements (such as employment bonuses or redundancy payments) and non-financial aspects (such as enhancements to asset value), as well as contributions related to parenting and homemaking. Post-separation contributions can occur from the date of separation until either the settlement date or the trial date if no agreement is reached, with the aim of minimizing the duration between separation and trial.
Contributions according to section 79(4) of the Family Law Act 1975 constitute the second step in the four-step approach outlined by the Federal Circuit and Family Court of Australia (FCFCOA) for dividing the asset pool between parties. This approach involves:
- Determining the legal and equitable interests of the parties in the existing property.
- Assessing the contributions of each party to the relationship as per section 79(4) of the Act.
- Evaluating the future needs of the parties (if any) pursuant to section 75(2) of the Act.
- Ensuring a just and equitable outcome in line with section 79(2) of the Act.
Contrary to common belief, determining the contributions of each party to the relationship involves not only assessing the assets and liabilities brought into the relationship and the financial or homemaking contributions during the relationship, but also scrutinising the contributions made after separation. As stated in a 2005 case, “it would generally be necessary for the Court to acquaint itself with changes in the composition and value of the property pool, so that post-separation contributions can be assessed” (Woodland and Todd (2005) FLC 93-217 at [18]).
In a recent Full Court decision, it was affirmed that in evaluating contributions, the Court is obligated to consider contributions over “the entire relationship between the parties arising out of contributions before, during and after the formal tie of marriage” (Maine and Maine [2016] FamCAFC 270 at [21], quoting Kowalski v Kowalski (1993) FLC 92-342). In this case, which involved an 11-year post-separation period out of a 34-year marriage, the Court highlighted the relevance of contributions during this period (Maine and Maine [2016] FamCAFC 270 at [38]).
To enable the FCFCOA to assess post-separation contributions, parties must provide evidence regarding the composition of the asset pool at both the time of separation and the time of trial (e.g., equity in the matrimonial home at separation and at trial). In cases where the post-separation financial contributions are disputed, bank statements will be necessary. Testimony evidence via affidavit regarding the post-separation role, responsibilities, and obligations of a party will suffice for parenting and homemaking contributions.
