Posts for February 2017

Family Law Property Settlements and Child Support - earnings after separation

Friday, February 10, 2017 12:54pm

In Family Law property settlements, the courts will take into account all contributions made by the parties, even after the separation occurs.

The case of Trask & Westlake involved a couple who had been married for 3 years.  During their marriage, the husband had worked full time and earned significant income, and the wife had remained at home as the primary care giver to the their four children. After their separation, both parties continued in these roles.

The Full Court of the Family Court of Australia decided that both parties contributed equally during the marriage; the husband through his talent, dedication and hard working in earning a considerable income, and the wife by being a full time homemaker and parent. Although it was easy to calculate the husband's financial contribution to the marriage, it was more difficult to determine the wife's contribution, as no clear dollar value could be assigned. However, the Court held that homemaker and parenting contributions are not any less important than financial contributions and, in this case, decided that both parties had contributed equally to the marriage. As a result, the Court ordered that $9 million of income received by the husband after separation was to be included in the property pool for division between the parties.

If you have separated from your spouse or domestic partner, you may need to consider finalising a property settlement as soon as possible, to avoid this income forming part of the asset pool, particularly if you have plans to develop your earning capacity.

On the other hand, for the purposes of assessing child support payments, it is possible that some or all of your extra earnings could be excluded from the assessment of your payments if you have recently separated and are earning extra income to support your changed circumstances. You can apply to have the extra earnings excluded from your child support assessment without having to go through a formal process. An application of this type may be made if you did not earn that level of income before separation, if the income would not have been earned in your the ordinary course of your existing employment, and as long as separation occurred less than three years ago (as the income can only be excluded for three years after separation). If the application is successful, the excluded amount can be no more than 30% of your adjusted taxable income.

Property settlement and child support issues can be complicated. There may be property which you might not realise is an asset. There may be factors which affect the way in which the property will be split. Certain property may be treated in a special way by the law. It is important to obtain legal advice about your specific circumstances. At Rossi Legal, our family law specialists offer a first no-obligation interview, where you can tell us your circumstances and we can give you advice on the best way to approach your property and child support issues.

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