Family Law Smart Start Guide
Navigating a relationship breakdown is difficult and making sure you take all the right steps at the right time can seem impossible. Our Mission is to secure the best future for every client and their family. We do this by:
- Providing clear and realistic advice.
- Providing direct access to a highly capable team.
- Delivering an exceptional and personalised service.
- Focusing on practical resolutions.
We want you to make the very best start in this process; to get ahead of important decisions early on, in the right frame of mind and armed with expert advice.
After years of working with people experiencing separation, we know how important it is to start the separation process in a strong, informed and clear minded
place – we call this making a Smart Start.
To make sure you make a Smart Start, we have developed our Smart Start Appointment – the clearest, fastest and smartest start to your separation journey.
This Smart Start Guide contains information about our Smart Start Appointment and other useful Family Law information to help you through the early stages of your separation.
It has been a pleasure to compile this Guide in the hope that we can help you to understand more about the legal process to take control of your trajectory
Best wishes as you make your fresh start.
By Anna Roberts,
Founding Partner of Delaney Roberts Family Lawyers
Specialist Family Lawyer/Family Dispute Resolution Practitioner
LLB, GradDipLegPrac, LLM (Applied Law), BCom, GradDip (FDRP)
This Smart Start Guide has been compiled by our Specialist Family Lawyers so that you can:
- Get the most out of your Smart Start Appointment,
- Use the contents of this Guide to support you following your Smart Start Appointment, and
- Learn more about what we can offer if you are thinking of booking a Smart Start Appointment.
Family Violence refers to violence between family members, typically where the perpetrator exercises power and control over another person. Some
of the worst cases of intimate partner and Family Violence do not involve repeated or any acts of physical violence. For this reason, we have chosen to
include the expression Domestic Abuse. In our view, Domestic Abuse more clearly articulates that the relevant conduct is not just violent behaviour,
but abuse that is repeatedly visited by the perpetrator on their victims.
The most common and pervasive forms of Family Violence and Domestic Abuse occur in current or former intimate partner relationships. The statistics clearly support Family Violence and Domestic Abuse as a gendered crime of which males are overwhelmingly the perpetrators on female victims.
Currently in Australia, one (1) woman a week is murdered by her current or former partner and 1 in 4 women has experienced physical or sexual violence by a current or former intimate partner. Family Violence and Domestic Abuse accounts for almost 60% of the women hospitalised for assault and it is a causal factor behind 1 in 5 female suicide attempts.
In our daily work, Delaney Roberts Family Lawyers supports victims and potential victims of Family Violence and Domestic Abuse to protect their safety and to help them to find support wherever available.
To this end, we maintain an up-to-date webpage listing safety, financial and other supports available to assist those living with Family Violence and Domestic Abuse to take the challenging steps towards guarding theirs and their children’s safety.
Smart Start Appointment
To assist you to make a Smart Start, we have developed our Smart Start Appointment: the clearest, fastest and smartest way to start your Family Law separation journey.
A Smart Start Appointment is:
- A one-on-one appointment with a Specialist Family Lawyer who is an expert in dealing with legal separation and has helped many people just like you,
- Where you will get on-the-spot specialist Family Law advice tailored to your circumstances,
- Completely confidential,
- 90-minute duration,
- Once-off Fixed Fee, and
- No obligation.
Our Smart Start Appointment is a unique solution developed after more than a decade of helping people find clarity and direction in relation to the breakdown of an important relationship. We understand that this significant life transition, and its possible consequences, are stressful and the need to make important decisions during this time can be overwhelming.
Our Smart Start Appointment is guaranteed to help you to lose the stress, gain confidence and give you direction as it:
- Gives you access to a one-on-one confidential appointment with a Specialist Family Lawyer,
- Is an affordable and accessible solution offering great value at a reasonable fixed price,
- Gives you on-the-spot legal advice tailored to your situation,
- Allows you to address the issues that are concerning you right now,
- Brings to your attention other issues that you may not have thought about,
- Sets out a list of Next Steps for you to take so you leave the appointment with a plan,
- Informs you about how to proceed with our firm if you wish to, and
- Gives you an understanding of how we charge and the costs likely to arise for you.
Australian Family Law Framework
There are six (6) main areas that are dealt with by Australian laws in relation to relationship breakdown. These are:
- Separation and Divorce,
- Property Division,
- Spousal Maintenance,
- Child Support, and
- Wills and Estate Planning.
Each of these areas and how they may affect you after separation are explained further throughout the remainder of this Guide.
Family and relationship breakdown cases are dealt with under the Family Law Act 1975 (Cth) by a specialist Court – the Federal Circuit and Family
Court of Australia.
Family Law It serves all States (except WA which has its own State Family Court). The Federal Circuit and Family Court of Australia determines matters for
all people (subject to jurisdictional limitations) in relation to:
- Property Division (including Spousal Maintenance),
- Parenting, and
- Child Support.
The Federal Circuit and Family Court of Australia requires people who have separated to resolve their dispute by first attempting Mediation before coming to Court. This is not only to manage Court costs but because Court proceedings are difficult for families and should be avoided unless a last resort. Even after Court proceedings are started, the Court will refer the parties back to attempt further Mediation to try to reach agreement and move out of the Court system.
After separation, there are many issues impacting on both you and your ex-partner that will have to be resolved between you. In many cases, ex-partners are able to reach agreement on all issues without intervention. In other cases, assistance is required to resolve issues but agreement is ultimately reached. In some cases, interventions are not successful and Court proceedings become necessary.
Direct negotiations with your ex-partner
For direct negotiations to result in agreement, you and your ex-partner will need to be on the same page as to an outcome, with one (1) or both of you compromising your positions to reach agreement. One (1) or both of you may have received Family Law advice so you’re aware of what issues need to be addressed, what constitutes a fair outcome, how the process works and the benefits of reaching an early agreement.
It is essential that your agreement is documented in a binding agreement or Court Orders which are carefully prepared by a Family Lawyer. If you rely only on an informal agreement (even if it is in writing and signed by you and your ex-partner) this will not stop your ex-partner from making a further claim in future. If you have reached an agreement with your ex-partner (or think you might), talk to us about how we can quickly and simply document the terms of your agreement, so you are protected in future.
Legal negotiations (where each party has a Family Lawyer)
Legal negotiations often assist parties to move closer to agreement, where direct negotiations are not enough or are not appropriate. There may be a power imbalance between the parties, complex issues that need to be addressed by a Family Lawyer or difficulties communicating.
Usually negotiations are most productive if both you and your expartner each have an independent Lawyer (you can’t use the same one) rather than one (1) of you remaining unrepresented. An unrepresented party may not appreciate the legal nuances of the case or the costs or risks associated with going to Court and, therefore, agreement is difficult to achieve.
Even where you have partially reached agreement with your ex-partner, an experienced Family Lawyer can help you to understand how to progress and complete your agreement and proceed with written negotiations with your ex-partners Lawyers to bring those terms to fruition. Great care needs to be taken when using this approach to ensure you don’t get caught up in endless negotiations where it doesn’t seem that an agreement is likely. This process can be incredibly expensive unless an agreement is reached fairly quickly.
Mediation is a process where a separated couple has a conversation regarding legal issues with a neutral third party (qualified Mediator) acting as a chairperson in order to keep communications flowing in an effective manner. This assists the couple to keep the conversation future-focused to reach an effective agreement about how they will deal with the legal issues arising from the separation. Mediation is a voluntary process (ie. you must consent to participate in the process) and all communications during the process must be kept confidential, leaving you free to negotiate without the fear that what you said will be used in Court against you.
The parties to a Family Law dispute involving Property Division and/ or Parenting, are required to take genuine steps to resolve the dispute between them before starting Court proceedings, except in cases of violence or risk of violence, urgency and other exceptional circumstances. Taking genuine steps to resolve
the dispute includes attempting Mediation. There is a strong incentive for parties to agree to go to Mediation as, where a party refuses to attend, they may be Ordered to pay the other party’s legal costs when Court proceedings start.
Mediation is widely recognised as a great process for separated couples when trying to reach an agreement about what will work best for both of them in terms of Parenting Arrangements, Property Division, Child Support and/or short-term issues that are holding up negotiations. Mediation does not need to be used by itself but can be used to assist and expedite legal negotiations. Even where parties have attempted Mediation before going to Court, the Court will usually refer them to attempt a further Mediation once the Court proceedings are underway, and is frequently Ordered at various stages in Court proceedings in an effort to encourage parties to reach an agreement.
One (1) of the main benefits of Mediation (rather than going to Court) is that you remain in control of the process: you get to speak for yourself in a safe environment where your communications are confidential and where the Mediator acts to help you and your ex-partner to avoid the obstacles that normally affect productive communication between you.
A Mediation session will usually last three (3) to four (4) hours at a cost of between $500 (for a standard Mediator) to $5,000 for a Barrister or retired Judge acting as Mediator.
Collaborative practice is a dispute resolution process that is highly successful in resolving Family Law property and/or parenting disputes. It involves the parties
negotiating but, because both parties make a commitment to the process, the parties are invested in finding a solution, rather than giving up and going to Court.
In the Collaborative process, each party and their Lawyers enter into an agreement (called a Participation Agreement) to work towards an outcome without going to Court. The parties may engage other professional advisors to participate in the process to assist towards reaching a result, such as Accountants, Financial Planners, Psychologists and so on. The parties can also obtain joint reports from experts to assist to resolve factual disputes. The purpose of Collaborative Practice is to reach a negotiated outcome; it is a voluntary and confidential process where no-one can impose an outcome – it must be agreed by the parties.
Neither party can start Court proceedings without first terminating the representation of their existing Lawyer and any other professionals engaged during the process. After working with (and paying) a Family Lawyer and other advisors for some time, most people are highly motivated to avoid having
to start the process all over again with a new team. This requirement of Collaborative Practice means that parties remain committed to the process of resolving their dispute without going to Court.
Some Family Lawyers are trained in Collaborative Practice in order to thoroughly understand the techniques involved in this area of Family Law practice. Several of our Specialist Family Lawyers are Collaborative Practitioners and can help you further if you are interested in finding out more about Collaborative Practice.
While going to Court can seem intimidating and should really only be considered as a last resort, Court proceedings are sometimes necessary to bring some certainty and a timeframe to the resolution of Family Law issues. Besides being used to resolve a dispute, Court proceedings can be very effectively used to obtain Orders as a protective measure or to compel the other party to engage in the process of resolving the issues arising from your separation. It is quite common for a matter proceeding to a final judgment in a Family Law Property Division or parenting matter to cost each of the parties between $100,000 to $150,000. For most people, it is crucial to find a more cost-effective alternative.
Arbitration is a private process in which you and your ex-partner pay a highly qualified person (such as a Barrister or a former Family Court Judge) to make a judgment in your case based on the evidence that each party puts forward to support their case. The judgment that the Arbitrator makes in your case is registered by the Family Court and becomes a binding Order of the Family Court. Arbitration can only be used for Property Division matters (and not for parenting arrangements) and may also be used for limited or interim issues to get your matter on track so that you can resolve the remainder by negotiation or Mediation.
How We Can Help
Sometimes your circumstances might mean that you only need to use one (1) of these processes, or it might be that a combination will work best for you. At Delaney Roberts, we will inform you about each of these processes and when and how they might work in your circumstances to help you to reach a decision as
to how you wish to proceed.
Separation & Divorce
There is a distinction between the legal meaning of separation and the legal meaning of Divorce which is important to understand. It is also important to know that a Divorce and/or separation does not mean the division of assets (which is known as a Property Division or Settlement). The date of a legal separation can be relevant not only to Divorce, but also to Property Division, Spousal Maintenance, Child Support and Centrelink benefits. The date of a Divorce can be relevant to Property Division, Spousal Maintenance, Remarriage, the effect of a Will or Superannuation Death Benefits nomination.
Under Australian Family Law, separation is the act of ending a marriage or de facto relationship. The following are required for separation to occur:
- There is a decision made by one (1) of the parties to a relationship to end that relationship (the decision need not be mutual),
- The person communicates their decision to the other person in the relationship, and
- The parties physically separate (either to separate residences or under the one (1) roof).
Quite often the date of separation is easy to determine as the decision to end the relationship is clearly communicated followed by one (1) party moving out of a shared residence.
Sometimes, separation can be difficult to establish because the decision to end the relationship has not been clearly communicated on a particular date. Also, due to financial constraints, children or other factors, after separation the parties may continue to live together under the one (1) roof. In these cases, the date of separation can usually still be established by examining the day-to-day lives of the parties to determine whether the couple has actually separated. These include:
- Whether the parties shared a room or slept in separate rooms after the alleged date of separation,
- Whether the parties separated the conduct of their financial affairs,
- Whether parties performed domestic duties together or separately such as cleaning and washing for each other,
- Whether or not either of the parties lodged or signed any documents informing government agencies of the separation, such as Applications for Centrelink or ATO documents as a single person, as opposed to a person in a relationship,
- Whether or not the parties continued to be intimate, and
- Whether it was known in general society (such as by telling friends and family), that the parties had separated.
Divorce is the formal legal ending of a marriage and often follows on from a separation. As stated above, Divorce is separate and distinct from Property Division and Parenting Arrangements after Separation.
In relation to a marriage, it is not essential that separation leads to Divorce. In fact, the only thing a person absolutely cannot do until their Divorce Order is final is to get remarried. However, they can still divide property, claim Child Support, change their name, enter a new de facto relationship and so on without being divorced.
Since 1975, we have had a “no fault” Divorce system in Australia. This means that for a couple to Divorce, there is no requirement that a spouse prove that the other spouse has breached the marriage contract and is at fault for the breakdown of the marriage. There is also no advantage for the spouse who has not caused the breakdown of the marriage in that they get a better outcome in Property Division or parenting arrangements because they have not caused the breakdown of the relationship. The actions of one (1) or the other spouse in the breakdown of the relationship are not considered by the Court.
To obtain a Divorce, you must prove that your marriage has irretrievably broken down. The only thing you need to show to prove that your marriage has irretrievably broken down is that you have been separated for at last 12 months at the time of making the Application for Divorce. Your separation will be assessed based upon the facts of your particular situation as set out under the heading “Separation” on page 15.
A Divorce can be obtained by only one (1) spouse, even if the other spouse objects.
Separated couples do not have to Divorce, but you should consult a Specialist Family Lawyer to understand the legal implications of remaining married. Whether you choose to remain separated without being divorced or whether you get a Divorce once you have been separated for 12 months is your choice (except when your ex-partner has sought a Divorce and it is granted, despite your wishes).
Couples may elect to formalise their Property Division and Parenting Arrangements after Separation but remain married. If you do this, then you are not able to remarry. The best choice for you may be based on several factors including a new relationship, financial or taxation considerations, matters in relation to your Will and Estate Planning or religious reasons. Your Family Lawyer will guide you through the factors you need to consider in your circumstances.
1 | WHAT ARE THE IMPORTANT TIME LIMITS AFTER SEPARATION?
Issues arising after separation are incredibly time sensitive. It is crucial that you get early legal advice and act quickly when you need to. Letting things drag on can be to your detriment. You might be prevented from making a claim on the relationship property, limit your chances of getting time with your child or find that you can’t access the home or funds in joint bank accounts.
The main time limits you need to know are:
Property Division and Spousal Maintenance
For a marriage:
One (1) year from the date a Divorce Order becomes final.
For a de facto relationship:
Two (2) years from the date of separation.
For a marriage or de facto relationship if one (1) of the parties is at risk of dying:
Before the death, otherwise a property claim will need to be made against the Deceased Estate by filing an action in the Supreme Court.
There are no time limits for parenting Court Orders except that you cannot apply for a Parenting Court Order for a person who is 18 or over.
An Application for a Child Support Assessment may be made at any time from separation up until the child turns 18 or completes their final year at school (whichever happens last). The Child Support Agency will assess Child Support only from the date of Application so it is important to make your Application as soon as possible after separation to ensure you will receive Child Support as soon as possible.
Application for Divorce
There is no requirement that you get a Divorce at any particular time, however, you cannot remarry until you are divorced. If you would like to apply for a Divorce, you must have been separated for at least 12 months before you make an Application for Divorce. A Divorce Order triggers the limitation period for Property Division (see above).
2 | HOW LONG DO I NEED TO WAIT TO APPLY FOR:
Divorce – 12 months after separation.
Parenting Orders – immediately after separation, though keep in mind that unless you are exempt, there is an obligation on parents to attempt to participate in mediation prior to bringing an application to the Court.
Property Division – immediately after separation.
Spousal Maintenance – immediately after separation.
Child Support and Centrelink – immediately after separation.
3 | WHO GETS TO STAY IN THE HOME AFTER SEPARATION?
Technically, the person who is legally entitled to the home. This is the homeowner or the tenant on the Residential Tenancy Agreement.
If both parties are jointly entitled to the home, then both parties are legally entitled to stay in the property after separation. Both parties may then choose to live in the property together, separated under the one (1) roof. This arrangement can be difficult and stressful, so even where both parties own the house, one (1) person will generally live in the house alone, by agreement or by obtaining a Court Order for the exclusive occupation of the home.
If you move out of the home into a rental property, you will be liable to pay the rent for this property unless the other party agrees to. Therefore, it is generally preferable to be the person who stays in the home.
CASE STUDY 1
Milly and Mike have been de facto partners for six (6) years. When they started living together, Milly moved into Mike’s home, which he has continued to own in his sole name throughout the relationship. One day while at work, Milly receives a text from Mike which says, “It’s over. I’ve left your things on the porch. You’ll have to find somewhere else to live.”
Milly returns home to find that Mike has changed the locks and she can’t enter the house. She contacts the Police and tells them that Mike has locked her out of her own home. The Police ask who owns the home. Milly tells them that Mike does. The Police ask for Mike’s contact details and call him. Mike advises the Police that he and Milly have separated and that he has ejected her from the home.
The Police tell Milly that there is nothing they can do as Mike is the legal owner of the house. There is nothing further that Milly can do except to see a Family Lawyer to see if she can get an order for exclusive occupancy of the house so that she can eject Mike and live in the property herself.
Milly gets legal advice that her chances of getting an order for exclusive occupancy of the house are slim at best. Her best option is to pursue a Property Division without delay to get the assets she is entitled to so that she can support herself independently of Mike.
CASE STUDY 2
James and Joel lived together in a de facto relationship for five (5) years prior to their marriage 2 years ago. James has been the primary breadwinner since the birth of their daughter, Elizabeth, 18 months ago, when Joel became the primary carer and stay-at-home parent.
A few weeks after separation, Joel notices that James has not transferred funds to him for his and Elizabeth’s weekly expenses. Joel sees a Family Lawyer who advises him to make an immediate application for a Child Support Assessment and writes to James requesting the payment of Spousal Maintenance to Joel. James does not respond and does not pay Joel any funds.
Joel starts Court proceedings in the Federal Circuit and Family Court of Australia for urgent weekly Spousal Maintenance of $1,000, a lump sum Spousal Maintenance payment of $20,000 and a lump sum payment to fund his legal fees of $50,000, together with a Property Division claim. Joel is able to prove to the Court that James has sufficient income to pay these amounts and that he needs this amount of financial support owing to his role as Elizabeth’s primary carer.
The Court makes Orders for James to pay Joel the amounts that he has claimed, with the Spousal Maintenance to commence straight away and the lump sum amounts to be paid within 14 days.
After separation, parents usually need to come to arrangements about how they are going to continue to co-parent their child/ ren while living apart. These arrangements might include:
- Who the child/ren are to live with,
- How much time the child/ren will spend with each parent and other people such as grandparents,
- The allocation of parental responsibility (ie. who is to make major long-term decisions for the child/ren),
- How the child/ren will communicate with a parent they do not live with (or other people),
- Arrangements for special days and holidays, and
- Arrangements for a child/ren to travel with one (1) parent.
Sometimes parents can reach agreement about how they are going to continue to co-parent their child/ren after separation and continue in this way, making adjustments for the child/ren as they grow older, without any issues.
Often parents are not able to reach agreement about all aspects of co-parenting their child/ren after separation. Sometimes, a structured negotiation, such as a Mediation, will assist parents to reach agreement on some, if not all, issues. If parents are able to reach an agreement, the agreement can:
- Remain a non-binding verbal agreement,
- Be documented in a nonbinding agreement known as a Parenting Plan, or
- Be documented and filed for the approval of the Court which, once approved by the Court, becomes binding Consent Orders, which the parties must abide by and are enforceable through the Courts.
At other times, legal advice is needed to assist parents to understand what the law says about parenting arrangements. If agreement cannot be reached, a Judge or Registrar will determine what arrangements are in the child/ren’s best interests during Court proceedings.
Parenting arrangements are made for children based on their best interests. Very often, significant change to a child’s circumstances is not considered to be in a child’s best interests; children generally manage better when they are in a familiar setting and settled into a routine. Once established, the status quo for a child can be difficult to change, even if there are other good reasons for the change. Therefore, you should avoid allowing a routine to be established if you intend to change it.
When making Parenting Orders, the Court must regard the best interests of the child/ren as the paramount consideration.
How to determine what is in a child’s best interests
The Court determines what is in a child’s best interests by taking into consideration both primary and Additional Considerations that are set out in the Family Law Act 1975 (Cth).
The Primary Considerations are:
- The benefit of the child of having a meaningful relationship with both parents, and
- The need to protect the child from physical or psychological harm or from being subjected to, or exposed to, abuse, neglect or family violence. The need to protect the child from family violence, abuse, neglect or harm outweighs the benefit to the child of having a meaningful relationship with both parents.
The Additional Considerations
There are a number of Additional Considerations, some of which are:
- The views of the child,
- The nature of the relationship of the child with each parent and other persons (including grandparents),
- The likely effect on the child of a change in circumstances including separation from either parent or any other child or relative (including grandparents) with whom they have been living,
- The practical difficulty and expense of a child spending time and communicating with a parent, and
- The capacity of each parent to provide for the needs of the child (including emotional and intellectual needs).
Whether you have Court Orders in place currently, or are making week-to-week arrangements with the other parent, or there is no actual agreement in place, please contact us as a matter of urgency if the other parent:
- Withholds or removes your child/ren from your care without your consent or stops following an existing arrangement that you have reached,
- Shows any indication that they may be intending to relocate (with or without your child/ren) out of the local area,
- Is contributing to any risk of harm or actual harm to your child/ren, and/or
- Your current arrangement isn’t working anymore for you or your child/ren.
1 I WHEN IS A CHILD OLD ENOUGH TO CHOOSE?
Before a child reaches 12 years of age, they are considered not to have sufficient maturity or understanding to decide what is in their best interests, unless they are particularly mature for their age. While their wishes are listened to by the Court, there is unlikely to be a large amount of weight given to those wishes when determining what parenting arrangements are in the child’s best interests. The younger the child, the less weight will be given to their wishes.
From 12 years of age, a child’s wishes start to be given weight so as to have a real impact on what is considered to be in their best interests. This increases with their age until by 14 years of age they can generally make decisions for themselves, including how they spend time between parents, which school they attend, how they communicate with their non-resident parent, and so on (unless the child is particularly immature or developmentally delayed).
If parenting Orders have been made for a child who is over 14 years and starting to “vote with their feet”, parents must be careful to ensure that the choices of the child are not causing an unintended breach of the Orders. In this case, a parent should seek that the Orders be changed or dismissed.
2 | HOW MUCH TIME SHOULD A CHILD SPEND WITH EACH PARENT?
It depends on the circumstances. The legal rule for working out how much time a child should spend between parents is that, where there is no family violence, it must first be considered whether a child spending equal time between their parents is practical and, in the child’s best interests.
Sometimes, equal time is not practical due to the distance between parents’ homes, parents’ work commitments and so on. Quite often, equal time is not in the child’s best interests due to the age of the child. Where a child is under four (4) years old, equal time will generally not be in their best interests due to the time they would need to spend away from their primary attachment figure and/or the frequency of transitioning between parents. Where a child is in primary school and has a good relationship with both parents, equal time may be in their best interests.
3 I CAN I RELOCATE WITH THE CHILDREN?
Unless the other parent of your child/ren agrees to you relocating with them, you cannot make changes to your child/ren’s living arrangements that make it significantly more difficult for them to spend time with the other parent. Therefore, you can relocate the child/ren’s residence to a different house, but not such a distance away from your current house that it will be significantly more difficult for the child/ren to spend time with the other parent.
In practice, this means that it is likely to be acceptable for you to move the child/ ren’s residence to the next suburb, but not more than about 30 minutes away from your current home. Please note the relevant residence is that of the child/ ren and not of you. Therefore, you can move as far away as you want, but not with the children, unless the other parent consents. If you choose to move far away from the child/ren, their time with you is likely to be limited due to the distance.
Moving a child’s residence (with your own change of residence), particularly interstate or overseas, can have the effect of reducing the child’s time with the other parent so significantly that they cannot enjoy the benefit of a meaningful relationship with that parent. Whether or not you are permitted to do so is determined in the child’s best interests and the outcome is dependent on the circumstances of each case. Factors including a parent’s need to return to their native country for family support or increased work opportunities in the proposed new location can be circumstances that are sufficient for relocation to be approved by a Court, however, this is usually on the basis that a meaningful relationship can be continued with the other parent through additional holiday time and frequent communications.
CASE STUDY 1
Molly has left Perth to spend a year backpacking around the east coast of Australia. She meets Max in Sydney (Max’s hometown) and they start a relationship. Three (3) months later, Molly falls pregnant. Molly is anxious to return to Perth where her entire family and support network resides. Molly and Max decide to relocate to Perth by the time Molly is six (6) months pregnant to establish themselves permanently in preparation for the birth.
Molly sees her Obstetrician for the last time before they depart for Perth. The Obstetrician informs Molly that she cannot fly as she is at significant risk of deep vein thrombosis, posing a risk to herself and the baby. Molly regretfully remains in Sydney until after the birth of the baby when she is cleared to travel.
Molly and Max travel to Perth when the baby is eight (8) weeks old. After a week there, Max decides that he wants to return to live in Sydney and insists that Molly and the baby return with him. Molly refuses to return with him wanting to remain with her family. The relationship breaks down and they separate.
On Max’s return to Sydney, he starts Court proceedings for Molly and the baby’s return to Sydney. Max is initially successful and Interim Orders are made for Molly to return to Sydney, however, at final hearing, Molly establishes to the Court that it would not be in the baby’s best interests to return to Sydney without her, as the baby’s primary attachment figure, and that she is unable to leave Perth due to her reliance on her support network there. Further, the Court is satisfied that the baby will continue a meaningful relationship with Max through frequents visits by Max to Perth, which he is readily able to afford.
CASE STUDY 2
Grant and George have 2-year-old twins at the time of separation. Grant works in Sales for an IT company and works long hours. He is also required to travel interstate at least twice a month in his role.
George has been the primary carer for the twins since their birth by surrogate and thereafter has taken time off work to care for them full time. He has taken care of almost all the twins’ care needs since their birth, with Grant assisting where he can when he is not at work.
On separation, Grant moves out of the home and rents a unit close by. The fathers consider that the twins are too young to spend more than one (1) night a fortnight away from George, as their primary attachment figure, however, they agree that Grant should spend as much time with the twins as his work permits. The fathers come to an arrangement where the twins spend time with Grant from Saturday morning to Sunday afternoon each fortnight, and also during two (2) afternoons each week from 4pm to 6pm when Grant’s work permits.
The fathers agree to revisit this arrangement when the twins are four (4) years old with a view to increasing their time with Grant.
CASE STUDY 3
At the time of separation, Simone and Steven have three (3) children, aged ten, seven (7) and four (4) years old. The separation has mainly been due to Simone’s ongoing use of methamphetamine, which has caused Simone to experience psychotic episodes leading to her violent conduct around the children and Steven.
Steven leaves Simone, taking the children with him. He tells her she cannot spend any time with the children until she can prove that she is clean of drugs and alcohol. Simone rejects this proposal and starts Court proceedings seeking the primary care of the children.
At the time of the Court proceedings, Simone is still taking methamphetamine and smoking marijuana. Steven’s Lawyer seeks an Order that Simone produce at least three (3) months of blood test results to the Court showing that she is clean of drugs and alcohol before she spends any time with the children, which is to be firstly day time only, supervised for six (6) months with the requirement for clean drug and alcohol tests continuing through this period.
The Court grants this Order. Simone produces three (3) months of clean blood tests and commences time with the children supervised by her parents. After a further two (2) months, Simone misses a drug test and, pursuant to the Orders, her time with the children stops. She produces a further three (3) months of clean tests and supervised time with the children recommences.
She continues her sobriety throughout the six (6) months of supervised time and the Court requirement for supervision is removed. She starts unsupervised day time visits with the children and progresses to overnight time without any relapse. She continues her sobriety and builds the children’s time with her over the next three (3) years to equal time, shared with Steven, in a week about arrangement.
Following separation, it is usually necessary to end the financial relationship that has established between a couple during the relationship. To achieve this, the pool of property, including assets, debts and superannuation owned by the parties (jointly or separately) is divided between them to achieve a fair outcome.
Sometimes, it will not be necessary to change the ownership of the property to achieve a fair division. This might be the case where there is a short, de facto relationship with no children and the parties have kept their financial interests separate.
Generally, however, where a couple has combined assets during a relationship, the ownership of assets does not necessarily reflect what is fair if each person were to just walk away. For example, a working parent may use their income to purchase all assets in their name while the stay-at-home parent has supported the working parent but does not hold any assets in their name. In such a case, the law will enable the transfer of some (perhaps half) of the assets to the stay-at-home parent to reflect their contributions as homemaker and parent.
The Four-Step Process
When deciding what percentage of the available assets each party is entitled to, the Court adopts a four-step process. Your Family Lawyer will provide you with advice in relation to your entitlements using the same process as follows:
Step 1: What is the property pool available for division?
The Property Division process starts by working out what each spouse owns. This includes items like cars, bank accounts and real estate and also businesses and trusts. All the property to which the couple is entitled to is in the property pool for division between them. The property may be owned by a spouse individually, jointly with the other spouse or jointly with other people.
The types of assets and debts that are usually in the property pool are:
Assets: House, Cars, Bank Accounts, Furniture and Furnishings, Jewellery, Shares (in a publicly listed company such as Telstra, or in private company such as the trading company of the family business), Family Trust (this may be where the Family Trust owns the family business).
Superannuation is also included in the property pool available for division.
Debts: Home loan, credit card, personal loan, consumer credit.
How to find out about your ex-partner’s property
Parties have a duty to the Court and to each other to make full and continuing disclosure of their financial circumstances that are relevant to an issue in dispute. If you and your ex-partner reach an agreement, or the Court makes Orders, where full financial disclosure has not been made, there is a risk of a penalty for the non-disclosing person or that the agreement or Orders will be set aside by the Court. In addition, a Family Lawyer cannot assist a client to hide assets or to continue to act for a client where they know the client is not making full disclosure.
Even where a person does not provide full financial disclosure, any transfers of money or property can generally be traced by obtaining the relevant documents under Subpoena. Where assets have been transferred to other people to defeat a Family Law property claim, the law provides that these assets can be “clawed back” into the property pool available for division.
The exception to this is cash: dealings in cash are difficult to trace and therefore difficult to claw back. If you are aware that your ex-partner has dealt with cash, photographic evidence of large amounts of cash, such as cash that they have stored in a box in the home, can assist you to prove this later.
Valuing the assets
For the purposes of a Property Division, assets are valued at the current market value at the date of the division. Therefore, the value of the assets must be at the current market value at the time they are being valued, not their value at separation or some other date.
Where each party wishes to retain certain assets from the property pool, it stands to reason that they want to keep the valuation of that asset as low as possible – the lower the value of the assets they are keeping, the more they will get of the remaining property pool to make up the percentage they are entitled to.
Where significant assets, such as real estate or business interests, are part of the property pool, there can be a difference in the respective positions of each party of hundreds of thousands of dollars.
When parties do not agree on the value of an asset, an indication of value (such as a real estate market appraisal, a Red Book valuation, or a receipt (for smaller items such as furniture or jewellery), will often resolve the dispute.
If the dispute continues, an expert valuation report may help to settle the dispute, but not always. Occasionally, each party will have expert valuation reports that give differing values. Therefore, before ordering a valuation report, the parties should agree on the valuer to be appointed, pay equally for the report and agree to be bound by the value provided in their valuation so as not to waste money on valuation reports which are disputed by the other party.
Even where the parties have obtained a joint valuation report, disputes about value can continue on the basis that the valuation report was not properly prepared. Sometimes, a valuation dispute will not be resolved until a final Court hearing where a Judge will make a decision, based on the evidence, of the current market value of the asset.
Step 2: What contributions has each person made to the property pool?
Work out what each person has contributed to the acquisition, conservation and improvement of the property pool. Contributions are relevant in relation to all property the parties have owned at cohabitation, during the relationship and since separation, including assets that are no longer owned. Contributions must be one (1) or more of the following types of contributions:
Direct financial contributions:
A direct financial contribution is a payment made by a spouse directly towards the purchase, conservation and/or improvement of an asset.
- The equity owned in a house at the start of the relationship.
- Using one’s own income to make mortgage repayments.
- Using an inheritance to pay off the home loan, as savings or to purchase other assets.
Indirect financial contributions
An indirect financial contribution is a payment made towards expenses so that the other party’s income can be instead applied to a direct financial contribution.
- A spouse paying living expenses with their wage so that the other spouse can use their wage to make mortgage repayments.
- A spouse paying for a holiday while the other spouse accumulates their income as savings in a bank account.
- A parent of a spouse allowing the couple to live in their home rent-free so that the couple can use their income to make mortgage repayments on their own property.
Direct non-financial contribution
A direct non-financial contribution is work done by one (1) of the parties to maintain or improve an asset without making a payment towards it.
- Doing renovation works to a property.
- Looking after the maintenance of a home’s exterior.
- Maintaining and operating a stock trading account.
Indirect non-financial contribution
An indirect non-financial contribution is work done by one (1) of the parties that is not done directly to an asset and is not of a financial nature, but that still contributes to the acquisition, conservation or improvement of an asset.
- Caring for children to enable the other party to attend work to earn an income.
- Caring for children so that the other party can do renovations or repairs and maintenance to the home.
- Doing the housework to support the other party to attend work and earn an income.
Contributions to the welfare of the family
Contributions to the welfare of the family are not required to be towards the “acquisition, conservation or improvement” of the property pool, as are the previous categories of contributions. Contributions to the welfare of the family are considered valuable on their own merits and are given weight accordingly. Therefore, the work that one (1) party does as homemaker and parent may have the effect of offsetting significant direct financial contributions of the other party. Therefore, a breadwinner on a high income and a stay-at-home parent of three (3) children may be considered to have made equal contributions to the property pool despite the differences in their roles.
Timing of Contributions
Contributions to the property pool are relevant during three (3) specific periods:
1 | At the commencement of the relationship
Contributions at the commencement of the relationship are likely to be direct financial contributions that are readily quantifiable. The contributions of each party at the start of the relationship (at the commencement of cohabitation) are weighed against each other, so if both parties have brought assets of a similar value to the relationship, they are assessed as having made equal contributions at this stage.
Where one (1) party brings a greater share of assets, this party is likely to be entitled to a greater share of the assets on a contributions-basis, unless these initial contributions are entirely offset by the contributions of the other party throughout the relationship and before the Property Division.
Generally, in a short relationship, where one (1) party has made greater initial contributions, there has been less time for the other party to make enough contributions throughout the relationship to offset the initial contribution. Therefore, the contributions are likely to be weighed in favour of the party with the greater initial contributions.
Generally, in a long relationship (ten years+), as there has been more time during the relationship for the party who has not brought assets to the relationship to make other types of contributions (particularly as homemaker and parent), the party with the greater initial contributions is likely to have less weight given to their initial contributions.
2 | During the relationship
Throughout a relationship there is usually a myriad of contributions made by each party to the property pool and welfare of the family as part of the fabric of family life. These might involve accumulating property, paying the costs of living, keeping a home and raising children. The longer the relationship, the more likely that each party will be assessed to have made more-or-less equal contributions.
3 | After separation
As living arrangements change at the time of separation, so do the types of contributions made by each party. One (1) party may make all home loan repayments and have the primary care of the children, but they are no longer supported by the other party as they were during the relationship. Therefore, where one (1) party takes on the majority of contributions after separation, this can shift the assessment of contributions in their favour. Where the period between separation and Property Division is short, this discrepancy does not have a large, if any, impact. Where the period between separation and Property Division is long (several years or more), an imbalance in post-separation contributions can have a significant impact on the ultimate contributions-based division of assets.
Legal principles that have developed in relation to contributions
Over many years of the Courts considering, weighing and assessing the contributions of parties to a former relationship, several principles have developed in relation to particular circumstances:
- The longer the relationship, the more likely that the contributions of the parties will be assessed as equal, unless there has been a considerable lump sum contributions (such as an inheritance) made by one (1) party.
- The shorter the relationship, the more likely that the contributions of the parties will be assessed in the same proportions as at the commencement of the relationship.
- There is no extra loading for contributions for special skills, such as the contribution of significant funds during the relationship by virtue of one (1) party being a highly successful property developer, surgeon, etc. Extra weight is not given to a party’s contributions simply because their salary is higher than the other party.
- There is no extra loading for “Super Mum” contributions, where a parent (usually the female partner) works full time and completes most of the parenting and household duties on daily basis over many years, while the other parent works full time but does not bear the same load of parenting and household duties.
- Contributions are not approached as a mathematical calculation. Instead, the myriad of contributions of each party are weighed, with real weight given to the role of homemaker and parent. So where one (1) party is the breadwinner and the other the homemaker, the contributions made in their daily lives are considered equivalent (despite the fact that the breadwinner may earn more than it would cost to pay for the household work).
- There is rarely a deduction for “negative contributions”. Losses incurred in the course of the relationship are to be shared between the parties (although not necessarily equally) unless there has been a course of conduct designed to minimise the value of assets or when one (1) of the parties has acted recklessly or negligently with the assets so as to minimise their value (eg. intentionally running down the value of a business or financial losses incurred as a result of gambling).
- Windfalls made in the course of a relationship are shared in the proportions of all the other contributions made by the parties during the relationship. The windfall is not necessary the contribution of the party who took the action that resulted in the windfall (eg. buying a lottery ticket).
Step 3: Which person has the greater future need?
The next step is to consider the circumstances of each of the parties to ascertain whether they have greater responsibilities, disabilities or disadvantages than the other party that mean that they should get the division of property adjusted in their favour.
The factors that the Court will take into consideration in determining whether there should be an adjustment of the contributions-based division of the property pool include:
- The age and state of health of each of the parties.
- The income, property and financial resources of each of the parties and the physical and mental capacity of each of them for gainful employment.
- Whether either party has the care or control of a child under 18 years.
- Commitments of the parties that are necessary for them to maintain himself or herself, or a child or another person the party has a duty to maintain (eg. financial support of an elderly parent).
- The responsibilities of either party to support another person.
- The eligibility of either party to a Centrelink or superannuation pension and the rate of the pension.
- A standard of living that in all the circumstances is reasonable.
- The need to protect a party who wishes to continue that party’s role as a parent.
- If either party is cohabiting with another person – the financial circumstances relating to the cohabitation.
- The extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party.
- The duration of the marriage or de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration.
- The Child Support payments that a party has provided, is to provide, or might be liable to provide in the future for a child of the marriage or de facto relationship.
- Any fact or circumstances which, in the opinion of the Court, the justice of the case requires to be taken into consideration.
The circumstances must be considered for each party and then weighed against each other so that, where one (1) party has future needs that outweigh the other party’s, there is likely to be an adjustment of the contributions-based Property Division in their favour.
In practice, assessing future needs can be quite straightforward where both parties are of a similar age and state of health and one (1) party has the care of young children and cannot earn an income. It is quite clear in such a case that the future needs of the party with the care of the children outweigh that of the other party and that there should therefore be an adjustment of the assets in their favour.
However, in cases where each party has considerable future needs, it may be difficult to determine which person, if any, has the greater future needs. Each person may have poor health and be unable to earn an income but, where neither party has future needs factors that outweigh the other person’s, there will not be an adjustment.
Step 4: Determine whether the proposed division of property is just and equitable
At this final step, it must be just and equitable to make an Order to alter the property interests of the parties and, if so, that the Order itself be just and equitable.
Just and equitable means that the outcome is not only right, but that it is fair between the parties.
This step is to ensure that the Court does not alter the property rights of parties unless justice requires it to do so. If the Court decides it is just and equitable to make any Order, the Court must be satisfied that the alteration of property goes no further than is needed to do justice. The primary concern of the Court at this step is the existing and future needs of the parties.
This step recognises that the calculation of percentages or an equal distribution is not necessarily the fairest outcome if it results in one (1) person receiving property such as real estate and savings, and the other receiving only superannuation, where the superannuation cannot be accessed for several years. In this situation, a just and equitable outcome may still involve an equal division of property but where the parties each end up with real estate, savings and superannuation.
THE IMPORTANCE OF FINALISING YOUR PROPERTY DIVISION – REDUCING THE RISK OF FUTURE CLAIMS
It is always necessary to formalise a Property Division after separation (even when ownership of assets do not change) to avoid one (1) party making a later claim, even several years after separation.
The importance of this step should not be underestimated. Where a Property Division is not formally finalised, you risk:
- Your ex-partner making a claim on assets that you receive after separation, such as an inheritance or money that you earn from your own endeavours.
- Being involved in a Property Division between a former ex-partner and your current partner (from whom you have recently separated). This will mean that you are involved “in a property claim” where there are two (2) parties against you.
- Being financially responsible for debts of your ex-partner.
- Your ex-partner successfully making a claim against your Deceased Estate in the event of your death.
A Property Division can be finalised by Consent Orders (which is an agreement that is approved by the Court) or a Financial Agreement under the Family Law Act 1975. Your Family Lawyer can advise you about which option is best for you and thereafter draft an agreement or set of Orders which are binding and enforceable.
1 | WHAT HAPPENS IF WE DON’T FINALISE A PROPERTY DIVISION BETWEEN US?
As long as you and your ex-partner have not formally finalised a Property Division between you with a binding Financial Agreement or Consent Orders in place, you continue to be at risk of your ex-partner making a property claim against you in the future. This might be after you have received an inheritance, built up your property portfolio or even after you have started a new relationship.
While there are limitation periods for making a Court application for a Property Division (1 year from the date of Divorce for marriage; 2 years from the date of separation for de facto relationship), it is possible to get the Court’s permission to make an application after the limitation period expires so there is no guarantee that you will be protected from a claim after the limitation period expires.
2 | WHO GETS WHICH ASSETS?
Depending on the nature of your assets and liabilities, there are often many options available for who takes which assets or debts.
Often parties come into negotiations with a goal in mind regarding what they do or do not want to keep. Once you have received legal advice about your likely range of entitlements, you should obtain advice from your financial planner and/ or mortgage broker to see if your idea of the perfect settlement is realistic.
For example, depending on the size of your asset pool, if you really want to retain your house, you will need to establish what your borrowing capacity is. You should keep in mind that you may need to refinance the entire balance of your mortgage (if you have one) and potentially pay your ex-partner a sum of money by way of a lump sum property settlement. It is important to work this out prior to coming to an agreement.
You should also be aware of any taxation issues which may flow from a proposed property settlement. For example, if you plan to sell an investment property to facilitate a settlement, you need to seek advice from your accountant in relation to any potential Capital Gains Tax liabilities.
3 | HOW IS SUPERANNUATION DIVIDED?
As parties are not entitled to access their superannuation until preservation age, superannuation can only be transferred between spouses as a result of a “Super- Splitting Order”. A super-splitting Order transfers a percentage or a dollar amount of superannuation from one (1) spouse’s superannuation entitlements to the other spouse’s superannuation entitlements, either to a new account in the existing superannuation fund or to a complying fund of the receiving spouse’s choice.
Typically, in a Property Division, superannuation is transferred between spouses so they each end up with the same amount.
4 | WHAT HAPPENS WITH A FAMILY BUSINESS IN A PROPERTY DIVISION?
Where one (1) or both of the parties owns a business, or part of a business, this interest is included as the property available to be divided between the parties.
The interest in the business will usually need to be professionally valued to work out its current market value. If the business is little more than one (1) of the parties making a living by being self-employed, then it is likely that the business itself will have a minimal value. If the business can operate without the daily exertion of the party and employs staff and/or has significant plant and equipment, the business is likely to have a market value worth the cost of obtaining a valuation report.
Once the parties’ respective entitlements to the property pool are determined, the party for whom the business is worth the greatest value (ie. the party who has been the key person for the business) will usually retain the business. The other party will then take the other assets of the property pool to make up their share.
When there is a dispute between the parties about who should retain the business (such as where both parties were involved in the establishment and carrying-on of the business), the Court will ultimately decide for whom keeping the business will result in the fairest outcome.
CASE STUDY 1
At separation, James and Jenny have been married for 25 years and have a property pool of approximately $4 million plus superannuation of $1 million. Each of them has made equal contributions to the property pool and therefore the contributions-based division of the property pool at this point is assessed as 50/50, with each party entitled to $2 million plus superannuation of $500,000. Throughout the marriage James has built a significant earning capacity as an Executive and earns $450,000 per year, while Jenny gave up her career to care for the children and has a very limited ability to re-enter the workforce. If she were able to secure employment, her earning capacity is limited to approximately $45,000 per year.
In this case, the contributions-based division of the non-superannuation property pool is likely to be adjusted in Jenny’s favour by 5-10% to account for the disparity in the parties’ respective earning capacities. Superannuation is not adjusted for Jenny’s future needs as it is anticipated that the parties will have similar needs in relation to superannuation once they reach preservation age. Therefore, Jenny is entitled to 60% ($2.4 million) of the non-superannuation assets and 50% ($500,000) of the superannuation. James is entitled to 40% ($1.6 million) of the non-superannuation assets and 50% of the superannuation ($500,000).
CASE STUDY 2
Miles and Maura have been separated after a de facto relationship of four (4) years. At the date of cohabitation, Maura owned a house with equity of $200,000 and superannuation of $50,000, while Miles owned only superannuation of $80,000. Throughout the relationship, both lived in Maura’s house and both worked and combined their income ($65,000 per year earned by Maura and $150,000 per year earned by Miles). Miles paid all living expenses so that Maura could make additional home loan repayments.
Due to market forces, Maura’s house increases in value by $600,000, so that the equity in the property at the time of separation is $800,000 including the home loan repayments made throughout the relationship. Maura’s superannuation has increased to $75,000 and Miles’s superannuation has increased to $120,000.
In this case, the non-superannuation assets (property equity of $800,000) are likely to be divided $500,000 (62.5%) to Maura and $300,000 (38.5%) to Miles on the basis that Maura be returned to the financial position she was at the start of the relationship and the increase in equity by market forces is shared equally between the parties. In relation to superannuation, each party is likely to retain their own superannuation ($75,000 (38.5%) to Maura and $120,000 (61.5%) to Miles).
Spousal Maintenance is a payment of financial support to a spouse with financial need, from a spouse with surplus income or assets. The payment is usually periodic (weekly or monthly) and can also be paid as a one-off lump sum amount. It is different from Child Support which is payable for the costs of care of the children as Spousal Maintenance is payable for the financial support of one (1) of the parties to the relationship.
A party’s right to claim Spousal Maintenance is in addition to their rights to a Property Division. Therefore, a party to a marriage may receive both a Property Division and Spousal Maintenance following the breakdown of the relationship.
Spousal Maintenance is generally a short-term arrangement which starts after separation and ends once the financially weaker spouse re-establishes their financial position on receiving their Property Division.
Spousal Maintenance may be paid on an urgent basis until resolution of the Property Division, as a lump sum at the time of the Property Division, Spousal Maintenance and/or, in rare cases, for a number of years following the Property Division.
Unless you and your ex-partner can agree, you will need to make an application to the Court for a Spousal Maintenance Order. This can be a costly application to pursue so must be considered carefully.
The first step in establishing whether or not you may be entitled to Spousal Maintenance payments is to overcome the ‘threshold test’ which asks two (2) questions:
- Are you unable to ‘adequately support’ yourself on your income due to:
- Your care for a child of the marriage who is under 18 years,
- Your age or physical or mental incapacity for appropriate gainful employment, or
- For any other adequate reason.
- Is the other party “reasonable able” to pay you.
In determining whether Spousal Maintenance is payable the Court must have regard only to the following:
- The age of each spouse,
- Physical health and mental capacity of each person to gain or continue employment,
- Who has care of child/ren and if any of them are under the age of 18 years,
- Commitments of each party to support themselves and/or another person,
- Standard of living,
- Eligibility for a pension that is not an income-tested pension,
- Whether maintenance would allow the recipient to fund education or training to gain employment or establish a business to support themselves in the future,
- If the person applying for maintenance has contributed to the income, earning capacity, property and financial resources of the other person,
- Duration of the relationship and any impact it has had on the earning capacity of the spouse applying for maintenance,
- Whether either spouse is living with another partner or spouse and, if so, the financial situation of the other partner or spouse,
- If a spouse wishes to continue being a carer for their child/ren,
- Any Child Support currently being paid or that may need to be paid in the future, and
- Any other circumstances that may need to be considered.
In determining the amount of Spousal Maintenance to be paid, the Court will give consideration to a standard of living that is reasonable in all the circumstances. ‘Reasonable’ does not necessarily mean the standard of living enjoyed prior to the breakdown of the relationship as this may not be affordable given that the combined expenses of a separated couple are generally higher than when they were living together. However, there is consideration given to the lifestyle the parties enjoyed in the Court’s determination of what is ‘adequate’ in the circumstances.
Therefore, where the paying party can afford to do so, the Spousal Maintenance Ordered by the Court may be more than subsistence-level support and include funds for luxury accommodation, designer clothes, overseas travel and so on, if this was the lifestyle enjoyed by the parties during the relationship and reasonable in the circumstances.
Immediately after separation. A claim should be made as soon as possible as even urgent Spousal Maintenance claims take several weeks to be decided by the Court.
An application for Spousal Maintenance must be made within one (1) year of a Divorce Order or within two (2) years of separation (for a de facto relationship). There are limited exceptions to these time limits.
1 | IF I’M AT RISK OF PAYING SPOUSAL MAINTENANCE, SHOULD I TAKE STEPS TO REDUCE MY INCOME?
A person’s liability to pay Spousal Maintenance is determined based on their capacity to earn, rather than their actual earnings at the time of the determination. Therefore, artificially reducing your income to defeat a Spousal Maintenance claim is generally unsuccessful as the Court will determine how much you can earn on the basis of previous tax returns and payslips.
If there is a genuine reason for the reduction of your income (such as the care of your children reducing your working hours), this will be taken into consideration in determining how much Spousal Maintenance you are able to pay, if any at all.
2 | CAN I BE ENTITLED TO SPOUSAL MAINTENANCE IF I AM RECEIVING CENTRELINK BENEFITS?
Yes. In fact, when considering the Spousal Maintenance payable, the Court must disregard any entitlement of the person seeking Spousal Maintenance to an income tested pension or benefit. Therefore, an income tested pension or benefit is not considered to be your ‘income’ when assessing whether Spousal Maintenance should be paid to you.
3 | IF I AM PAYING EXTRA CHILD SUPPORT, WILL THIS REDUCE HOW MUCH SPOUSAL MAINTENANCE I AM REQUIRED TO PAY?
No, Child Support and Spousal Maintenance are completely independent of one (1) another. Even where you are paying over and above the amount of Child Support Assessment, this is not a matter the Court can take into consideration when determining whether and how much Spousal Maintenance is to be paid. Similarly, the payment of Spousal Maintenance will not alter your liability to pay Child Support.
4 | IF I GET A JOB, WILL IT REDUCE MY ENTITLEMENT TO SPOUSAL MAINTENANCE?
Yes, generally your entitlement will be reduced as your ex-partner will make an application to the Court to reduce how much Spousal Maintenance they must pay to you on the basis of your increased income.
5 | IS SPOUSAL MAINTENANCE CONSIDERED INCOME FOR TAX PURPOSES?
No, Spousal Maintenance is not considered taxable income.
6 | DO I HAVE TO INFORM CENTRELINK IF I AM RECEIVING SPOUSAL MAINTENANCE?
Yes, you must inform Centrelink of any entitlement to Spousal Maintenance. Spousal Maintenance is not included by Centrelink in assessing income support, however, it is included in the assessment of family payments.
CASE STUDY 1
Janine has been staying at friends’ homes with her infant since separation a few weeks ago. She cannot work due to her infant’s dependency on her and has no other access to funds for hers and her baby’s needs. She and her Specialist Family Lawyer have made a number of requests to her ex-partner, Jeremy, for funds to support them, however, all requests have been refused. Jeremy is employed in an executive position in which he earns in excess of $250,000 per year.
Janine’s Specialist Family Lawyer assists her to apply for legal finance to cover the costs of Court proceedings until she can access some of the funds that are being held by Jeremy. She is also advised to make an application for a Child Support Assessment for the baby and to approach Centrelink to claim the Parenting Payment and other benefits to which she is entitled including, Family Tax Benefit.
Janine starts Court proceedings including for urgent and interim Spousal Maintenance. The first Court date listed urgently is two (2) weeks after her application is filed. On this occasion, Janine can establish to the Court that Jeremy has surplus funds after paying his own expenses to cover Janine’s expenses. The Court
awards Janine $750 per week in urgent Spousal Maintenance, until the Court can consider any evidence in a more detailed manner at a later date.
There is a further Court date six (6) weeks later, after the parties have had an opportunity to put further evidence before the Court. In this period, Janine’s Specialist Family Lawyer obtains Jeremy’s financial documents to clearly prove to the Court that Jeremy has sufficient funds to pay $1,500 per week to cover
Janine’s expenses including for her to rent accommodation until she receives her final Property Division.
CASE STUDY 2
Belinda and Brian have been married for 12 years and have two (2) children aged 10 and eight (8) years, who attend the local school. Brian works as a salesperson and earns $120,000 per year. Belinda works part time in retail and earns $32,000 per year.
After separation, Brian continues to make all home loan repayments for the principal residence where Belinda and the children remain living. Brian has rented a 2-bedroom unit close by where the children can stay with him five (5) nights per fortnight pursuant to the parenting agreement he has reached with Belinda. He also pays Child Support to Belinda for the costs of care of the children as assessed by the Child Support Agency.
Belinda makes a Court application for the payment of Spousal Maintenance by Brian as he is able to earn much more than she is. Belinda’s application fails. The Court is not satisfied that Brian has sufficient funds to pay Spousal Maintenance after he has paid his other liabilities, including the home loan payment, his rent and Child Support.
Child Support is an ongoing, periodic payment, usually from one (1) parent to the other, for the financial benefit of the child/ren following the end of a marriage or relationship. Child Support may also be paid to non-parent carers of the child/ren, such as grandparents or legal guardians.
You do not have to go through the Child Support Agency to work out Child Support arrangements with the other parent. You and the other parent can come to a
private agreement about how much Child Support is to be paid, when and what it will cover.
You don’t need to get a Child Support Assessment if this is how you want to proceed, however, in this type of informal arrangement, either party can at any time approach the Child Support Agency for a formal assessment of the Child Support payable and, once the assessment is made, the paying parent becomes liable to pay the Child Support despite the earlier agreement.
Private Child Support arrangements can work well if both parents are on the same page about what Child Support covers and how much is to be paid. Further, it is only successful Child Support where the paying parent does not default. In the case of default, there is no way to pursue overdue payments.
Where parents are not completely on the same page about Child Support arrangements, one (1) party might opt for a Child Support Assessment to be made by the Child Support Agency.
In Australia, our Child Support scheme is administered by Child Support (the Child Support Agency) which is operated by the Department of Human Services. The Child Support Agency performs the following:
- Receives applications for Child Support Assessments from a parent,
- Makes a calculation of how much one (1) parent is to pay to the other for the costs of care of the child/ren,
- Collects the periodic Child Support payments from the paying parent, and
- Transfers these payments to the receiving parent.
Once a Child Support Assessment has been made, the receiving parent can choose whether the payments will be made privately by the other parent to them (“Private Collect”), or whether they want Child Support to collect payments and forward the payment to them (“Child Support Collect”).
Private Collect has the advantage of parents being able to be flexible about Child Support including whether payments are paid directly to the receiving parent or directly for school fees or similar, or easily changing the Child Support payable if the child/ren’s circumstances change. However, if the paying parent defaults on payments, the Child Support Agency can only collect overdue payments going back three (3) months (and nine (9) months in exceptional circumstances). Private Collect may also affect Family Tax Benefit payments, so Centrelink will need to be informed where Private Collect is chosen.
Where there is a risk of late payments or a paying parent does not lodge annual tax returns, the receiving parent should opt for Child Support Collect, where the Child Support Agency is responsible for collecting payments from the paying parent and forwarding them to the receiving parent. The Child Support Agency can pursue all arrears payable under Child Support Collect and can also calculate the Family Tax Benefit payable.
Child Support is assessed using a complex 8-step formula which takes into consideration the following:
• The income of each parent,
• The costs of care of each child (this is a set amount which is arrived at by using the combined income of the parents, the number of children and the ages of the child/ren),
• How many nights per year the child/ren are in each parent’s care. The effect of this formula is that the Child Support Agency:
- Firstly, deducts an amount for each parent to support themselves.
- Then, calculates the costs of raising child/ren according to the remaining combined Child Support income of both parents.
- Finally, the costs of the child/ren are divided between the parents according to their share of the combined income.
You can calculate the amount of Child Support that may be assessed in your circumstances by using this Child Support Calculator provided on the Child Support
If you disagree with a decision made by the Child Support Agency you may wish to lodge an objection. An objection is a request to formally review the decision. All objections must be made in writing or by using an ‘Objecting to a Child Support decision’ form available online.
The time limit for making an objection is 28 days from the date of receiving the original decision (this time limit is 90 days if you live outside Australia in a reciprocating jurisdiction). If you are unhappy with the outcome of the reconsideration of the assessment, you can make a further application to the Administrative Appeals Tribunal within 28 days of the decision on your objection.
If your matter is already in the Federal Circuit Court or Family Court, it may be possible to make an application for a Departure Order from an existing Child Support Assessment. You can also review the decision of the Administrative Appeals Tribunal through the Court.
Limited Child Support Agreement
A Limited Child Support Agreement enables you to arrange with the other parent to change how Child Support is paid, provided that the amount paid is equivalent to, or greater than, the assessed amount of Child Support.
A Limited Child Support Agreement enables you to make arrangements about payments directly to school, or payments in kind, such as a payment towards the home loan, rather than receiving weekly or fortnightly payment of funds.
A Limited Child Support Agreement can be made by completing a form provided by Child Support. There is no requirement that either party obtain legal advice for a Limited Child Support Agreement to be valid.
Binding Child Support Agreement
Parents can agree to an amount of Child Support that is less than the assessed amount by entering into a Binding Child Support Agreement. Parties must have obtained independent legal advice as to the pros and cons of a Binding Child Support Agreement and a certificate provided by each of the Solicitors who have provided such advice. A Binding Child Support Agreement may be helpful when:
- The parties have agreed to a Property Division where the receiving parent (of the Child Support) will receive a higher percentage of the property pool than they would otherwise have in order to afford to retain the home, on the basis they would forego the full amount of periodic Child Support that had been assessed.
- Where Parenting Arrangements may be resisted by a parent on the basis that they will have to pay more Child Support. Using a Binding Child Support
Agreement, the Parenting Arrangement can be altered without the Child Support Assessment following suit.
Child Support can be complicated and difficult to understand. You should speak to your Specialist Family Lawyer about your options and how you should deal with Child Support in your circumstances.
1 | WHAT IS CHILD SUPPORT MEANT TO COVER?
The amount of Child Support that the Child Support Agency calculates that one (1) parent is to pay to the other is meant to cover all the costs of raising the child/ren including food, entertainment, clothing, schooling and healthcare. The costs of care of a child is worked out through independent research and is increased each year to account for inflation.
The costs of care of the child/ren takes into consideration the parents’ combined incomes and the number and age(s) of the child/ren, to arrive at a likely amount that parents on a particular household income would spend on their child/ren.
2 | WHAT IF THERE IS A DOUBT AS TO PATERNITY?
Provided that your name is on the child’s birth certificate, the Child Support Agency will make an assessment relating to you as the child’s parent. To bring
an end to this assessment, you will need to apply to the Court for a declaration that you are not the child’s parent which is supported by a negative paternity test. You then need to apply to have your name taken off the child’s Birth Certificate and apply to Child Support to bring the assessment to an end.
If you have paid Child Support to a person who has alleged that you are the father where they knew that you were not actually the father, there is an opportunity for you to seek the return of all Child Support payments made.
3 | WHAT IF OUR CIRCUMSTANCES CHANGE?
If your employment or income changes, or the amount of time that the child/ren spend with you changes, you should notify the Child Support Agency. Once the Child Support Agency is notified, it will do an updated assessment (if required) to change the Child Support payable once the change occurs. You should notify the Child Support Agency without delay as, even where an assessed amount changes, it will not backdate the assessment.
4 | HOW DO I MAKE AN APPLICATION FOR A CHILD SUPPORT ASSESSMENT?
Go to the Child Support Agency website and make an online application.
Estate Planning involves the following:
- Your Will,
- Your Power of Attorney,
- Your Appointment of an Enduring Guardian,
- Your Advanced Care Directive,
- Your Superannuation Death Benefit Nomination,
- Your Personal Insurances, and
- Joint Tenancy (ie. your ownership of property with another person(s) as Joint Tenants).
Your Estate Planning is essential to reconsider at the time of separation as the continued operation of any existing documents, or the absence of these important documents, may have unintended consequences. For example, your ex-partner may be able to control your finances or will inherit your property if you pass away.
Just because you have separated from your spouse or partner does not mean that your Will, Power of Attorney, Appointment of Enduring Guardian and other documents will automatically change by virtue of your separation. If you have current Estate Planning documents in place, it is likely that your spouse is nominated as the primary beneficiary of your Estate. Only a final Divorce Order has the effect of revoking the parts in a Will that name a former spouse. Otherwise these documents continue to operate as written regardless of a separation. It’s important to remember that this includes a Binding Death Benefit Nomination (directing the payment of your superannuation to certain beneficiaries in the event of your death), Life Insurance and other insurance policies.
Further, a Power of Attorney will continue to allow your former partner (where they are appointed) to manage your financial affairs during your life time and potentially when you still have mental capacity to make these decisions yourself. For instance, an individual with a Power of Attorney that names their former spouse to manage their financial affairs immediately on the signing of these documents will empower that former spouse to, for example, go to the bank and empty your bank accounts without your knowledge, even where you are separated.
You may also own property, including Real Estate, as ‘joint tenants’ with your former partner. The effect of ownership of property in this way means that should one (1) of you die, the surviving joint tenant automatically inherits the deceased joint tenant’s share of the property. This may not be your intention post separation but can be quickly and simply remedied by signing new documents.
If you do not have a Will, Power of Attorney, Appointment of Enduring Guardian and/or Binding Death Benefit Nomination, there are laws in place which will direct the management of your affairs if you are incapacitated, or direct that certain people are to inherit your property. This may not be in accordance with your wishes. It is, therefore, essential that you consider these matters and get your documents organised and signed to ensure that your affairs are looked after in accordance with your wishes in the event of unforeseen misfortune.
At Delaney Roberts Family Lawyers, our Family Estate Planning Team can help you to effectively set up your Estate Planning documents to protect your wealth from
unintended claims. Our Estate Planning documents are available at a reasonable fixed fee and can be prepared as a matter of urgency.