Section 75(2) Factors – What They Mean for You

Section 75(2) Factors – What They Mean for You

If you have been involved in family law matters, then you may be familiar section 75(2) factors. This section of the Family Law Act relates to adjusting a property settlement based on the contributions of the parties. It also considers factors which can “soften” the effect of looking at a property settlement. In this article, we break down what section 75(2) factors are and explain what they mean for you.

What is Section 75(2)?

This section of the Family Law sets out numerous factors that the Court may take into account in deciding how to distribute property in property settlements when determining property and maintenance cases.

What are the Factors?

Section 75(2) of the Family Law Act 1975 (Cth) sets out numerous factors that may be taken into account by the Court in property settlements when determining whether there are any special circumstances that require adjustment to the property settlement amount.

The factors are:

  • The age and state of health of each of the parties
  • Income, property, finances and ability to earn an income.
  • Whether either party has the care or control of a child of the marriage who has not attained the age of 18 years
  • Commitments relating to support of themselves, a dependent or other person.
  • Eligibility for a pension, allowance or benefit.
  • Where the parties have separated or divorced.
  • The extent to which payment of maintenance could enabling further education and therefore increase their earning capacity.
  • The effect of any proposed order on the ability of a creditor of a party to recover a creditor’s debt.
  • The extent to which one party has contributed to the income, earning capacity, property and financial resources of the other party
  • How the length of the marriage affected the earning capacity of the party seeking maintenance
  • The need to protect a party who wishes to continue their role as a parent.
  • Financial circumstances of any current cohabitation by either party
  • Orders made under Section 79 of the Family Law Act, if any. This section regulates how assets are to be divided
  • Any child support that one of the parties is liable for
  • Any fact or circumstance which the court feels needs to be taken into account for reasons of justice
  • The terms of any financial agreement binding on the parties to the marriage

What Do They Mean for You?

If you are going through a separation, it is important to understand what these factors mean for you. These factors are important for the court’s consideration and assessment of what each party’s ‘future needs’ are likely to be. This requires the court to anticipate what each party’s life is likely to look like in the future and award a percentage uplift to the party with the greater ‘need’. As seen above, there are many factors that the court will take into consideration when deciding who gets what portion of the assets. It is therefore important to understand that property settlements can become quite complex.

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If you would like to discuss your family law matter with one of our family lawyers, please contact us on 9963 9800 or at via our contact form.

Understanding Spousal Maintenance Obligations

Understanding Spousal Maintenance Obligations

Did you know that once you enter into a marriage or de facto relationship, in certain circumstances, you or your spouse could be liable to maintain the other in the event their marriage or de facto relationship breaks down? This is called Spousal Maintenance.

This responsibility to financially assist the other is set out in the Family Law Act and exists if that person cannot meet their own reasonable expenses from their personal income or assets.

Where this need exists both parties have an equal duty to support and maintain each other as far as they can and this obligation can continue even after separation and divorce. The extent of the support depends on what the other party can afford to pay and the circumstances of each matter. This article explains this key area of Family Law in detail.

Spousal Maintenance is different to Child Support

Firstly, it is important to know that spousal maintenance is not child support.

Child support is paid for the benefit of children and in addition to that the Family Court can order a party to pay spousal maintenance. The Department of Human Services administers Australia’s Child Support Scheme and works with separated parents to manage their child support responsibilities for the benefit of their children.

What exactly is Spousal Maintenance?

The Family Court can only make an order for one party to pay “spousal maintenance” to the other if the spouse making the application is unable to adequately meet his or her own reasonable needs and the other spouse has the capacity to pay.

Maintenance for a former spouse or de facto partner is the division of future income and/or current capital assets following the breakdown of a marriage or de facto relationship. In certain circumstances, separating couples can have an obligation to provide ongoing financial payments in the form of weekly or lump sum payments by way of maintenance for their former spouse or de facto partner.

This liability to maintain a former spouse or de facto partner can continue until their death or until they have the financial capacity to support themselves. Usually the payment of spousal maintenance is tailored to end upon the occurrence of a specific event, for example, the person receiving maintenance is completing training or re-skilling, securing employment or commencing a new de facto relationship or marriage.

Time Limits

Applications for spousal maintenance for married couples must be made within 12 months of their divorce becoming final whereas applications for de facto partner maintenance must be made within 2 years of the breakdown of the de facto relationship.

It is possible to apply outside the time limits, but the Court does not always grant these late applications.

 What if the person is in a new relationship?

A former spouse is not entitled to spousal maintenance if they marry another person. If you start a new de facto relationship the court will have regard to the financial relationship between that person and their new de facto partner when considering whether the former spouse can support himself or herself adequately.

What does a Court consider when making a Spousal Maintenance Order?

Spousal maintenance is not an automatic right. In deciding a maintenance application, a Court considers the needs of an applicant and the respondent’s capacity to pay including the parties’:

  • Age and health
  • Income, property, and financial resources
  • Ability to work
  • Ability to earn an income as a result of the marriage
  • Suitable standard of living

An example of when a Court will most likely make an order for spousal maintenance is in cases where one party is at home with the care of young children and therefore unable to exercise their income earning capacity.

Other examples could be where one party has been out of the workforce for a significant period of time raising the children and has become de-skilled or unemployable due to age, being unemployed for an extended period of time, or where one party was unable to work due to illness.

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A party’s obligation to pay spousal maintenance may be discharged in various ways including through periodic and regular payments or by way of a lump sum payment. It may also exist for different periods of time.

Although spousal maintenance is generally intended to operate only for a short period of time following separation to enable applicants to get back on their feet, in certain circumstances, it may be appropriate that spousal maintenance be paid for a longer period of time.

The calculation of and assessment for the need of spousal maintenance requires a deep understanding of family law and time limits apply.

If you know someone who needs help and would like to have a confidential discussion please arrange for them to call Etheringtons Solicitors on (02) 9963 9800 or via the contact form here.

Legal consequences of a partner separation

Legal consequences of a partner separation

The Legal Implications of Partner Separation

When a relationship breaks down, there are legal implications to consider that can significantly affect your own financial or mental wellbeing. The legal consequences of a partner separation differ from divorce to de facto relationships, and your living circumstances.

What is the definition of ‘separation’?

‘Separation’ in Family Law is defined as the bringing to an end of a marriage or de facto relationship, which also includes same sex couples. There is no requirement to register a relationship separation under Australian Law. However, separation is a fact which must be proven if it is disputed by the other party at a later time.

In the case of a divorce, the date of separation is recorded on the Application for Divorce and is sworn or affirmed to be true and correct by the Applicant. If you cannot prove you had separated from your spouse at least 12 months before you file your Application for Divorce, the Court will not grant your divorce.

Therefore, it is a good idea to confirm the separation in writing, even if this is via text message or email that can be saved. Often divorce cases and cases for property settlement in de facto relationships can turn upon whether or not a party can prove that separation occurred on a particular date.

What about de facto relationships?

In the case of a de facto relationship, particularly where the relationship ends on or about the two year anniversary, whether or not a property settlement is available can depend on whether the separation took place before or after the two year anniversary. If the de facto relationship was less than two years long the Court may have no jurisdiction under the Family Law Act to provide a property settlement. There may be alternate remedies available or another basis other than the two year requirement to show that a de facto relationship existed.

In addition, there is also a two year limitation period in which to commence the application, from the time of separation. In such cases, again, the date of separation in evidence can be significant.

What about if you still live together?

Separation can take place even though the parties live under the one roof and it can also be a gradual process. In these cases, the Court will need to examine a number of factors to determine when and if a separation has taken place. Those factors can include whether the parties:

  • Slept in separate rooms or together after the alleged date of separation;
  • Performed domestic duties such as cooking and washing for each other after the alleged date of separation;
  • Separated their financial affairs to any extent after the date of separation;
  • 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;
  • Continued to be intimate after the date of alleged separation; and
  • Made it publicly known (such as by telling friends and family), that they had separated.

Ten things to consider if a person has just separated:

  1. Contact your bank or financial institution in writing (in person or email- with your signature appearing) to stop joint funds being removed or liabilities increased.
  2. If you have a Power of Attorney, ensure it is revoked, and have a new one drafted.
  3. Consider whether your nominated death beneficiary for your superannuation entitlements is appropriate.
  4. Photocopy all of your and your ex’s financial documents and put them in a secure location (this should not be at your home or in your motor vehicle).
  5. Look at your Will and consider if it is still what is appropriate and if you do not have a Will have one drafted.
  6. If you have children, contact the Child Support Agency and find out how much is to be paid or is payable for child support and what impact that will have on any pension.
  7. Do title searches on your properties. If your home is not in your name or is in joint names consider placing caveats over the properties. If your property is held as a joint tenant, consider severing the joint tenancy.
  8. If there has been family violence in the relationship you may need to seek a Restraining Order.
  9. Start a diary which keeps track of time your partner has with the children and any adverse behaviour he/she displays.
  10. Seek advice from an experienced Lawyer.

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There are many legal considerations that arise following a relationship breakdown. If you need more information, or if someone you know needs help, please contact Etheringtons Solicitors to speak to one of our experienced solicitors on (02) 9963 9800 or contact us via our form here.

Family Law Property Settlements – debunking the myth of the 50/50 split

Family Law Property Settlements – debunking the myth of the 50/50 split

Following the breakdown of a marriage or de facto relationship, it is required for separated parties to consider how to divide the common property between themselves.

It is crucial to understand each party’s ability to claim entitlements in a property settlement and the assets they are likely to retain.

Family Law is a complicated and emotional area of law which is often poorly understood. This is reflected in a great quantity of inaccurate statements often regarded as fact by those in the community. This blog will debunk several of the property settlement myths and provide you with an understanding of the factors a Court will consider to resolve a property settlement dispute.

The myth of a 50/50 split

Contrary to popular belief, there is no presumption that assets should be divided 50/50, 60/40 or in any other subjective proportion. The Family Court always has full discretion to divide property in a proportion that is just and equitable for both parties.

People often receive ‘advice’ from well-meaning friends or family as a result of their own experiences. However, no two cases are decided the same and there is no presumption of any kind in relation to a financial settlement when it comes to percentage entitlements. Comparing another person’s property settlement outcome to your own can be misleading and can be unhelpful when it creates a false expectation of entitlement.

Each property settlement situation is different and should be carefully assessed by a Family Lawyer qualified to provide you with proper advice.

Factors to be taken into account by the Court

The Family Law Act outlines what factors must be taken into account when the Family Law Courts consider how property is to be divided. There is no universal equation applied to calculate the weight given to each factor. Property settlement is based on all of the information provided and the discretion of the Court in deciding the matter.

To decide how to distribute the assets the Family Court will normally take into account factors including:

  • The current value of the assets and liabilities to establish a ‘net asset pool’. This includes superannuation entitlements, as well as assets held personally, in partnership or by trusts, or companies.
  • The direct financial contributions made by each person to the acquisition of assets or the preservation, improvement or maintenance of those assets, this will include assets owned at the commencement of the relationship.
  • The indirect financial contributions made by each person in the relationship, for example, the giving up of a career to allow the other person to further their own career.
  • The non-financial contributions by each person, like caring for children, being the homemaker and maintaining or improving the assets by personal exertion such as individual efforts in renovations that increase the value of an asset.
  • Identifying the future needs of the parties, for example, age, health, financial resources, superannuation, care of children and income earning capacity.

After considering all of the above factors and others, the Court will consider whether any proposed property settlement is ‘just and equitable’ in the circumstances of the particular case.

The outcome cannot be predicted since no particular factor is given priority over another. Meaning that someone who is the sole income earner will not necessarily be entitled to a greater financial settlement than the other person who was a stay-at-home parent to the children of the relationship.

Summary

It is important to remember that there is no presumption of equality (like a 50/50 split) as a starting point in respect of contributions and that each matter will be decided upon the particular circumstances of that case. The Family Court has broad powers to make Orders for a just and equitable division of assets.

It is important for anyone considering separating from their spouse, or who has already separated, to obtain independent legal advice from an experienced Family Law practitioner about their likely property settlement entitlements.

If you would like advice, guidance or assistance about property settlement entitlements following the breakdown of a marriage or relationship, contact Etheringtons Solicitors on (02) 9963 9800 or contact us via the form here.

Child Custody Rights for Fathers in NSW

Child Custody Rights for Fathers in NSW

Understanding Australian Child Custody Laws

Australian Child Custody Laws recognise that fathers have an important role in the caretaking of children by the creation of an equitable agreement between parents that is first and foremost in the best interests of the child. There is a common misconception that the mother would retain primary custody of children because they are traditionally viewed as more suitable for the role of primary carer. On the other hand, fathers were considered less likely to retain custody because they were considered more likely to be employed and have a better overall earning potential.

In Australia, Child Custody Laws provide the equitable foundations for a fair child custody split between parents, however there may be many equitable reasons as to why an even split is unattainable.

Research from the Australian Institute of Family Studies

The Australian Institute of Family Studies has recently found that approximately half of mothers would prefer to see increased paternal involvement in their children’s lives. In the same study, a majority of fathers also expressed a preference for increased involvement. Interestingly, the fathers cite the following most common factors that prevent such involvement:

  • work commitments;
  • belief that the child’s mother would oppose more involvement; and
  • physical distance/travel costs.

Child Custody Laws

Australian Child Custody Laws have been reformed in this area to make it clear that there are no specific parents’ rights and that there are does not make any legal distinction between fathers and mothers. The Court is instead governed by, and legally obliged to consider, the child’s rights and best interests above all else.

The Family Law Act 1975 (Cth) covers such diverse matters as divorce and separation, parenting arrangements, property settlement and financial maintenance of one party by the other.

With respect to parenting matters, the Act states that a “child has a right to be known and cared for by both parents”, without prioritising either the rights of the father or mother. Unless there are allegations of domestic violence or abuse, the Court would adopt a view that it is in the child’s best interests to spend as much time as reasonably and practically possible with both parents.

How the Family Law Act Applies to Child Custody

When considering parenting arrangements following separation, the Court has to determine who the child will live with and spend time with. Both parents have a responsibility for the care of their children, including their financial support. Despite this, the law does not guarantee an equal-shared parenting arrangement in all matters.

If the Court does not decide that an equal-shared-care regime is in the best interests of the child, the Court will consider allocating substantial or significant time to the non-resident parent. The exception is in a case where there is a history of domestic violence or abuse. In the latter case, the Court will prioritise the child’s safety and wellbeing and make appropriate parenting orders.

Further Considerations for Child Custody Rights for Fathers

In determining what is in the best interests of a child, the Court will consider the wishes of the child, as well as the nature and history of the relationship the child has with each parent. There might be practical difficulties of long-distance parenting and specific emotional or intellectual needs to consider, as well. Communication between both parents and availability of either parent will also be taken into account.

Conclusion

The family law legislation does not enable the Court to take into consideration stereotypical gender roles. Rather, the Court’s decisions are strictly governed by the principle of the children’s best interests. If you have any questions with respect to parenting arrangements of your children, please contact Etheringtons Solicitors for advice on (02) 9963 9800 or contact us via our contact form.

Considerations when Applying for a Divorce

Considerations when Applying for a Divorce

A divorce is legal recognition of the termination of a marriage and a means of ending the legal duties and responsibilities spouses owe to each other. Obtaining a divorce is also the initial step in making future arrangements concerning children, property and spousal maintenance. It is possible for parties to live together and still be separated, however, in most cases it is beneficial for both parties to go through the process of a divorce.

Am I eligible to apply for a divorce?

If there is no reasonable likelihood of the parties reconciling and resuming married life and you and your spouse have lived apart continuously for 12 months, you should consider obtaining a divorce. For example, if you wish to remarry, it will be necessary to obtain a divorce first.

You can apply for a divorce in Australia if either you or your spouse:

  • regard Australia as your home and intend to live in Australia indefinitely, or
  • are an Australian citizen by birth, descent or by grant of Australian citizenship, or
  • ordinarily live in Australia and have done so for 12 months immediately before filing for divorce.

Importantly, the time frame for seeking any property or financial orders in the Family Court is twelve (12) months from the date of the divorce being granted.

Divorce cases where children are involved

If there are any children under the age of eighteen (18), a court can only grant a divorce if it is satisfied that proper arrangements have been made for the children. The Court’s paramount consideration is what is in the child’s best interests. When deciding what is in the child’s best interests, the Family Law Act 1975 requires the Court to take primary and additional considerations into account.

Primary considerations consist of the benefit to a child of having meaningful relationships with both parents and the need to protect a child from physical and/or psychological harm (from being subjected or exposed to abuse, neglect or family violence).

Additional considerations in relation to a parties’ conduct include, but are not limited to, the willingness and ability of each parent to facilitate and encourage a close and continuing relationship between the child and the other parent, each parent’s ability to provide for the child’s needs, the maturity, sex, lifestyle and background of either of the child’s parents and the attitude of each parent to the child and to the responsibilities of parenthood. As a result conduct can matter in parenting cases.

Other considerations

However, the granting of a divorce does not determine the issues relating to property and maintenance or parenting arrangements for your children. If you want to make arrangements about these issues you can:

  • make an agreement with your spouse and file it with a court, or
  • seek orders from a court, when you and your spouse cannot reach an agreement.

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We know that the divorce process can be strenuous for both parties. If you would like more information on how we can assist you with your property settlement matter or any other family law matters, do not hesitate to contact us on 9963 9800 or via the contact form here.