Parental Contributions

One of the key factors in a family law property settlement is the assessment of each party’s “contributions”. Broadly stated, the more a person contributed to the assets of the relationship, the more they may be entitled to receive from a property settlement. However, as the Family Law Act 1975 established, these contributions can be either financial or non-financial in nature. The most common non-financial contribution is the performance of parental duties: that is, the time, effort and resources that a parent dedicates to raising their children. The courts recognise that raising children can significantly hamper a parent’s ability to contribute financially to the marital estate, and that there needs to be an equitable assessment of contributions. This article explains the nature of parental contributions, and how they are treated in property settlements.

Financial and non-financial contributions

When the courts are tasked with dividing the property of separating couples, it is with the intent of achieving a just and equitable outcome. The Federal Circuit and Family Court of Australia and the Family Court of Western Australia use a 5 step test that includes an assessment of financial and non-financial contributions made by each party in the relationship. There is specific provision under the Family Law Act to consider the contributions of married and de facto partners to the:

• acquisition, holding and improvement of property (financial and non-financial) and
• welfare of their family, including parenting efforts.

Parental (or domestic) contributions refer not only to the time spent directly attending to the physical, educational and emotional needs of the children. Contributions to the welfare of the family also include all of the domestic and emotional labour that is involved in the running of a household. The court holds that one spouse doing most of the work to provide a stable home environment is an important contribution to enable the other spouse to pursue economic participation that provide financial contributions. Certainly, taking on most of the active parenting allows the other parent to more easily earn an income or manage assets. Including domestic contributions in an assessment of contributions is important because it recognises that one spouse may have made career sacrifices, earnt less or even no income, and lost the ability to acquire assets such as superannuation, in the pursuit of commonly shared goals. When the intent is a fair and equitable outcome, it would be unconscionable not to recognise this sacrifice.

As such, the court acknowledges that parenting is an essential non-financial contribution to the overall welfare of the family. During a property settlement, the court will evaluate the time and effort that each party contributed to the family, especially when one parent has taken the primary caregiving role. When one party has provided more domestic and parental contributions, this is often balanced against the financial contributions of the other parent, essentially cancelling each other out and making the former couple equal in terms of contributions. For example, in cases when one parent is the primary income earner while the other parent stayed at home to care for the children, the caregiving parent’s non-financial contributions are given significant weight. In those circumstances, the court considers the contributions of the caregiver parent directly enables the income-earning parent to focus on their career, directly benefiting the family.

Parental contributions often have a long-term effect on that person’s financial position, limiting their ability to engage in paid work, accrue superannuation, progress their career and improve their earning capacity. Property settlements usually acknowledge that the caregiving parent should not unfairly bear these financial sacrifices after separation. When examining parenting contributions, the courts are not concerned with the “quality” of the parenting, but rather whether someone took on that role, thereby allowing the other person to devote their time elsewhere. A significant factor is whether these duties were a full or part time concern for the parent, and whether they had significant help, such as from a nanny, aur pair or extended family. In some cases, one party will have worked full-time to meet the family’s expenses, while also performing most of the parenting duties. In that instance, the court may determine that they contributed more to the property pool than their spouse.

The case of Kennon v Kennon (1997) introduced the concept of assessing contributions in light of the broader relationship, including in the context of family violence. In that case, the court acknowledged that family violence could influence a property settlement outcome, as long as there was an established history of violent conduct, that had a discernible impact on the victim, and that made the victim’s contributions to the relationship significantly more arduous.

Future needs

One of the steps in a property settlement proceeding is the evaluation of future needs of each party. Parental contributions are an essential aspect of this step, as one parent is often going to assume greater caregiving responsibility for minor children in the future. The parent who takes most of the day-to-day parental responsibility may require additional financial support to maintain a stable home environment. As the courts focus on the best interests of the child, there may be a significant adjustment to the settlement to enable the main caregiver to continue to make these parental contributions.

Contact Go To Court Lawyers if you have questions about how your parental contributions will be assessed in your property settlement. Phone 1300 636 846 today for experienced and friendly assistance.