Assessing the Parties’ Contributions
Sections 79(4) and 90SM(4) of the Family Law Act (FLA) sets out 7 considerations that a court must take into account in considering what orders to make, if any. Each of these considerations can placed into one of two categories:
- Contributions to either property or the welfare of the family; and
- The parties’ present and future economic circumstances.
This section is concerned with the first category of consideration and how it relates to the court’s assessment of the parties’ contribution based entitlement.
Financial Contributions to Property: s 79(4)(a)
The court is required to take into account all financial contributions that the parties made to property belonging to either or both parties. Such contributions may be direct or indirect, and they may relate to the acquisition, conservation or improvement of property.
Direct financial contributions to the acquisition of property are financial contributions to the purchase of an asset. A common example of a direct financial contribution is the payment of the deposit on the matrimonial home.
Direct financial contributions to the conservation or improvement of property are generally contributions that preserve the capital value of an asset. This might consist in performing maintenance works on the matrimonial home or some other asset, such as a motor vehicle, or payments on an interest only mortgage.
Indirect financial contributions to the acquisition, conservation or improvement of property are financial contributions from one party that enable the other party to make direct financial contributions to the either the acquisition or conservation/improvement of property. The provision of free accommodation enabling the other party to save money for deposit on a home is an example of an indirect financial contribution to the acquisition of property. An arrangement between the parties whereby one party pays for all household expenses whereas the other party services an interest only loan secured over the family home may be characterised as an indirect financial contribution to the conservation/improvement of property.
Non-Financial Contributions to Property: s 79(4)(b)
Direct and indirect non-financial contributions to property are identical to their financial counterparts, save to the extent that they are non-financial in nature. This is reflected by the fact that s 79(4)(b) and s 79(4)(a) are almost identically worded.
An example of a direct non-financial contribution to property is home renovations. An indirect non-financial contribution to property might consist in a party effectively managing the family’s finances.
Contributions to the Welfare of the Family: s 79(4)(c)
Section 79(4)(c) requires the court to take account of each party’s contributions to the welfare of the family. The main purpose of this section is to ensure that the court accords due weight to the parties’ respective contributions as a homemaker or a parent. Such contributions include cooking for the family, caring for the children and other domestic activities.
Although the paradigmatic examples of contributions to the welfare of the family are domestic activities, the court is not limited to considering such activities when assessing the parties’ contributions under s 79(4)(c). It may also take account of financial contributions to the welfare of the family. For example, a court may regard a party who applies all of their income to family related expenses may be regarded as having made a financial contribution to the welfare of the family.