It is inevitable that when a couple decide to become parents, work arrangements and routines need to be adjusted to meet the care needs of their new child or children.
The Human Rights Commission recently identified that women aged 55 and over make up the fastest growing cohort of homeless Australians, increasing by 31% between 2011 and 2016. It is suggested that the significant gap in wealth accumulation between men and women across their lifetimes may be a contributing factor to this. Of course, either party to a relationship who take on the role of primary homemaker and parent during a relationship may find it more difficult to accumulate wealth than their income-earning partner.
Homemaking and parenting contributions are not overlooked by the Family Court of Western Australia when considering whether Orders should be made for property division between spouses or de-facto partners when they separate. The Court will consider both the contributions made in that role and how it may affect your ability to generate income in the future.
For example, the Family Law Act 1975 (Cth) provides the Court should take into account “the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent.”. This consideration also applies to de-facto relationships under the Family Court Act 1997 (WA).
The Court can face a difficult task when determining adjustments of property that should be made due to a party’s homemaking and parenting contributions. There is no mathematical equation that the Court can adopt. In the Marriage Ferraro the Full Court discussed the difficulty of comparing the contributions of the breadwinner and homemaker and likened this to comparing apples and oranges. However, it was established that homemaking and parenting contributions “are to be given real and not token weight”.
The Full Court in Wardman and Hudson considered that the party who takes on these responsibilities frees up the other party to earn income and accrue superannuation. In Clauson, the Full Court made the point that a party who takes on the role of homemaker and parent and will continue to be the carer of the children after separation, is not adequately compensated for their loss of career opportunity, lack of employment mobility and restrictions on their independent lifestyle, even if paid child support.
Factors that may influence the primary homemaker and parent’s property settlement include the size of the asset pool, the length of the marriage, the parties’ respective future earning capacity and the arrangements for any children post separation.
The following case summaries provide some examples of how the Court has considered adjustments on account of a party’s homemaking and parenting contribution (and inferior financial position on account of that role):
- In Clauson, the decision of a trial judge to award a wife 40% of the property pool was overturned by the Full Court. The marriage had lasted nine years and involved a property pool of $1,400,000. There were four children of the marriage aged between 3 and 8 and the wife’s earning capacity had been restricted whilst she took on the role of homemaker and parent. The wife had been employed in the racing industry before the parties had children and it was expected that she may be able to use her skills to re-enter the workforce in the future. The husband had an earning capacity that was between $200,000 and $220,000 each year. The Full Court decided instead to award the wife approximately 50% of the property pool.
- In Mitchell, the property pool was only $301,200. The husband was a barrister and earned $300,000 each year before tax deductions. The wife had worked in nursing homes, but had not worked in that profession for many years. The children were adults. The wife was awarded 90% of the asset pool.
- In Jabour & Jabour, the marriage lasted around twenty-seven years. The only significant asset of the marriage was a block of land that had initially been owned by the husband with a co-owner. The husband purchased the co-owner’s share during the marriage such that only he had a registered interest in the land. The block of land suddenly increased in value to $10,000,000 around twenty-two years into the marriage due to re-zoning. The trial judge initially awarded the husband 66% of the asset pool. This decision was subsequently overturned by the Full Court, finding that the block of land ought to have been treated as one of the myriad of contributions made during the marriage. The Full Court instead distributed 47% of the property pool to the wife and 53% of the pool to the husband.
Homemaking and parenting contributions are treated as part of the various contributions made during a relationship and the Court is required, pursuant to the Family Law Act 1975 (Cth), to give these contributions real weight. The Court will also consider how that role affects that parties financial position going forward. The monetary value of those contributions differs on a case-by-case basis depending on a number of factors.
If you or anyone you know is interested in learning more about the range of entitlements that may be available to a parent and homemaker, come and see one of our lawyers at Carr & Co.