What's happening with 'special contributions' in family law?

Published 21 Aug 2017

There has long been debate in the Australian family court over the legality and fairness of the 'special contributions' allowance. This legal loophole occurs in divorce proceedings where one of the spouses' contribution to the marriage is valued more highly than the other's - such a situation has occurred in a number of landmark cases over the past few decades. 

Judging by recent ones, however, married couples might now be on equal grounds in case of divorce, regardless of who contributed most to the relationship financially. Let's outline what 'special contributions' has historically meant in Australian family law and look at where it might be headed in the future.

Definition of special contributions in family law

Though it isn't technically a legal term, the idea of special contributions has existed since 1984 in the case of Mallet & Mallet. The premise of this legal concept is that one party from a marriage could be considered to have contributed more (financially) than the other and therefore deserves a greater share of the estate.

As you might expect, this practice tends to favour wealthy males over their wives in many cases - it's therefore been a topic of controversy in recent years. Because the idea of a 'special contribution' isn't a legally outlined concept, there hasn't been a real precedent up to this point; each decision is reached individually based on the information at hand.

However, a recent case may have set a precedent that disregards the notion of financial contributions being more important than familial contributions.

What's happening going forward?

In the case of Smith & Fields, the court first ruled that the husband would receive 60 per cent of the marital pool due to his exemplary running of the family business. The wife was also a director and shareholder of the business, though she was first and foremost a full-time mother to the couple's three children.

Claiming that it is unjust to value the husband's contributions more than her own, the wife appealed the decision. The appeals court overturned the decision, ruling instead that the assets be split equally between the two parties. Though this doesn't mean that special contributions will be completely invalid going forward - it shows that having provided financially for the family is no longer enough to justify an unfair split of assets.

If you are going through a divorce and would like advice regarding the division of assets, separation agreements or any other step of the process, please reach out to a Parramatta family lawyer at Malouf Solicitors today.

Please call us on 02 8833 2000 to speak with a lawyer

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