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Redundancy Payments in Family Law Property Matters

Family Law

Under the Family Law Act the Court has the power to alter a party’s interest in their property regardless of when or how it was acquired and in whose name it is owned.

For the purposes of the Family Law Act what then is property? Does it include a redundancy pay?

Income is not property and therefore cannot be the subject of a property order (other than spousal support/child support).  If income is not property, what about redundancy pay?

A redundancy payment is defined as property and therefore capable of being the subject of a property settlement.

In the 1993 decision of Burke v. Burke the Family Court held that a non employee spouse may have contributed to the redundancy during the marriage.

Consequently, if one party received a redundancy payment during the relationship then we need to identify when they started their employment and for over what period of time they worked for that employer whilst in the marriage/defacto relationship.

Consequently if they had worked with that employer for 30 years but only five of which were during their relationship then the non employee spouse’s contributions are limited by that length of their relationship.

What if the redundancy is received after separation?  Could it still be included as property? What sort of contributions does the court consider a non employee spouse could make?

Westlake v. Trask is a decision made by the Family Court of Appeal in 2013.  It is an interesting case.  Briefly, the facts are that the parties had a relatively long marriage and at separation there were children under 18 years of age who primarily lived with the wife.

Throughout the marriage the husband worked in the finance industry. The parties had moved throughout Australia as well as to the United States and Great Britain in order for him to pursue various career opportunities.  Whilst the wife had a university degree, the care of the children and relocating to support her husband’s career interfered with her own career path.  At the time of the hearing the wife had not worked in paid employment for some time.

After the parties separated, the husband took up new employment with “company E”.  Also, subsequent to separation he received a redundancy payout from company E.

It was held in this case that the husband was able to obtain the lucrative role with company E because of his skills, work experience and qualifications.  The development of those skills, work experience and qualifications had been fully supported by the wife who made indirect contributions towards his career by relocating around Australia and overseas and whilst caring for the children so that he could invest his time in his career.

The wife was held by the Court to have contributed to the husband’s redundancy pay even though it was with a new company and received after separation. It further held that again whilst he pursued his career with company E that he was at liberty to do so given that she continued to be primarily responsible in caring for their children.