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The effects of unemployment during a breakdown in a relationship

It can be a daunting thought to commence the separation process if you are unemployed and worried about not having the financial capacity to be alone.  Also, your partner may tell you that you are not entitled to any of “their” assets and the cost of legal fees is a barrier to fight it out in Court. Is this really all true? Parties in a de facto relationship or marriage have the right to a property division and spousal maintenance.

Depending on the length of your relationship among other factors, if you are unemployed during the relationship but care for children and/or look after the home whilst your partner works, your entitlement to the assets may be equal if not more than your partner who works full-time.

The Family Law Act considers a whole series of factors when assessing a party’s property entitlements and one of them is each party’s capacity to work and earn an income.

Pursuant to section 75(2) (or section 90SF(3) for de facto), the Court must consider the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment.  If there is a significant income earning disparity, this can be highly relevant not only for a property division, but also any application for spousal maintenance which is a periodic or lump sum payment from one party to the other to assist in day to day living expenses.

What is important to note is that the Court considers a party’s income earning capacity.  It is a common misconception that if a party stops working, after separation, that this may impact the overall outcome of a property division and/or potential spousal maintenance claim.  Depending on the circumstances, if a party voluntarily stops working and it is clear they have the capacity to work and earn an income to support the other party, the Court may still assess that party as having an income earning capacity higher than the other party and Orders may flow from that assessment.

This is very different to someone who has never worked during the relationship and/or has a very low-income earning capacity, or if a party does not work to care for children.  The Court provides careful consideration to parties in this financial position to ensure that the overall property division, and any orders for spousal maintenance, are appropriate and can address any financial stress that that party may be encountering.

What if you do not know what your partner earns?  Each party is required to provide full financial disclosure which includes providing tax returns and pay slips.  Financial disclosure is part of the process and can be court ordered if required.

What if, because of my unemployment, I do not have any of my own money to take any action?  If you have assets such as real estate, shares, or if there are savings accounts in your parent’s name, it may be possible to have access to these assets to pay for your legal fees.  The Family Law Courts can make Orders to ensure that parties who are unable to meet their legal fees can do so through the assets of the relationship or can even make costs orders requiring the other party to pay your legal fees.

Speak to Lewis Family Lawyers about your options as we can give you preliminary advice in the very first consultation so that you know whether there is any merit in seeking a property division or spousal maintenance claim.

Memberships and Associations

Lewis Family Lawyers

Sydney Office

Level 30, 133 Castlereagh Street
Sydney NSW 2000
Phone: (02) 9159 9049
Mobile: 0438 800 996

Bowral Office

Suite 2B, 11-13 Bundaroo Street
Bowral NSW 2576
Phone: 02 4263 9011

Email: info@lewisfamilylawyers.com.au

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Sydney Office

Level 30, 133 Castlereagh Street
Sydney NSW 2000
Phone: (02) 9159 9049
Mobile: 0438 800 996

Bowral Office

Suite 2B, 11-13 Bundaroo Street
Bowral NSW 2576
Phone: 02 4263 9011

Email: info@lewisfamilylawyers.com.au