Redundancy Payment Family Law

A redundancy payment in family law is generally property and therefore can be included in a family law property
settlement. In the case of Burke (1993) FLC 92-356 the Court stated that a “redundancy payment is capable of being regarded as a contingent right…………………For the purposes of s.79 of the Family Law Act, that contingent right is therefore an accruing potential financial resource of the employee party which is transposed  into property where the conditions for its payment arises.”

“That is, until an offer of redundancy is accepted, no chose-in-action arises and the entitlement is not property of the parties within the meaning of s79.”

In essence, this means that a redundancy  is not property until it is accepted. Once the offer of redundancy is accepted, it is property capable of being divided in a family law property settlement.

The Court has power under the Family Law Act 1975 (Cth) to alter a party’s interest in property even where it was acquired after separation.  This will generally include a redundancy payment received after separation. contact our  experienced Brisbane Family Lawyers or our North Brisbane family lawyers. We can assist you in all areas of family law, including regards family law property settlement, maintenance claims and parenting arrangements. We will advise you regards likely outcomes for your particular circumstances. This will allow you to make an informed decision and to retain control over how your family law issue is resolved. You are also welcome to read on for further information right now………

Redundancy Payment Family Law – received after Separation

In most cases, a redundancy payment in family law received after separation will be treated as property to be divided between
the parties where a family law property settlement has not yet been finalised.

In I & I [2004] FMCAfam 203, the Court included a redundancy payment in the property to be divided even where
the payment was received years after the parties’ separation. The wife had contributed over many years caring for the parties’ children and undertaking home duties, including after separation. The wife’s contributions had put the husband in a position such that he could focus on his career development and employment.

The Court therefore determined that the wife had contributed to the ability of the husband to obtain the redundancy so that
it was included in the property available to be divided between the parties.

In the more recent case of Trask & Westlake [2015] FamCAFC 160, the Full Court of the Family Court held that a wife had contributed to a redundancy payment received by the husband after separation even where the employment which led to the redundancy had commenced after separation.

In that case, the parties had lived together for 13 years and been married for 11 years. At the time of separation, their four children were all under 18 years of age. The trial judge made orders for family law property settlement some four years after the parties had separated.

The trial judge assessed contributions by delineating between the parties’ contributions prior to separation and those made in the post-separation period.

Assessment of post separation contributions including redundancy payment

The Full Court in Trask noted that,

The parties “conducted their relationship on the basis that the husband would pursue his career and the wife
would be the homemaker and primary carer of the children” (at [83]). The trial judge found that (at [79]):

… the husband frequently took new positions to advance his career and to increase the family’s income. These new positions
often required the family to relocate, both within Australia and internationally. The wife therefore frequently moved residences and countries with small children to enable the husband to take up these new employment opportunities”.

The Full Court found that the trial judge was not in error in assessing that the parties’ post-separation contributions were equal (and, thus, that they were equal overall).  The Full Court noted the trial judge’s finding that,  “The wife’s significant indirect financial contributions and contribution to the welfare of the children were a “direct non-financial contribution to the husband’s ability to be employed (ultimately) by Company E and its associated benefits” and, in that respect, her contributions were a continuation of the roles that the parties had each undertaken in this particular marriage while it subsisted”.

The contribution of homemaker and parent did not cease upon separation.

The husband had been able to obtain the employment with Company E not only because of his talents, dedication and hard work but also as a result of the contributions made by the wife over the years leading up to that employment.

In that case, the wife had continued to be primarily responsible for care of the children, leaving the husband free to pursue his career with company E and ultimately obtain the redundancy payment.

Will payments made on a redundancy always be included in property to be divided?

The answer is no. There are circumstances where they will not be included, for example, if the payment includes a component for loss of future earnings and/or the loss of benefits such as sick leave and holiday pay. Those payments were determined in the case of Zimin & Nickson [2014] FCCA 206 as being not referable to the marriage. Hence the payment in that
case was not included as property to be divided between the parties.

Contact our family lawyers Brisbane or family lawyers Brisbane Northside for advice concerning your family law issues, whether regards redundancy payment family law or any other area of family law.  Our goal is to assist our clients to reach an amicable agreement with their former partner without the need to go to Court. If however court action becomes necessary, we have the experience to represent you at Court.

The information set out in this blog is not a substitute for legal advice. We recommend that you obtain advice tailored to your particular circumstances from our family lawyers Brisbane or our family lawyers Brisbane Northside.