One of the steps the Court takes when determining property settlement matters is to consider the factors set out in section 75(2) of the Family Law Act (for married couples) or section 90SF (for de facto couples).These are often described as the "future needs factors", and their calculation is not an exact science as you'll see below.
Sometimes parties with the primary care of the child/children ask for a 20% adjustment in their favour under this section.
However, there is no automatic presumption that they will receive a 20% adjustment and certainly no percentage adjustment mandated by the Court.
Each case is decided on its own merit.
We have considered some of the judgements of 2015 and summarised them, as follows, insofar as they relate to future needs (note these cases have not been heard on appeal should an appeal be pending):
|Total pool||Children||Factors taken into consideration||Adjusttment|
|Huntley & Freeman per Newbrun J||60 (husband) and 65 (wife)||20 years||Approximately $2 million||None||1. Husband had $450,000
2. Wife would receive superior income due to retention of capital assets
3. Parties had otherwise modest average incomes
|Daniels & Daniels per Coker J||51 (husband) and unknown (wife)||22 years||Approximately $890,000||N/A - adult||1. Husband had greater capacity
to earn income (having access to drawings of approximately
$176,000, whereas wife only recently commenced working part time
and had limited involvement in workforce for period prior)
2. However, husband had health issues that may impact future employability
3. Adult child of marriage lived with the wife, but court did not find this shoudl be given consideration
|2.5% in favour to wife|
|Booth & Booth per Benjamin J||51 (husband) and 48 (wife)||20 years||Approximately $670,000||3 (2 were adults with special needs, 1 was 17)||1. Parties had similar earning
capacities although the husband had perhaps a little less
2. Wife had care for two children with special needs and court was satisfied that she had some obligation to support them into their adult years
|3% in favour of wife|
|Ortona and Peters per Thornton J||42 (husband) and 44 (wife)||10 years||Approximately
||2 children aged 10 and 11||1. Husband's capacity for
employment was greater than the wife (husband earned $86,000 and
wife relid on Centrelink income and had not been in paid employment
for about 12 years)
2. However, the husband had majority of responsibility for care and fianncial support of children
5% in favour of wife
|Maddison and Maddison per Lapthorne J||54 (husband) and 43 (wife)||14 - 15 years||Approximately $450,000||3 children aged 11, 12 and 17 primarily living with the mother on a 10:4 fortnight arrangement||1. The husband was in a position
over time to earn greater income than the wife (court was satisfied
that the wife had a condition that reduced her ability to work full
2. The wife had and would continue to have primary care of the children and the husband provided limited financial support.
|10% in favour of wife|
|Corbon & Klousner per Thornton J||47 (husband) and 45 (wife)||14 years||Approximately $1.8 million||2 children aged 8 and 12 primarily living with the mother on a 9:5/fortnight arrangement||1. There was a disparity of
income in favour of the husband which was likely to continue (the
husband earned arppoximately $560,000 and the wife $125,000)
2. The husband paid child support as assessed and all school fees
3. The wife would have a greater responsibility for care of the children (although the husband had greater financial responsibility for them)
|15% in favour of the wife|
|Marino & Salvai per Burchardt J||42 (husband) and 45 (wife)||16 years||$241,000||2 children aged 4 and 7 living with mother||1. There was a disaprity of
income in favour of the husband (who earned in excess of $60,000
per year whereas the mother was on Centrelink
benefits and had doubtful future earning capacity)
2. The mother had the full time care and expense of the children - the court feared the father would not pay child support in the future.
|20% adjustment in favour of the wife|
|Lane and Lane per Brown j||45 (husband) and 42 (wife)||16 years||Approximately $820,000||2 children aged 8 and 15 (8 year old with the wife and 15 year old with the husband)||1. Husband had a greater earning capacity (earning in excess of $500,000 per annum whereas the wife was still in training in a position which was likely to result in a low rate of pay)||30% in favour of the wife|
Every matter is different and none of the scenarios listed above will necessarily apply to your situation. It is interesting to consider however that:
- Any assessment of future needs is by nature an imprecise exercise.There is some "crystal ball gazing", as it were, given that no one can predict the future and therefore no one can accurately predict what future needs will be.
- While one party may predominantly have the continuing care of the children this may be balanced in part by child support payments and an ongoing involvement in the care of the children.
- Considering both parties' income earning capacity is important when determining property settlement matters. It is likely that a party will obtain an adjustment in his or her favour if over time it appears that the other party has the capacity to earn substantially more. This however does not merely take into account what both parties are currently earning or their current circumstances but their capacity to earn an income in the future.
- Health issues are relevant only to the extent that they impact on a party's future employability or future expenses. Merely stating that one of the parties has a health issue will not be sufficient for that party to obtain an adjustment.
For the purposes of this exercise we have only considered sections of these judgements dealing with future needs. It is however important to remember that when making a determination, judges do not consider future needs factors in isolation. The outcome at the end of the day must also reflect what is just and equitable in all the circumstances.
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