Couples may share income after a split

If changes agreed, the family home may no longer be divided 50-50

Couples may keep sharing their income for five years after a break-up under proposals being considered by the Government. And the wealth which each person brings into a relationship, including the family home, will no longer be automatically split down the middle if the proposals go ahead.

The changes were recommended by the Law Commission after its review of relationship property laws concluded that they had not kept up with social changes over the past four decades. They have been applauded by experts who say they will make the division of property fairer and will place greater priority on children following a separation.

In a report presented to Government, the commission said the general rule of a 50-50 split of property following a break-up should remain. But it recommended major changes to address the inequalities which had arisen.

“These recommendations are designed to make the law more responsive to the wide range of different family situations that exist today,” said the commission’s deputy president, Helen McQueen.

The Law Commission wants couples to be able to share their income for a period after a divorce or break-up if one has stopped working to raise a family.

“There is a strong feeling that if a person has given up their career to look after children and done the support role in a relationship, they

should get some recompense for that,” said former law professor Mark Henaghan, who specialised in family law.

He said that for many people, income was their biggest asset. Only getting half of the house after a break-up did not make up for their loss of earnings, he said.

The commission recommended the introduction of Family Income Sharing Arrangements (FISAs), which would be available to couples who had been together for 10 years or more.

The amount of shared income after a separation would be calculated based on the couples’ combined average income in the three years before their break-up. It would be paid up to a maximum of five years, depending on how long the couple had been together.

Under the existing rules, a family

home is treated as relationship property and is divided equally, regardless of when or how it was acquired. The commission has recommended that if the home was owned by one partner before the relationship began or was inherited, only the increase in the value of the home should be shared.

Divorce lawyer Jeremy Sutton said this reflected the fact that life in New Zealand had changed since the 1970s.

“We now tend to live longer, our partnerships are shorter, and many of us have more than one significant partnership during our lifetime, often forming them later in life.

“This means wealth is being brought into many relationships, rather than partners marrying early and creating wealth while they are together.”

Another key proposal was to give the Family Court greater powers to divide up trust property. Henaghan applauded this move, saying that trusts had become “a national pastime” in New Zealand.

“We have more trusts in this country than any other in the world, and most other countries recognise property in trusts as relationship property.

“But in New Zealand you can’t get your hands on it, which means some people have ended up with very little, even though there’s a lot in a trust.”

Justice Minister Andrew Little said he is now considering the commission’s 140 recommendations.

Wealth is being brought into many relationships, rather than partners marrying early and creating wealth while they are together. Divorce lawyer Jeremy Sutton