February 2021

Economic Disparity

 

These days we know that relationships come in all shapes and sizes however we still see many situations where one partner’s career is prioritised over the other’s. This happens for a variety of reasons but the most common is because one takes on a more active parenting role. This allows the other partner to work longer hours, travel for work, and generally put more time into their career than they would otherwise be able to if they didn’t have this support. As a result, when the relationship ends that partner is likely to have flourished in their career at the expense of the other.

This may result in a significant difference in the earning power and income of each partner which the law treats as economic disparity. In certain circumstances the Family Court may make an adjustment in relation to the parties’ relationship property to redress this.

A claim in relation to economic disparity will only be successful if the income and living standards of one partner is likely to be significantly higher than the other as a direct result of the division of functions in the relationship.

When considering if this applies the Court considers:

·         The likely earning capacity of each partner;

·         The responsibilities of each partner during the relationship, particularly in relation to care of dependents; and

·         Any other relevant circumstances.

Determining whether you have a claim for economic disparity requires an in depth look at the financial and non-financial contributions each partner has made during the relationship. You also need to consider the total relationship property pool of assets. What may be considered a significant difference in income for one couple may not necessarily be significant for another. This can be a time consuming process but it may result in you obtaining a larger share of your relationship property which will be a better foundation for starting the next chapter of your life.

Economic disparity is just one of the ways which the Court can address the specific circumstances of your relationship when determining how to divide your property. It is important to obtain legal advice prior to entering into settlement negotiations on separation or a contracting out agreement for a new relationship so you are aware of all of your options.