Sidelined partners cashing in
Women who put their careers on hold to raise children or support their partner’s career are getting bigger payouts when they separate.
Changes to property laws in 2002 allow men and women to sue estranged partners for lost earning potential as a result of being in a relationship. So far most payments have been made to women.
Payouts are lumped on top of the 50-50 split of property and child maintenance responsibilities.
Law Society family law section chairman Simon Maude said that when changes to the act came into effect, courts conservative with compensation amounts.
That changed last July when a man was ordered to pay $142,000 to his ex-wife. The court recognised the woman’s 20-year career break while raising their two children.
Maude believes the $142,000 will be exceeded in future awards. He said compensation was not only awarded in cases when a partner had made sacrifices to raise children, but when couples decided on a lifestyle that would reduce the income of one partner in a relationship.
Canterbury University senior law lecturer John Caldwell said a huge number of cases were going through Family Court, and courts were struggling to determine compensation figures to reflect what was lost.
Claims were dealt with on case-by-case because there was no range of set tariffs for a court to refer to when awarding a payout.
Caldwell said some men had used the new law to seek compensation after giving up their career to become househusbands.
Maude said the law change also affected how trusts or companies were treated when a relationship ended. Before the law change, it was difficult for a partner to gain equity when assets were transferred into a trust or company structure by the other partner.
He said some lawyers were now trying to have courts determine that any interest in a trust should be classified as property, which would make it easier for an estranged partner to seek compensation.