Is your ex-wife entitled to your compensation payout?

So you were injured at work during your marriage and were compensated for your loss of income, pain and suffering and likely, because of your employer’s negligence. This is a payment made to you and without any involvement of your spouse, so is your ex-wife is entitled to your compensation payout?

Personal injury awards are financial contributions to a relationship.

In making property orders, the Court is required to take into account the financial contributions made directly and indirectly by or on behalf of a party to the acquisition, conservation or improvement of any property of the parties. This includes assets received by either party during or after the marriage, such as a lump sum payment which is often the case with inheritances.

In the case of Aleksovski v Aleksovski [1996] FamCA, the Full Court of the Family Court was required to consider how a personal injury compensation payment received during a marriage should be treated in the context of a property settlement.

The Trial Judge took the compensation payment into account as a ‘financial contribution’ of the wife pursuant to s79 of the Family Law Act 1975 (Cth) and provided an adjustment in the wife’s favour. On appeal, the Court viewed the compensation payment as a contribution by the party who suffered the injury.

The Court also noted such payments ‘should not be considered in isolation, for the reason that each and every contribution, which each party makes to the relationship, must be weighed and considered at the time’. This means the various contributions of both parties to the relationship made by the injured party and contributions made by the spouse must be considered together when reapportioning the legal and equitable interests of the parties post separation.

In the case of Brazel v Brazel (1984), the Court carried out this exercise, weighing up respective contributions which resulted from the injuries suffered by the husband.  In that case, the parties cohabitated in 1975, married in 1976 and separated in December 1982. During the relationship, each party made various financial and non-financial contributions to the marriage. In 1980, the husband was involved in a road accident and was rendered a paraplegic. He was in hospital for five months and he ultimately received $80,250 by way of a compensation payment. After the incident, the wife made greater contribution to the maintenance and improvement of both their homes which in turn, these contributions were weighed up together with the financial contributions from the husband by way of his compensation payment, when determining a just and equitable outcome between the parties.

In saying that, a compensation payment may be treated differently by the Court depending upon when it comes into existence ie. before separation or between separation and a Court event.

If you are negotiating a property settlement between you and your ex-partner and have any concerns about your financial contributions in your relationship, ensure you get legal advice from our team as no two relationships are the same so the legal advice will be tailored to your specific situation. Give us a call on (03) 9793 7888 or send us an email at reception@justfamilylaw.com.au.