What Does the Court Consider When Deciding a Financial Settlement?

There is no standard calculation that determines how finances will be divided following divorce.

The court must consider all the circumstances of the case. Its first consideration is the welfare of any child of the family under the age of 18. It must then examine a range of statutory factors before deciding what outcome is fair.

Income and financial resources

The court considers the income, earning capacity, property and other financial resources available to each person.

This can include:

• Employment and self-employment income

• Property

• Savings and investments

• Pensions

• Business interests

• Benefits

• Other present or foreseeable financial resources

The court may consider not only what each person currently earns, but what they could reasonably be expected to earn in the future.

Financial needs and responsibilities

The court will assess the present and future financial needs, obligations and responsibilities of each person.

Housing is often a central issue, particularly where suitable homes must be provided for children. The court may also consider household expenses, debts, caring responsibilities and each person’s ability to meet their own needs.

The circumstances of the marriage

Other factors include:

• The standard of living enjoyed during the marriage

• The ages of the parties

• The length of the marriage

• Any physical or mental disability

• Contributions to the welfare of the family

• Benefits that may be lost as a result of divorce, including pension benefits

Contributions are not limited to income. Caring for children, maintaining the home and supporting the family are also relevant contributions.

In exceptional cases, the court may consider conduct, although ordinary disagreements or the reasons the marriage ended will not usually affect the financial settlement.

The court weighs these factors together. No single consideration automatically determines the outcome.

The next part of this series looks at how property and other assets may be divided.

Elizabeth Stocker can review your financial circumstances, explain how the relevant factors may apply and help you assess whether proposed settlement terms are fair and workable. Book an appointment with Elizabeth or complete the enquiry form.