Family Law Property Settlements – Is your personal injury or compensation claim safe?

09/03/2018

The Family Court can make Orders in a property settlement case where the pool of assets available for division includes money that was awarded in damages to one or other of the parties to the marriage because they suffered a personal injury. It might be presumed that the Family Court would not touch compensation moneys received by a person as a result of an injury that they had suffered.  Why would the Court take away my compensation money?  The reality is that the Court can look at whether the compensation can be divided.

The answer as to whether or not the compensation payout/damages awarded to you is safe from the other party and the Family Court or how the Family Court will decide whether it is or not, is a complicated question.

The Family Court will look at and can deal with the proceeds of the damages award and effectively give some of that compensation money to the other party.

The Family Court of Australia was recently asked to decide whether or not a post separation personal injury award of over $1,000,000 to the husband (paid to him after separation because he was severely injured) should remain his or whether it should be divided along with other property between the husband and the wife.  The money was paid because of the husband’s injury and not because of anything the wife had done.

The Court adopted the usual approach of looking at the financial and non-financial contributions made by the husband and wife during the course of the marriage.  Looking at the contributions only the husband had made most contributions and had been the reason for payment of the personal injury compensation moneys.  Conversely the wife was not working and had the care of the children of the marriage including a child with special needs.

The Court looked at all the subjective factors of the case and notwithstanding the husband’s overwhelming contributions and this included his personal injury compensation award, made an order that the property including the damages awarded to the husband be divided so that effectively the wife received a proportion of the husband’s personal injury award.

In conducting this type of matter great care needs to be given to identification of contributions and identification of the competing long term and ongoing needs of each party.

If you have suffered an injury and have received a compensation payout and are concerned this may form part of the asset pool of the property settlement with your spouse or partner, please do not hesitate to contact Richard Watson Family Law Solicitor or his assistant Shereen Da Gloria to discuss your concerns or queries.  What you think is fair is not always the case.  The Court may take a different view when it comes to personal injury/compensation payouts in property settlements.

This is only a preliminary view and is not to be taken as legal advice without first contacting Watson & Watson Solicitors on 02 9221 6011.

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