1 Nov 2018

Fifty-fifty split a thing of the past says Law Commission

8:26 pm on 1 November 2018

A couple's assets may no longer be legally split 50-50 after three years together, if new recommendations on property relationship law are accepted.

No caption.

Photo: 123RF

The Law Commission today announced eight proposals to improve the Property Relationships Act, which has not been changed in 42 years.

Commissioner Helen McQueen said New Zealand in 2018 was a very different place from 1976.

"When this law was first made and really the paradigm relationship in the 1970s was probably much more about a couple getting together when they're pretty young, raising children and building wealth together whereas now New Zealanders separate and partner much more commonly.

"What [the change is] about is making sure the law reflects what most New Zealanders would think is now appropriate," she said.

The Act covers married and civil union couples as well as de facto couples who have been together for at least three years, or have been together less than three years but have a child together or where one of the partners has made "substantial contributions" to the relationship.

Ms McQueen said one of the biggest proposals was if one partner owned the home before the relationship, only the property's increase in valuation would be split - not the property itself.

"The law at the moment has an automatic assumption that the family home will be shared equally irrespective of how the partners have come to it."

Homes bought during the relationship would still be shared equally.

It also suggested income-sharing for a limited period of time after the relationship ended for couples who had been together 10 years or more, had children or had made economic or career sacrifices like staying at home to care for the children.

"We are suggesting a formula where that [time] would relate to the length of the relationship - up to five years. So if you had a four year relationship that period of time would be two years, if you had a 15 year relationship it would be five."

"We think that would bring certainty and clarity to people."

Ms McQueen said another recommendation was to allow trust-owned property to be split more easily.

"New Zealanders are pretty keen on putting property into trusts and what it means is that it's technically not available to be shared."

"We're suggesting a simply remedy that trust property should be shared if it had been 'produced, preserved or enhanced' by the relationship."

The interests of children should also be prioritised by giving the primary caregiver a default right to stay in the family home directly after a separation.

It also suggested developing a comprehensive information guide to explain the law and said funding community organisations to provide person to person support should also be considered.

"We think there should be better education and indeed more accessible information for separating couples."

The Commission is seeking feedback on the proposals before making its final recommendations to the government next year.