Q: I was made redundant as a result of Covid-19. Unfortunately, my relationship also broke down over lockdown. We have chosen to separate. My ex-partner is now claiming he is entitled to half of my redundancy compensation. Is that true?
A: The law states that all relationship property will be divided 50/50 at the end of a relationship longer than three years. Whether your partner is entitled to share in your redundancy payment will depend on whether your separation or the redundancy occurred first.
If you separated before redundancy
Any property acquired after you separate will not be relationship property. The redundancy payment may consider your past service to the company. Some people have argued that because this service was during the relationship, it should be considered part of the "fruits of the relationship" and therefore shared at separation.
However, the purpose of a redundancy payment is to compensate for future lost income. If you had remained in your job, you would be entitled to keep all income earned after separation as your own. Your redundancy payment is analogous with these future earnings and therefore does not have to be shared with your partner.
If you were made redundant before separation
The answer becomes more complicated if you chose to separate after you were given notice of your redundancy.
If the redundancy compensation was received during the relationship, it will usually be considered relationship property. All property acquired during the relationship, subject to a few exceptions, is considered relationship property. The payment is compensating for income that would have been received during the relationship. Therefore, your partner would be entitled to share the payment 50/50.
However, if the compensation was received very close to the date of separation, you may be able to argue it is separate property because it is intended to compensate for income you would have received after separation. This is a contentious issue that would need to be decided in light of your particular circumstances.
If you were given notice of your redundancy before separation, but received the compensation payment after redundancy, this is a difficult area. You should consult a lawyer as this will be determined on a case-by-case basis.
Determining the separation date
From the above information, it is clear the date of your separation is important. You and your partner may have differing opinions about your separation date. It would be beneficial to gather evidence of your separation date, such as text messages to friends and family.
Outstanding leave or holiday pay
If part of your redundancy package is a payout of outstanding holiday pay accrued throughout the relationship, then that will be relationship property. Much like superannuation, this benefit was amassed during the relationship. Therefore, your partner will be entitled to an equal share of this benefit.
When redundancy and separation occur around the same time, determining whether your compensation is relationship property becomes difficult. Further factors such as the size of the compensation, the specific wording of the agreement and the date at which discussions began can complicate the distinction further. I would advise speaking to a family lawyer who can provide you with advice tailored to your specific circumstances.
• Jeremy Sutton is a senior family lawyer, specialising in divorce cases where there are significant assets, including family trusts and complex business structures. www.sutton.co.nz