Couples may keep sharing their income for five years after a breakup under proposals being considered by the Government.

And the wealth which each person brings into a relationship, including the family home, will no longer be automatically split down the middle if the proposals go ahead.

The changes were recommended by the Law Commission after its review of relationship property laws concluded that they had not kept up with social changes over the last four decades. They have been applauded by experts who say they will make the division of property fairer and will place greater priority on children following a separation.

In a report presented to Government, the commission said the general rule of a 50-50 split of property following a breakup should remain. But it recommended major changes to address the inequalities which had arisen.

Advertisement

"These recommendations are designed to make the law more responsive to the wide range of different family situations that exist today," said the commission's deputy president, Helen McQueen.

The Law Commission wants couples to be able to share their income for a period after a divorce or break-up if one of them has stopped working to raise a family.

"There is a strong feeling that if a person has given up their career to look after children and done the support role in a relationship they should get some recompense for that," said University of Auckland law professor Mark Henaghan, who specialises in family law.

He said that for many people, income was their biggest asset. Only getting half of the house after a breakup did not make up for their loss of earnings, he said.

The commission recommended the introduction of Family Income Sharing Arrangements (FISAs), which would be available to couples who had been together for 10 years or more.

The amount of shared income after a separation would be calculated based on the couples' combined average income in the three years before their breakup. It would be paid up to a maximum of five years, depending on how long the couple had been together.

Under the existing rules, a family home is treated as relationship property and is divided equally, regardless of when or how it was acquired. The commission has recommended that if the home was owned by one partner before the relationship began or was inherited, only the increase in the value of the home should be shared.

Divorce lawyer Jeremy Sutton said this reflected the fact that life in New Zealand had changed since the 1970s.

Advertisement

"We now tend to live longer, our partnerships are shorter, and many of us having more than one significant partnership during our lifetime, often forming them later in life.

"This means wealth is being brought into many relationships, rather than partners marrying early and creating wealth while they are together."

McWilliam Rennie family lawyer Jacinda Rennie supported the proposed changes and believed the family income-sharing agreement would make it faster for people to get financial support compared to the current system which required spouses to apply to the Family Court for maintenance and can take months.

"The ones it hits hardest in a separation is the mother with little children, so babies, who can't just leap back into work and they don't have an income."

Under the current system the parent applying to the court could be in financial strife while they waited for the court process, she said.

Rennie believed the new property rules would mainly affect people in second relationships, were also fairer, but acknowledged the move was controversial even among other lawyers in her office.

"Some of us think it is a good thing that a person who owns the house gets to keep the equity they had in the house at the start of the relationship, but other people in the office don't agree and think it is unfair and that the reason we have an equal sharing of a family home is because is the family home is a special asset and there are so many contributions [people] make to a relationship that can't be quantified."

Another key proposal was to give the Family Court greater powers to divide up trust property. Henaghan applauded this move, saying that trusts had become "a national pastime" in New Zealand.

"We have more trusts in this country than any other in the world, and most other countries recognise property in trusts as relationship property.

"But in New Zealand you can't get your hands on it, which means some people have ended up with very little, even though there's a lot in a trust."

Justice Minister Andrew Little said he is now considering the commission's 140 recommendations.