Should I reduce my working hours to get more in my financial settlement?

Both parties are trying to get as much as possible in their financial settlement and may be tempted to reduce their income to create the need for a larger share of the property pool.

As a mediator, I see parties who have recently reduced their working hours or resigned from their jobs which has reduced their income.

There may be legitimate reasons to reduce your working hours such as;

• Since separation, your mental health has impacted your ability to cope with separation AND the demands of a full-time job.

• There is no longer support with the kids to do drop offs or pick-ups from school requiring the resident parent to reduce to part-time.

• Parents are no longer both available to share taking the kids to medical appointments or extra-curricular after school activities, which falls to one parent post separation.  

• The ex has moved far away, unable to provide physical help.

• There is a safety concern whereby you no longer have a backup in the other parent.

• You have special needs children and no longer have the other parent to look after the children whilst you work.

  
  

There are also parties who feel that they will receive more in the financial settlement so reduce working hours to gain a perceived advantage, such as;

• One parent may work as a contractor and decide not to renew their contract for a few months until financial settlement is completed.

• A parent may create the capacity to become the primary carer to gain an increased % in their financial settlement.

• Resign from their job or opt for voluntary redundancy to lower their income.

• Persuade the other parent that their business has no value and they don’t earn a salary. You will need requested to have your business valued by a reputable business valuer by a mediator, lawyer or the court.

  
  

As you prepare for mediation, your mediator will capture your historical working life, time out of the workforce, past and current income, as well as qualifications you may have as input to assessment of your future needs on your opportunity to secure work.

If your matter ends up in court both parents’ contributions, future needs and best interests of the children for parenting arrangements will be taken into consideration. A perceived deliberate reduction in income to gain a financial advantage will not be seen in a good light and may adversely impact your financial outcome.

So, if you historically had a full time job as a teacher, a plumber, a hairdresser or a doctor for example, prior to separation but you reduced hours or resigned, then your current income disparity may be low or zero compared to the other party, but it will also show your future earning capacity with your qualifications to secure work and potential income.

During separation, it is important to maintain the regular financial income as a family whether that be one or two salaries to continue to support the family home mortgage or rent to be paid and food and medical to be sustained until the long-term financial separation can be implemented once financial settlement is agreed. Remember, you both decided what roles each of you would play during the relationship either primary financial provider and primary carer or shared financial providers and carers.

Short term financial support for the family is recommended to be retained for the status quo so as not to create financial hardship for the family, especially the children. As a family, you still need to ensure the children are financially secure to have a roof over their head, food, education and medical to thrive.

Once financial settlement has been completed you will be able to create two loving homes where children feel safe and secure with their needs met.

Property mediation enables partners/parents to collate the values of their assets, liabilities and superannuation in a balance sheet with supporting documentation to complete financial disclosure required by the Family Law Act 1975. Contributions and future needs are captured so that you can take to your legal consultation to review your balance sheet, contributions and future needs to gain advice on what you could achieve as a financial settlement if you went to court.

Book your property mediation intake session here to start the mediation process or take the self-paced pre-mediation online course “Empowered for Property Mediation” to gain emotional understanding of both parties' fears, why there has been resistance to agreement, myths, etc and receive a financial spreadsheet to create your balance sheet and model your options.

Author Cheryl Duffy – Divorce Coach, FDRP, NMAS Mediator and Parenting Coordinator

www.thedivorcecentre.com.au