Law Commission tells Govt to ditch 50-50 split of family home

The Government is considering 140 recommendations from Law Commission on changes to New Zealand's divorce laws. Photo / 123rf

The family home should no longer be automatically split 50-50 after a breakup, the Law Commission has told the Government.

And partners should be able to share their income for a period after they separate - a move which is partly designed for partners who give up work to raise children.

The Law Commission released its final report today following its review of the Property Relationships Act. All of the main proposals outlined in an interim report in November have remained following public input.

The commission's deputy president, Helen McQueen, said New Zealand had undergone a significant period of social change since the property relationship law was passed 43 years ago.

The law commission's deputy president, Helen McQueen. Photo / supplied

"It is important that the law keeps pace with social change and reflects the reasonable expectations of New Zealanders.

"In our view, the law for dividing property on separation is no longer fit for purpose in 21st century New Zealand."

She said some of the fundamental concepts of the law were still appropriate, including the general rule of equal sharing and its applications to marriages, civil unions and de facto relationships of three years or more.

"But we recommend other significant changes that will affect what property is shared. These recommendations are designed to make the law more responsive to the wide range of different family situations that exist today."

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 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.

Another key recommendation is the introduction of Family Income Sharing Arrangements (FISAs), which would allow partners to share income for a limited period after a divorce or break-up.

This would ensure the economic advantages of disadvantages of a relationship were shared more equally, the commission said. The amount and duration of such an agreement would depend on their incomes before separation and how long the couple had been together.

Other recommendations included giving the Family Court greater powers to divide trust property, and simplifying the criteria for when a relationship requires division of property after a break-up.

Justice Minister Andrew Little tabled the report in Parliament today. He said he would now consider the 140 recommendations and the wider impact of the proposals.