The Treatment of Long Service Leave
The value of accrued long service leave can be large and can therefore be a significant factor in a property settlement. But how is it treated? The Full Court considered the question in the case below.
The Facts
The parties had a relationship of 14 years. At commencement of cohabitation the wife had savings of $50,000, superannuation and accumulated long service leave from her position at a bank where she had worked since high school.
Some 8 years after the commencement of the relationship, the wife was made redundant and received a redundancy package of $110,000 net. The wife sought a percentage adjustment in her favour of 10% for this payment.
At the trial, the Judge provided the wife with an overall adjustment of 15% (or 65% of the pool). There was no differentiation between the initial contributions and contributions made during the marriage. No adjustment was made to either spouse for ‘future needs’.
The husband appealed, on the basis that the Judge had incorrectly characterised the wife’s redundancy as an initial contribution on the basis she had no right to the redundancy package at the commencement of the relationship.
The Court Found
The Full Court agreed that when identifying property of the parties, accumulated long service leave cannot be treated as property.
The Court found that it was open to the Trial Judge to consider ‘accumulated long service’ which ultimately leads to a ‘redundancy payment’ as an initial contribution of a party. However, the Judge must ensure that ‘double dipping’ does not occur.
As the trial Judge had not specified a percentage adjustment to the wife separately for ‘initial contribution’ and the ‘redundancy’ just an overall contribution adjustment, the Full Court was satisfied that double dipping had not occurred in this case.
The Court Ordered
The Husband’s appeal was dismissed.
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