Ongoing Costs After Separation

In the first article in this series, we looked at occupational rent — what it is, and when it may be fair to recognise one partner’s exclusive use of the family home after separation.

In this second article, we turn to a related (and very relatable) issue: ongoing costs after separation.  You might be wondering:

“I kept paying the mortgage.  Does that get taken into account?”

“I paid for that leak in the bathroom to be fixed before we listed the house for sale.  Should I bring this up?”

The short answer is yes – these payments matter.  But, as with most things under section 18B, whether (and how) those payments are recognised depends on the circumstances.

The reality of ongoing costs after separation

You may be going your separate ways…but the debt does not!

While some debts can be divided quickly, many require both parties to remain jointly liable until everything is resolved.  These often include:

• mortgage repayments on the family home or other jointly owned property, and
• loan repayments connected to relationship assets (for example, a car or business loan).

Alongside these debts, there are also ongoing shared expenses that may continue after separation, such as:

• rates and insurance for jointly held property;
• repair and maintenance costs for shared assets;
• costs of preparing a property for sale.

Some people continue to pay these costs equally.  However, it is common for one partner to take responsibility for some (or all) of the payments in the meantime.  In this situation, section 18B allows for these contributions to be recognised as part of the division of property.

Am I entitled to compensation?

As with occupational rent, there is no automatic entitlement to compensation.  Section 18B is discretionary – in other words, it depends heavily on the circumstances of each situation.

Some of the relevant factors include:

Who benefited from the payments
For example, one person may have continued to repay a loan for a vehicle that was being used by the other partner.

Whether the payments replaced other obligations
If one partner paid the mortgage but lived in the home rent-free, those payments may effectively offset any occupational rent.

Whether post-separation expenses were agreed
It may be difficult to claim compensation for significant expenses if you did not discuss them with your ex-partner first.

The parties’ financial positions
Including whether one partner was carrying a disproportionate financial burden after separation.

Whether the payments were voluntary or unavoidable
For example, whether payments were necessary to avoid default, penalties or loss of an asset.

In practice, post-separation loan repayments and other expenses are rarely reimbursed dollar-for-dollar.

Instead, they are typically:

• taken into account as part of the overall property division, and
• balanced against other post-separation benefits or contributions (such as occupation of the home).

Tips for navigating post separation expenses

Keep good records. If separation is a long process, it can be difficult to identify who paid what.  Keeping clear records early on can make any claim for compensation far easier down the track.

Be cautious about changing any loan arrangements. Even if you are making the payments, the other person’s agreement is usually still required before making changes, such as refixing a mortgage.

Talk to your ex before incurring significant expense. If work is required, for example, to prepare a property for sale, it is best to agree on it first.  Spending money unilaterally can lead to disputes later on.

Get advice early. Early guidance can help put practical arrangements in place so expenses are handed fairly from the start – rather than becoming a source of dispute when it comes time to finalise matters.

By Liana Yong

Liana is a Senior Relationship Property Lawyer at Clean Break, known for her pragmatic, resolution-focused approach to separation and complex property matters. She helps clients find clear, tailored solutions during challenging times.