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A Law Amending Pension Allocation in Separation Proceedings

Allocation of Pension Rights between Spouses in Separation Proceedings

Recent legislation has allowed the Courts to transfer pension contributions in marriage separation proceedings between spouses.

When dealing with marriage separation cases, especially in cases where either or both spouses are at a senior age, issues regarding social security contributions which were paid throughout their marriage crop up. Such situations would typically result when one spouse would be the breadwinner whereas the other spouse (typically the wife) would not have worked outside the home following marriage.  Nevertheless, the national insurance contributions paid by the husband during his working life would be made from the community of acquests and the right to a pension would constitute an asset owned jointly by both spouses. Should the husband pass away, the wife would automatically be entitled to a widow’s pension on the strength of those contributions made by the husband.

However, what happens when their marriage falls apart? What happens to that spouse who did not work or pay for social security contributions and it  therefore not entitled to a contributory pension? Would the spouse who worked and paid social security contributions be eligible for a contributory pension, to the exclusion of the non-working spouse?

The Social Security Act has recently been amended and this amendment entered into force on 7th March 2023. In terms of this amendment,  the Family Court is now empowered to apportion the social security contributions between spouses in cases of marriage separation. This apportionnement will enable the non-contributing spouse in the social security contributions may be granted a part of the pension.

The new law will enable one spouse to be financially independent or less dependent on the other spouse during his or her later years. The Court is now empowered to order the transfer of part of the contributions paid by the insured spouse to the other spouse.  Such contributions would then be considered as having been paid by that other spouse, enabling both spouses to become entitled to a pension later in life.

Therefore, this amendment carries significant and far-reaching implications for both spouses.

The amendment to the law is poised to enhance the pursuit of justice by providing the Courts with additional avenues to ensure a fair and equitable resolution. This amendment is particularly significant in addressing social injustices, such as cases where one spouse is entitled to a pension due having paid social security contributions as an employed or self-employed person, whilst the other would have contributed to family life without working and paying social security contributions – as it seeks to create a more balanced and comprehensive legal framework for adjudicating such matters.