Wastage is when a party has intentionally and recklessly or negligently reduced the asset pool in the relationship.

Wastage consists of acts of gambling, drugs, drinking, prostitution, adultery or pornography. The amount or asset wasted will be added back to the share of the innocent party.

It is difficult dealing with a spouse who is wasting money or an asset that is jointly owned by the spouses or de facto partners. The fact that a party is responsible for wastage will be relevant in property settlement which the aggrieved party must raise and prove. First, it is essential to identify what acts can be considered as wastage.  

Wastage is when a party has intentionally and recklessly or negligently reduced the asset pool in the relationship. The wastage may consist of gambling, drugs, drinking, prostitution, adultery or pornography. Wastage consists of actions that are not justifiable for the loss or decrease of the asset pool.

It is indeed an unfair situation wherein one spouse or partner squanders away what also is rightfully owned by the other party. Property settlement usually follows after parties divorce or separate. In the case of divorced parties, they can apply for property settlement within 12 months from the time the divorce became final while for de facto partners the application must be filed two years from the time the relationship ceased. A party cannot dispose of, alienate or waste common property until after the property settlement is finalized.

There are four steps to be followed in a property settlement issue.

First, parties will be identifying assets and liabilities. The second step is the part wherein wastage must be raised. In the second step, parties will be identifying their contributions to the asset pool of the relationship. This is now the time to raise the wastage and liabilities incurred by the other party. Aside from determining the financial contributions of each party, the court will also be looking into where the money went. There will be a determination as to whether any wastage can be attributed to solely one party.

Any allegation of wastage must be substantiated. A party who is alleging wastage by the other party must provide evidence that supports the claim otherwise the court will not be satisfied. The party might present witnesses who can give testimony as to how the other party wasted assets or money of the relationship. Receipts and photographs may also be utilized as evidence if available.

Once proven, the court can make appropriate orders for property settlement with due consideration for the wastage committed by the other party. Usually, what the court does is to add back to the innocent party the amount that was wasted which means that the guilty party will be receiving a lesser property settlement share.

In a property settlement case, the conduct of parties is usually irrelevant but wastage is an exception. Hence, during the relationship and post-separation parties must be careful of their conduct and how they handle money and assets.

Parties need to remember that a divorce or separation does not bring about an automatic property settlement. There are time limits to observe during which an application must be filed and until an order has been issued by the court a party cannot treat money or asset as exclusively his own.