Economic compensation (离婚经济补偿), often called housework compensation, is set out in Article 1088 of the PRC Civil Code. A spouse who has borne more obligations because of raising children, caring for elderly relatives or assisting the other spouse's work may request compensation from the other spouse on divorce. The amount is agreed by the spouses or, failing agreement, decided by the court. Since 2021 this applies regardless of the couple's property regime; previously it applied only where spouses had agreed to keep separate property.
Why it matters
Community property division compensates a homemaker only where there is marital property to divide. Economic compensation recognises unpaid work in its own right, which matters where most wealth is in one spouse's pre-marital assets or overseas accounts, or where the marriage was short. Courts typically consider the length of the marriage, the amount of care work, the other spouse's income and the local living standard. Awards in practice are often modest, so expectations need to be realistic.
How it works in practice
A Japanese wife gave up her career when the couple moved to Shenzhen for her husband's job. For eight years she ran the home and raised two children while he built his business, most of which he had set up before the marriage. On divorce, in addition to her share of community property, the court awarded her a lump-sum economic compensation reflecting her years of care work.
Common mistakes
- Not raising the claim at the time of divorce; it is generally made in the divorce proceedings
- Failing to document care responsibilities, such as school records or medical appointments
- Confusing economic compensation with economic assistance, which depends on hardship
- Expecting it to equal a salary for every year of housework
- Waiving it in a divorce agreement without understanding its value