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How To Calculate Your Accrual

The accrual system is a deferred sharing of gains property system, where the effect only occurs on dissolution either by death or divorce. The accrual is the amount which the estate has increased in value from the commencement of the marriage to its dissolution. The spouse whose estate shows the smaller accrual has a claim for half of the difference between the accruals of both spouses’ estates.

In terms of the Matrimonial Property Act 88 of 1984, there are four specific assets which are excluded from the accrual:

  1. In terms of 4(1)(b)(i) “any amount which accrued to that estate by way of damages, other than damages for patrimonial loss (patrimonial losses are damages which can be assessed e.g. damages to a car in a car accident) is left out of account.” This section is silent on the exclusion of the proceeds and replacements of the excluded asset and it is presumed that only the amount of the damages is excluded.
  2. If the ante nuptial contract (ANC) specifically excludes an asset from the accrual of the spouses, then the particular assets, its proceeds and assets which replace the excluded assets or are acquired with its proceeds are excluded from the accrual in terms of section 4 (1)(b)(ii).
  3. In terms of section 5(1) any inheritance, legacy or donation which a spouse receives from a third party, the proceeds of the inheritance, legacy or donation and assets which replace or are acquired with the proceeds of such assets are excluded from the accrual of the recipients estate.  However, an inheritance, legacy or donation can form part of the accrual if the parties agree to this in their ANC or if the testator or donor stipulates this.
  4. In terms of section 5(2) donations between spouses when alive are excluded from the accrual. It is presumed that proceeds and replacements assets are excluded only to the value of the donation.

 

When calculating your accrual first you need to add up all your current assets. Assets are immovable property, share block interests, vehicles, boats, aeroplanes, livestock, equipment and tools, money (cash, investments and so forth); jewellery, clothing, loan accounts in companies or partnerships, members interests in close corporations, goodwill in firms and businesses, shares, furniture, works of art, coin collections, policies and pension benefits that have already accrued.

If a pension benefit has not yet accrued to a spouse, then the pension interest is deemed to be a part of the assets.  The Pension interest is determined as following.

  1. If the spouse is a member of a pension fund then his or her pension interest is the benefit to which he or she would have been entitled had he or she terminated his or her membership of the fund on the date of the divorce by resigning from his or her employment.
  2. If the spouse is a member of a retirement annuity his or her pension interest is equal to the sum off his or her contributions to the fund up to the date of divorce plus annual simple interest on those contributions calculated at the prescribed rate.

 

Once you have added up all the assets you then need to subject all your liabilities to obtain a net value. Thereafter you less any excluded assets and then you less your commencement value.

To work your commencement value, the commencement value in the ANC needs to be calculated as at date of divorce. The commencement value in the ANC is multiplied by the average CPI as at date of dissolution and then divided by average CPI at date of commencement.

Please refer to table B1, in the link to obtain the necessary values.  http://www.statssa.gov.za/publications/P0141/CPIHistory.pdf

Below is an example of a CPI calculation. In this case the husband and wife were married in 2001 and divorced in 2019. The Husbands commencement value is in ANC was R100 000.00 and the wife’s’ was R50 000.00. Using the CPI formula, the amounts are adjusted as to their respective value in 2019 and this amount is subjected from the assets in the accrual calculation.

Asset value at date of marriage x CPI dissolution/CPI commencement

HusbandWife
Commencement value at date of marriageR 100,000R 50,000Table B1
CPI Dissolution 112.2112.22019Average
CPI Commencement42422001Average
CPI AdjustmentsR 267,142.86R 133,571.43

Below is an example of a simple accrual calculation. In this case the wife’s accrual claim against her husband is R 2 198 214.29

ACCRUAL CALCULATION
HUSBANDWIFE
ASSETS
Immovable PropertyR 3,500,000R 0
Pension R 1,500,000R 500,000
Motor VehicleR 300,000R 200,000
ASSETS TOTALR 5,300,000R 700,000
LIABILITIES
Motor VehicleR 50,000R 30,000
Credit CardR 60,000R 10,000
LIABILITIES TOTALR 110,000R 40,000
SUB TOTALR 5,190,000R 660,000
LESS EXCLUDED ASSETSR 0R 0
SUB TOTALR 5,190,000R 660,000
LESS CPI ADJUSTMENTR 267,142.86
R 133,571.43
ACCRUAL VALUER 4, 922,857.14
R 526,428.57
DIFFERENCE BETWEEN THE TWOR 4,396,428.57
50% OF DIFFERENCE BETWEEN THE TWOR 2,198,214.29