Insights

Ningbo industrial injury, traffic accident compensation, divorce should be divided?

Ningbo Author：LuXu WANG

Lao Wang of Ningbo got his finger crushed by a machine in the factory and received a sum of compensation for work-related injuries after he was identified as a work-related injury; Master Li was rear-ended when he was running a freight, and was rated as Grade 10 disability and received compensation for traffic accidents. This money is compensation earned by the injured at the cost of their health. Now that the money has been received, questions arise: Whose is this money, exactly? And during a divorce, is the other spouse entitled to a share?

Let’s state the conclusion first:Compensation or damages received by one party as a result of personal injury shall be regarded as the individual property of that spouse and, in principle, shall not be subject to division upon divorce. Article 1,063, paragraph 2 of the Civil Code is stated quite clearly. However, the phrase “in principle” is crucial—funds designated as “compensation” do not necessarily all belong to the individual; once such compensation is commingled with marital or joint property, determining its ownership becomes complicated. What the money is earned from, where it is spent, and whether it has been commingled with marital property will all influence the final outcome.

1. Legal basis: Why does this type of money belong to the individual?

Article 1,063 of the Civil Code lists the personal property of one spouse, with the second item being “compensation or damages received by one party due to personal injury.” Correspondingly, Article 1062 stipulates that wages, bonuses, remuneration for labor services, income from production, operation and investment, income from intellectual property rights, etc., belong to the joint property of husband and wife.

Why should the compensation for personal injury be separately brought out to the individual? The explanation of the article is very direct: the medical expenses, living allowance for the disabled and other compensation or compensation obtained by one party due to personal injury are of personal nature and are the basic expenses used to protect the victim's life. They must be owned by the individual and cannot be used as the joint property of husband and wife.

The underlying rationale is that compensation is intended to address the harm suffered by the victim in respect of their rights to bodily integrity and health. Disability compensation makes up for the loss of labor ability, medical expenses make up for the expenses of medical treatment, and mental damage comfort money comforts the pain I have suffered. All of these are closely linked to the victim’s person and possess a clear personal nature. If they are turned into common property because of marriage, it is tantamount to allowing the injured party to suffer another loss when the marriage dissolves, which obviously deviates from the original intention of compensation.

This also determines the focal point of the judgment: what matters is “what the money is for,” not “when the money will be received.” Even if the compensation is received after marriage, as long as it constitutes personal injury compensation, it still belongs to the individual. The most common misconception in practice is to equate “property acquired during marriage” directly with “joint property,” which is incorrect.

There’s one more thing to keep in mind. Article 30 of the (I) of Judicial interpretation of Marriage and Family of the Civil Code stipulates that military casualty insurance, disability subsidies and medical living subsidies belong to personal property and do not need to be separately certified. For ordinary workers, workers’ compensation benefits also possess a personal and exclusive character and shall be treated in accordance with the spirit of Article 1,063, paragraph 2.

2. Which funds are considered "personal"?

Compensation for personal injury involves numerous items, each of which needs to be examined individually. Although work-related injuries and traffic accidents arise from different sources, the determination of “which costs are borne by the individual” follows the same logic—namely, examining the recipient of the compensation and its intended purpose.

In terms of work-related injury compensation, according to the Regulations on Work-related Injury Insurance, the compensation items include one-time disability subsidy, one-time work-related injury medical subsidy, one-time disability employment subsidy, disability allowance, living and nursing expenses, auxiliary equipment expenses, salary during the period of suspension of work, pension for dependent relatives, etc. Among them, the parts directly related to the level of disability, treatment and rehabilitation, and the decline in employability-one-time disability subsidy, one-time work-related injury medical subsidy, one-time disability employment subsidy, disability allowance, living care expenses, and assistive devices Fees-because of their personal specificity, belong to the individual injured employees.

In terms of traffic accident compensation, according to Article 1,179 of the Civil Code, the scope of compensation includes reasonable expenses for treatment and rehabilitation such as medical expenses, nursing expenses, transportation expenses, nutrition expenses, hospitalization food subsidies, etc., as well as income reduced due to missed work; if disability is caused, it also includes auxiliary equipment expenses and disability compensation; if death is caused, it also includes funeral expenses and death compensation. Furthermore, pursuant to Article 1,183, where the infringement of a natural person’s personal rights causes severe mental harm, the injured party may also claim compensation for mental distress.

Classify these items according to their attribution, and there are roughly the following categories:

  • Disability compensation: Compensation for the reduction in one’s capacity to work, which is personal in nature and belongs to the injured party.
  • Medical expenses, subsequent treatment costs, rehabilitation expenses: Compensation for medical expenses shall be paid to the victim personally. However, if the spouse uses the joint deposit of the husband and wife to advance the advance, the advance portion can claim the return.
  • Nursing expenses, transportation expenses, inpatient meal allowance, nutritional expenses, assistive device expenses: Arises in connection with treatment and rehabilitation, and is attributable to the injured party personally.
  • consolation money for mental damage: comforting the mental pain of the victim himself, which has personal attributes and belongs to the injured party.
  • Living expenses for dependents: This portion is awarded to the dependents and belongs to them individually; it does not constitute marital property. A separate section below provides further explanation.

It should be noted that the phrase “compensation or indemnification” in the provision is broad and is not limited to the specific items listed. The crux of the determination has always been whether the funds possess a personal and exclusive character, rather than whether the term “compensation” appears in their designation.

3. Which assets may be recognized as joint property?

The compensation is, in its entirety, assigned to the individual; this refers to its “default attribution.” However, in personal injury compensation, certain items are indeed not exclusively personal in nature and may even be explicitly classified as joint property.

The most typical example is loss of income. Loss-of-income compensation is intended to cover the reduction in the victim’s earnings during the period from the date of injury until full recovery, and it is, in nature, classified as a form of wages. Since it constitutes income compensation, it falls within the scope of “wages, bonuses, and remuneration for services” under Article 1,062 and is thus marital property subject to division upon divorce. Wages during the suspension period with pay in work-related injury cases and maternity benefits for female employees are, by the same rationale, both classified as wages and shall be treated as joint property.

In this way, the same compensation payment may simultaneously include both “individual” and “joint” components. A common example is: when the party was injured in Ningbo, he received a total of 180000 yuan of work-related injury compensation, such as one-time disability subsidy, one-time work-related injury medical compensation, one-time disability employment subsidy, salary during the suspension period, medical expenses, etc. The court found that there were both personal property and joint property of husband and wife, and the discretionary personal property was 160000 yuan. It is evident that “a single compensation payment may comprise components of different natures” is a common occurrence in practice.

Secondly, how should the property acquired with the compensation be classified?Compensation is in the form of currency, which is a fungible good; once spent, its source becomes difficult to trace. If the victim pays the compensation separately, the money transaction is clear, and the property right is registered in his own name, judicial practice tends to think that this is only the transformation of the form of personal property, and the real estate still belongs to the individual. However, once the compensation is first entered into the joint account of the husband and wife, mixed with the joint funds, and then used to buy a house, the source of funds is difficult to correspond, and the other party is likely to claim that this part of the investment belongs to the common property.

Furthermore, there is the risk of mixing. When compensation is deposited into a joint account used by the couple and applied toward daily expenses, mortgage repayments, and investments, over time the distinction between personal and marital property becomes blurred. The party advocating that the compensation be treated as individual property must present evidence to substantiate the source and nature of these funds; otherwise, the court may treat it as joint marital property. In the case of Chongqing No.5 Middle School (2019) Yu 05 Min Zhong No. 1128, one party claimed that the account deposit contained 78000 yuan of work-related injury compensation. The court deducted the 78000 yuan from the common property only after reviewing the evidence such as the work-related injury mediation agreement and discharge record. On the other hand, another amount in the case was claimed as "escrow deposit" and "mother's gift", which was not deducted due to lack of evidence-the weight of proof, which can be seen from this.

How to calculate the compensation that the 4. has already spent

“We’ve already spent all our money on the family—what’s left to divide?” This is the most common defense in divorce disputes. However, spending money does not mean it disappears; the key lies in how it is spent and whether you can provide proof of expenditure.

To begin with, a fundamental point: the personal nature of compensation does not automatically change simply because it is spent or its intended use is altered. Guangxi Luocheng (2011) Luo Minchu Zi No. 293 Case is a good mirror. The party concerned Wei received compensation of 208215.2 yuan for work-related injuries. After his wife received it on his behalf, he used the money together with common property to buy a foundation-building house. After the divorce, Wei sued, and the court held that although the compensation was used to purchase a foundation to build a house during the marriage, it "cannot change the specificity of the money"; Therefore, 192060.2 yuan, which belongs exclusively to one of Wei's parties, was first separated from the value of the real estate, that is, the balance of the compensation after deducting 16155 yuan of his five-year living expenses, and the rest was divided into half as the husband and wife's common property. In other words, the money has been converted into a house, and the personal attributes still follow along.

Now let’s talk about the portion spent on the family’s shared living expenses. If the compensation is indeed used for the family's daily expenses, medical treatment, child support, etc., and the other party uses it in good faith, the court will generally not require one party to spit out the money-after all, it has actually been consumed in the common life. However, the party asserting that “the funds have already been spent on the family” bears the burden of proof. In the aforementioned case of injury to a worker in Ningbo, the party who received the compensation on behalf of the person claimed that the money had been used for family life, especially to repay the loan for house purchase, but failed to provide strong evidence. The court did not accept it and still ruled to return the personal property belonging to the other party. This shows that "spent" is just a proposition. Whether you can stand or not depends on running water, vouchers and instructions of use.

There is another category to be vigilant: if one party withdraws a large amount before and after the divorce, the destination is unknown, and the purpose is unclear, the court may not recognize the statement of "reasonable consumption. How one chooses to spend their personal assets is a matter of personal freedom; however, once the matter goes to court, only clear explanations and solid evidence can help one safeguard those assets.

5. the ownership of dependents' living expenses

The cost of living for dependents is an item that is easily overlooked yet most prone to disputes. The "Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Personal Injury Compensation Cases" stipulates that the living expenses of the dependents shall be included in the disability compensation or death compensation. Its essence is to compensate the victim for the loss of the part of the maintenance obligation originally undertaken by the dependant due to injury. The dependant usually refers to minor children, parents who are unable to work and have no other source of income.

Since this money is paid to the dependants, its ownership will follow the dependants instead of the victim himself, and even less belong to the joint property of husband and wife. In other words, whoever is legally considered a dependent is entitled to that portion of the funds.

Among these, the part concerning the child is what needs to be clarified most. As the dependent, the living expenses allocated to the child belong solely to the child; neither parent may treat such funds as their own property for purposes of division in a divorce. After divorce, in principle, the party directly raising the children will manage the expenses for the maintenance, education and medical care of the children. Management is not about possession, nor is it about having absolute control. If the direct caregiver misappropriates this part of the child's money without authorization, the other party or other guardian has the right to raise objections.

How to deal with 6. divorce properly

The compensation goes to the individual, but that doesn’t mean everything is settled. Because it is currency and easily commingled, if you want to safeguard your rightful share in the event of divorce, you need to take the necessary preparatory steps in advance.

  • Keep your source documentation. Compensation agreements or mediation statements, court judgments, disability assessment conclusions, work-related injury determination decisions, bank transaction records, and medical receipts should all be properly retained. These materials can prove that “the funds originated from personal injury,” serving as the first line of defense in asserting ownership of personal property.
  • Separate account management. After the compensation is received, try to deposit it into a special account, separate from the family's daily income and expenditure account, and avoid automatic mixing into the common capital flow.
  • Avoid confusion. Do not deposit the compensation into a joint marital account, nor use it for joint investments or shared loan repayments; minimize financial transactions between personal and marital assets.
  • For marking purposes. If you do want to use compensation to pay for household expenses or large expenses, keep a record of the transfer and a description of the purpose for later explanation.
  • Fixed evidence as necessary. If there are indications that the other party is concealing or transferring joint property, promptly preserve evidence and, if necessary, apply to the court for an investigation and evidence collection.

To deal with these matters, it is better to straighten out the accounts when the compensation is received than to turn over the old accounts when the divorce is over. Clarity, in itself, is the best protection.

The difference between 7. and "death compensation"

This article talks about the compensation of the injured person himself-the medical expenses, disability compensation, spiritual damage consolation and so on when the victim survived, which belong to the victim. Death compensation is another matter and cannot be confused.

The object of compensation for death compensation is the close relatives of the deceased, not the deceased himself. It fills the losses suffered by close relatives due to the death of their relatives. In nature, it belongs to the property shared by close relatives. There are special rules for distribution. It is usually negotiated between spouses, parents, children and other close relatives, or the court based on the relationship with the deceased. The closeness of the family, the closeness of the common life, the source of income and other factors are not simply treated as the joint property or personal property of the husband and wife.

In the same way, the compensation for spiritual damage in the case of death is the spiritual comfort for close relatives, which belongs to the common property of close relatives, rather than the personal property of one spouse or the common property of husband and wife. The rules of attribution are completely different when it is clear whether a person is alive or dead.

8. common mistakes

Myth 1: "The money you get in marriage is common." Wrong. Marital acquisition is only a reference for judging common property. Personal property listed in Article 1063 shall not become common property as a result of marital acquisition. Compensation for work-related injuries and compensation for disability in traffic accidents are included.

Misunderstanding 2: "When you buy a house with compensation, it becomes common property."Not necessarily. If the source of compensation is clear, separately funded, registered in their own name, the property can still be identified as a form of personal property conversion. However, if the funds have been mixed and registered in the names of both parties, there is room for the other party's claim.

Myth 3: "If you spend the money, you'll be fine." Neither. Whether spending is exempt depends on whether it is actually used for family living together and whether the evidence is sufficient. The court may not approve of large expenditures that are unaccounted for and unaccounted.

class case reference: in the case of property dispute after divorce between huang moujia and zhong mou, the court determined that part of the disability compensation, continuing treatment fee, spiritual consolation and so on in traffic accidents belonged to personal property, while the lost wages and the living expenses of the dependents did not belong to personal property; since the compensation had been mixed with common property, it was decided to return 60000 yuan. It can be seen that the portion of workers’ compensation and traffic accident compensation that is personally attributable generally belongs to the individual. Trial Court: People’s Court of Zhuji City, Zhejiang Province Case No.: (2014) Shaozhu Min Chu Zi No. 1207

9. Frequently Asked Questions

Question 1: If workers’ compensation is received during the marriage, does it need to be divided in a divorce?In principle, there is no distinction. The part of the work-related injury compensation with personal specificity, such as one-time disability subsidy, disability allowance, etc., belongs to the injured employee.

Question 2: Is lost wages also considered personal property?No, it doesn’t count. Loss-of-income compensation for work stoppage represents a reduction in earnings due to injury, falls within the category of wages, and constitutes marital property subject to division upon divorce.

Question 3: The compensation has already been deposited into the couple’s joint account—what should be done?Make every effort to provide evidence to substantiate the source and nature of this sum of money. If the compensation agreement, running water and other evidence can be used to restore the money from personal injury compensation and has not been used jointly, it can still claim to be treated as personal property; if it cannot be proved, it may be treated as common property.

Question 4: If a house was purchased with compensation money, how is it divided in a divorce?First, check whether the source of funds is clear and whose name the property title is registered under. If the source is clear, the property is funded separately and registered as an individual, the property tends to be recognized as an individual; if it has been mixed with joint funds or registered with both parties, it may be treated according to the proportion of capital contribution or joint property.

Question 5: The compensation has already been spent on household expenses—can it still be recovered?You need to distinguish between different situations. If it is indeed used for family life together and the other party is in good faith, it will generally not be recovered; if the party claiming "spent" fails to produce evidence, the court may not accept it and still decide to return it.

Question 6: The living expenses of the dependent belong to the child—after divorce, who is responsible for them? belongs to the children and is managed by the party who directly raises the children. It is used for the upbringing, education, medical treatment and so on of the children and cannot be used for other purposes.

10. Practical Legal Insights

The crux of this type of money is not whether funds received during marriage are considered joint property, but rather what their source is. The most easy thing for the parties to suffer in divorce negotiations is that the other party bluffs you by saying, "this is the money you get after marriage, you have to split it 50-50. In this case, first clarify the source, name and destination of the money: disability subsidies, medical expenses, nursing expenses and other personal exclusive parts, pointing to the compensation for your physical damage, which belongs to personal property in nature, and does not take it out of course. Before you start discussing it, organize your bank statements by date and transaction type—this is the first step to safeguarding them.

The real problem arises when compensation is conflated with marital property. In practice, it is common to put the compensation into the common account for daily use, and then use it to repay the mortgage, decoration and family expenses. Therefore, as soon as the money arrives, it should be deposited in a special account to avoid mixing it with common funds such as wages and operating income. If it has been mixed up, it is necessary to use transfer records and consumption vouchers to restore the flow direction. Only if it can show that a certain part still corresponds to the purpose of compensation can it be held. The living expenses for a dependent are intended for the dependent themselves and cannot be simply treated as marital property to be divided.

When it comes to the division, instead of the stalemate on "dividing without dividing", it is better to focus the negotiation on the reduction of the mixed part and the burden of proof. You can take the initiative to put forward a list of the use of compensation, forcing the other party to "where the money is spent" to give a response, often in turn can reveal its hidden common property action. If the other party has already used the funds for personal extravagance or transferred them, you may also seek to hold them accountable for the corresponding consequences in the litigation. What needs to be reminded is that don't sign a general "property has been settled" clause for the sake of a temporary agreement-once the personal compensation is written in, it will be difficult to turn it back in the future.

To sum up: the compensation or compensation obtained by one party due to personal injury belongs to the personal property of the husband and wife, and in principle, he does not participate in the division when divorcing. This conclusion has the clear basis of the second item of Article 1063 of the Civil Code, and also conforms to the original intention of the compensation system to protect the victim. However, there is room beyond the "principle"-the nature of different items within the compensation is different, the cost of lost work is common property.

Here are two practical pieces of advice. For the victim, it is the most worry-free way to store the compensation separately after receiving it, keep the source certificate, and not easily mix it with family funds. For the other party, it is also necessary to know that not all of the compensation is inseparable, and the cost of lost work is common property, and legitimate rights and interests can also be claimed. Ultimately, getting the accounts straight is far more useful than arguing afterward.