Op-Ed | From Status to Contract: Why Pensions Must Be Included in the Distribution of Surplus Property When Liberalizing Divorce Laws

The Two-Year Deadline for 112 Con. C. Jud. 4 Has Passed! Delays in Divorce Law Reform and Calls to Include Pensions in the Distribution of Surplus Property

On March 24, 2023, the Constitutional Court issued Judgment No. 4 of 2023 (112 Con. C. Jud. 4), ruling that the provision restricting the sole at-fault spouse from filing for judicial divorce must be amended by the legislature within two years—meaning that legislative action was required no later than March 23, 2025.

So, what exactly did 112 Con. C. Jud. 4 state?

The Justices Stated: An Irretrievably Broken Marriage Should Offer an "At-Fault Spouse" a Way Out

Under past judicial practice, in addition to statutory grounds for divorce, judicial divorce adopted a passive and compromise-based "breakdown theory": only a spouse who was "not at fault" or "less at fault" could file for divorce against the other spouse. In other words, anyone deemed solely "at fault" for the breakdown of a marriage was completely barred from filing for judicial divorce, regardless of whether the marriage existed in name only or the spouses had long been separated (Note 1).

In 112 Con. C. Jud. 4, the Justices did not declare the divorce provisions of the Civil Code unconstitutional in their entirety. Rather, they pointed to a legislative "defect" or "inadequacy": the divorce system provided no avenue at all for a sole at-fault spouse to leave the marriage. Therefore, when a marriage has suffered a serious and irreparable breakdown, categorically prohibiting such a spouse from seeking divorce may produce manifestly harsh results in individual cases and violate the freedom of marriage protected by the Constitution. The judicial divorce system therefore requires amendment to provide additional avenues for leaving a marriage.

The Justices used vivid language to describe the significance of the divorce system for at-fault spouses:

The provisions at issue, regardless of whether a considerable period has elapsed since the occurrence of the major circumstances rendering the marriage difficult to maintain, or whether such circumstances have persisted for a considerable period, uniformly prohibit the sole at-fault spouse from petitioning for judicial divorce. This is tantamount to forcing that spouse to continue facing a severely broken and unsustainable marital relationship characterized by estrangement or conflict. It completely deprives the spouse of any opportunity to divorce and may result in manifestly harsh circumstances in individual cases.

From Status to Contract: The Positive Breakdown Theory Further Contractualizes and Liberalizes Marriage

Faced with the Constitutional Court's requirement that amendments be enacted "within a designated period of two years," the Executive Yuan did not approve the draft amendments to the Family Part of the Civil Code until February 20, 2025, and did not submit the bill to the Legislative Yuan for review until September 30. As of the time of publication, the Legislative Yuan had yet to schedule the bill for review, resulting in a serious delay in reform and leaving current family court judges to rely directly on the reasoning of 112 Con. C. Jud. 4 when adjudicating divorce cases (Note 2).

To address the Justices' concern that at-fault spouses lacked an avenue for divorce, the Executive Yuan adopted legislative approaches suggested in 112 Con. C. Jud. 4 (Note 3). In addition to removing the restriction requiring the petitioning spouse to be without fault, the draft introduces a "separation clause," providing that "if the spouses have been separated for an aggregate period of three years within a five-year period, either spouse may petition for divorce." It also introduces a "manifest unfairness clause," allowing a court to dismiss a petition for divorce if maintaining the marriage is necessary because granting the divorce would be manifestly unfair to the spouse who refuses to divorce. This legislative model, modeled in part on the "hardship clause" of the German Civil Code, seeks to move the legal framework from a passive breakdown theory toward a positive breakdown theory.

We believe that the Executive Yuan's version of the "separation clause" still contains a degree of interpretive uncertainty. In addition, because the Civil Code does not establish a system of "legal separation," practical difficulties are likely to arise. For example, the Executive Yuan's version does not provide detailed explanations or supporting measures concerning how the period of separation should be calculated or how separation itself should be determined. If the Executive Yuan's version is enacted, these questions will ultimately depend on the independent judgment and discretion of individual judges. Economically disadvantaged spouses within a household may also find it more difficult to obtain the financial resources necessary to establish "de facto separation," raising doubts as to whether the "separation clause" can function as an effective standard. In short, determining whether separation should be recognized broadly or narrowly will present a significant challenge for frontline family court judges.

Putting our own views aside, however, both the Justices' legislative suggestions and the Executive Yuan's draft ultimately seek to increase the available avenues for leaving a marriage. On the surface, expanding the freedom to divorce may appear to place less emphasis on preserving marriage. In substance, however, it further contractualizes and liberalizes marriage. This development echoes the famous proposition advanced by English legal scholar Henry S. Maine, associated with the historical school of jurisprudence, in his book Ancient Law (1861):

"The movement of the progressive societies has hitherto been a movement from Status to Contract."

Legal relationships are no longer determined solely by social or family status. Individual autonomy also plays an important role, allowing individuals to freely establish relationships with others through mutual agreement. Reform of marriage law based on the positive breakdown theory can therefore be understood as carrying forward Maine's proposition by expanding the freedom of marriage.

In other words, when the law continues to use the status of being "at fault" to completely prevent an individual from leaving a marriage, it effectively pulls marriage back into a status relationship from which it is difficult to escape, contrary to the modern rule of law's understanding of individual freedom and dignity. Taiwan's marriage law is once again moving through the crucial transition from "status" to "contract": even where a spouse bears fault for the breakdown of the relationship, the state still cannot completely obstruct that spouse's freedom of marriage. This is because the freedom of marriage includes not only the "freedom to marry," but also the "freedom to dissolve a marriage."

Contractualization and Liberalization ≠ Equalization: Divorce Becomes Easier, but Supporting Measures Fail to Keep Pace

However, 112 Con. C. Jud. 4 was not concerned solely with providing a way out for at-fault spouses trapped in irretrievably broken marriages. The Justices also expressly stated: "To protect the livelihood of the spouse who is without fault or economically disadvantaged, as well as minor children after divorce, comprehensive supporting measures should also be established" (Note 4). In other words, the right to divorce should not be understood merely as the "freedom to divorce," but should also encompass the protection of substantive equality within the marital relationship.

This also means that systems closely connected with divorce—including the distribution of surplus property, claims for alimony, child support for minor children, and damages arising from divorce—should all be comprehensively reviewed and amended in order to truly ensure basic protection for economically disadvantaged spouses and minor children following divorce.

By contrast, the draft amendments proposed by the Executive Yuan make substantial changes only to the alimony system, and the direction of those amendments has already prompted concerns from several civil society organizations (Note 5). Even more regrettably, 112 Con. C. Jud. 4 expressly pointed out that without simultaneously reviewing systems such as surplus property distribution, child support for minor children, and damages arising from divorce, it would be difficult to adequately address the protection needs of economically disadvantaged divorced spouses and minor children. Yet these crucial systems are conspicuously absent from the Executive Yuan's draft.

Although the Executive Yuan's draft seeks to improve the operation of the surplus property distribution system by strengthening obligations to disclose marital property and allowing one spouse to request that the other submit an inventory of property, the substantive effect of these procedural improvements in protecting economically disadvantaged divorced spouses remains quite limited.

We believe that the key to reforming the surplus property distribution system lies not only in information disclosure, but, more importantly, in directly addressing the question of "how pensions should be distributed upon divorce." Under the current provisions of the Civil Code, where spouses are subject to the statutory property regime (Note 6), upon termination of that regime, the remaining property acquired by each spouse during the marriage is calculated after deducting debts incurred during the marriage. The difference between the spouses' respective remaining property is, in principle, distributed equally (Note 7).

The core rationale of this system lies in recognizing the fruits of "social reproduction" within marriage—that is, recognizing that contributions to a marriage are not made solely by the spouse who earns wages, and that housework, child-rearing, and the "invisible contributions" or "labor of love" involved in supporting a spouse's employment likewise constitute an important foundation of marriage.

Contributions within marriage therefore cannot be measured solely by registered ownership or book value. These intangible but genuine forms of labor should receive fair recognition upon divorce. Through the surplus property distribution system, the sacrifices and contributions of the spouse performing domestic labor can receive substantive recognition, preventing divorce from becoming the point at which the economically disadvantaged spouse is left to bear all of the costs.

Invisible Labor: The Systemic Significance of Including Pensions in Surplus Property Distribution

However, the core issue that has genuinely stalled reform is whether "pensions" should be included within the scope of surplus property distribution—specifically, whether pension rights that have not yet been paid because the spouse has not yet retired should count as property acquired during the marriage and be subject to distribution. If so, how should they be calculated?

First, it must be clarified that the reason pensions should be included in surplus property distribution lies not in "when they are received," but in how they are accumulated. The second pillar of Taiwan's pension system, "occupational pensions," essentially represents the deferral of the fruits of a worker's labor during employment into payments made after retirement. The amount received is closely related to salary levels and years of service before retirement and therefore functions, in practical terms, as "deferred compensation for labor."

If one spouse is able to participate steadily in the labor market and accumulate pension rights during the marriage, that ability is often built on the other spouse assuming a greater share of household labor, childcare, and responsibilities for supporting family life. Although those contributions are not directly reflected in salaries or account balances, they substantially reduce the other spouse's costs of participating in the labor market and help create the conditions under which pension rights can be accumulated.

Including pensions in the surplus property distribution system does not mean granting an additional benefit. Rather, it recognizes that pensions, like ordinary wages, represent the accumulated fruits of joint contributions made during the marriage. Such an institutional design can substantively recognize the labor-market costs borne by disadvantaged divorced spouses within marriage and respond to pension inequalities that accumulate over the long term because of unequal distributions of paid employment and family caregiving responsibilities.

For precisely this reason, whether pensions may be included in surplus property distribution is not an entirely unfamiliar or previously unrecognized issue within Taiwan's legal system. In fact, the law has long provided an answer through specific mechanisms: pensions are not inherently "exceptional property" that must be excluded from distribution, but can be—and already have been—treated as property relevant to distribution upon divorce. The issue has never been simply "whether it can be done," but whether the legal system is willing to address the matter consistently.

Taking military personnel, civil servants, and public school teachers as examples, since 2017 the legislature has successively provided in laws governing the retirement and pension systems of civil servants, teachers, political appointees, and military personnel (Note 8) that, where the marriage has continued for a prescribed period, a spouse may upon divorce lawfully claim a share of the other spouse's pension or retirement benefits. From the perspective of legislative design, these pensions have therefore already been regarded as property capable of being distributed upon divorce.

In practice, however, this right is frequently "visible but unattainable."

Visible, But Unattainable? The Judicial Dilemma of Pension Distribution

First, the current system imposes a restriction based on the "principle of reciprocity": distribution of pension benefits may be claimed only where both spouses are covered by the relevant military, civil-service, or public-school pension systems, or where one spouse is a full-time homemaker. In other words, where one spouse is covered by one of these public-sector pension systems and the other is an ordinary employee, the relevant provision may not apply. One reason is that the Labor Pension Act does not expressly provide for pension rights to be included in surplus property distribution. Courts therefore perceive an inequality between the systems and tend to reject such claims.

Even where the parties satisfy the principle of reciprocity and seek distribution of a public-sector pension in conjunction with judicial divorce proceedings before a family court, they may encounter another procedural obstacle. Some family courts dismiss such claims on the ground that they lack jurisdiction to adjudicate public-sector pension rights, requiring the parties to separately institute administrative litigation against the competent authority. This not only makes the proceedings lengthy and complicated, but also substantially raises the threshold for enforcing the right, making it even more difficult for an already disadvantaged spouse to obtain meaningful protection.

A more fundamental problem is that this controversy does not affect only a small minority. According to statistics from the National Development Council, Taiwan's labor force consists of approximately 12 million people, more than 10.5 million of whom participate in labor insurance, accounting for approximately 87% of the labor force (Note 9). In other words, the principal source of economic security in old age for most families is the labor pension system rather than the pension systems for military personnel, civil servants, and public school teachers.

However, under the current legal framework, labor pensions have neither been expressly included in the surplus property distribution system in the same manner as certain public-sector pensions, nor has judicial practice developed a stable consensus supporting their inclusion. As a result, the "majority" that the system should protect most is instead excluded, and whether pensions can be fairly distributed upon divorce remains highly uncertain.

Courts Soften, but the Law Remains a Blank: The Unfinished Business of Pension Reform

For many years, most courts excluded labor pensions from surplus property distribution on the ground that, before a worker retires, a pension constitutes merely an "expectancy" rather than existing property and therefore cannot be distributed. In recent years, however, this position has begun to soften.

In a 2023 judgment (Note 10), the Supreme Court expressly indicated that where a worker already satisfies the requirements for retirement, the pension right may possess a substantial degree of certainty and predictable economic value even if the worker has not yet actually received the pension. Drawing on the institutional purpose of pensions, the property nature of policy value reserves in insurance contracts, and the existing legal framework under which certain public-sector pensions have long been included in property distribution, the Court held that, under such circumstances, a pension is not merely an "expectancy," but may possess substantive property character and may therefore be included in property calculations upon divorce.

Nevertheless, such progress remains highly dependent on the facts of individual cases and the discretion of the presiding judges. As long as the law itself does not clearly regulate whether pension rights constitute surplus property, what portion should be included, and how they should be calculated and distributed, whether such rights can actually be realized will continue to depend on whether courts are willing to adopt a more expansive interpretation, inevitably resulting in significant uncertainty.

We therefore advocate directly addressing this issue at the legislative level by amending the provisions of the Civil Code governing surplus property distribution to expressly and uniformly include all forms of occupational pensions—whether public-sector pensions or labor pensions, so long as they were accumulated during the marriage—within the scope of surplus property distribution. Whether a spouse has already retired and acquired an enforceable claim to pension benefits, or has not yet retired but possesses rights that have become sufficiently concrete and have predictable economic value, pension rights should no longer be treated differently solely because of occupational status.

It is worth noting that even if legislation expressly recognizes that pensions may be included in surplus property distribution, many practical details will still require supporting rules. For example, pension rights are often difficult to calculate precisely at the time of divorce. Public-sector retirement benefits in particular involve numerous variables, including years of service, rank, promotions, and changes to the pension system, making it difficult for courts to obtain sufficient information to make accurate calculations. In practice, competent authorities are often unwilling to provide information concerning an individual's years of service or estimated benefit amounts, making it difficult for courts to accurately calculate the value of distributable property.

Another question is whether pension benefits that have not yet been received should be discounted to present value at the time of divorce. If so, who should make the initial payment? If the matter is not resolved at the time of divorce but instead asserted after actual retirement, the claimant may face the risk that the applicable limitation period has expired and the right has been extinguished. At that stage, whether the claim should be asserted against the employing agency or still calculated as part of the individual's property also requires a systematic legal response.

These problems have already emerged in judicial practice. For precisely this reason, if legislative reform stops at merely adjusting the requirements for divorce without simultaneously reviewing the surplus property distribution system, it will be difficult to adequately respond to the "substantive equality" and "livelihood protection for disadvantaged spouses and minor children" emphasized in the Constitutional Court's judgment.

In conclusion, we argue that if the long-delayed reform of marriage law merely expands the freedom to divorce without accompanying institutional reforms, marriage law will remain in a state of "freedom to divorce, but no substantive protection." This would not only run counter to the emphasis in 112 Con. C. Jud. 4 on "balancing the divorce rights of at-fault spouses within marriage with the livelihood protection of disadvantaged spouses and minor children after divorce," but would also fail to genuinely implement substantive equality and protection of disadvantaged persons. If lawmakers fail to directly address the systemic issues surrounding pensions and surplus property distribution, the movement of marriage law from status to contract will not make the system more free, but instead more unequal.

Notes

1. Taiwan currently recognizes two forms of divorce: consensual divorce and judicial divorce. If the spouses cannot reach an agreement, the spouse seeking divorce may file an action for judicial divorce pursuant to Article 1052 of the Civil Code, but must establish one of the statutory grounds, such as bigamy, adultery, spousal abuse, or malicious abandonment. Alternatively, where circumstances other than the statutory grounds make the marriage difficult to maintain, but those circumstances are attributable to one spouse, only the other spouse may petition for divorce. In other words, only the spouse who is not at fault may petition for divorce. Before 112 Con. C. Jud. 4 was rendered, judicial practice under Article 1052 of the Civil Code developed a passive and compromise-based breakdown theory of judicial divorce: only a spouse who was without fault, or, where both spouses were at fault, the spouse who was less at fault, was entitled to file for divorce.
   
2. Taiwan has approximately 2,500 judicial divorce cases each year. Because the legislative amendments have not yet been completed, family court judges currently must adjudicate individual cases directly on the basis of 112 Con. C. Jud. 4. For related views, see Lin Zhechen and Patty Ten (2025), "Where Are the Supporting Measures for 2,500 Judicial Divorce Cases Each Year? How Can Economically Disadvantaged Spouses Be Protected?"
   
3. For example, comparative legislation demonstrates that modern legal systems frequently relax the grounds for divorce in response to social change. This may include considering whether the judicial divorce provisions of the Civil Code should adopt a separation, or legal separation, system and expressly provide that living separately without a shared household for a substantial period constitutes a ground for judicial divorce. To avoid excessively harsh consequences resulting from more relaxed divorce requirements, foreign legislation may also be considered as a basis for introducing a hardship clause. For example, where maintaining the marriage is necessary for special reasons relating to the interests of minor children born of the marriage, or where divorce would cause extraordinary hardship to the spouse opposing divorce such that continuation of the marriage is necessary, divorce may be denied even though the marriage has broken down, as provided in Article 1568 of the German Civil Code.
   
4. Furthermore, comprehensive supporting measures should be established to protect the livelihood of spouses who are without fault or economically disadvantaged, as well as minor children, following divorce. For example, in addition to Article 1030-1, Paragraph 2 of the Civil Code, lawmakers could consider expressly providing for a reasonable increase in the other spouse's share of surplus property distribution, requiring the at-fault spouse to pay higher alimony, imposing a greater share of child-support obligations for minor children, or increasing liability for damages arising from divorce. Such measures would ensure that the rights and interests of spouses who are without fault or economically disadvantaged, as well as minor children, receive timely and effective legal protection and remedies in judicial divorce proceedings and obtain fair substantive compensation, consistent with the maintenance of legal order and prevailing societal understandings of justice.
   
5. Historically, judicial practice imposed the strict requirement that a spouse claiming alimony must have "fallen into financial difficulty as a result of divorce," making it difficult for divorced spouses to successfully claim alimony in court. The Executive Yuan's draft therefore removes the requirement that alimony be limited to situations in which "one spouse falls into financial difficulty as a result of divorce" and adds circumstances in which "the person's ability to work has diminished or employment opportunities have decreased at the time of divorce." The purpose of the amendment is to characterize alimony as a form of compensation arising from marriage rather than merely an extension of post-divorce support for the disadvantaged spouse, thereby allowing fair evaluation of the contributions of a spouse whose employment capacity or opportunities were reduced because of sacrifices made for the family. However, the Executive Yuan's draft provides that the right to claim alimony is extinguished upon remarriage. Civil society organizations have criticized this provision on the ground that treating remarriage as a basis for extinguishing the right to alimony is inconsistent with the characterization of alimony as "marital compensation."
   
6. Taiwan's matrimonial property regimes include the "statutory property regime" and "contractual property regimes." Contractual property regimes are further divided into the "separation of property regime" and the "community property regime." The right to claim distribution of surplus property arises only under the statutory property regime.
   
7. Under the statutory property regime, each spouse owns his or her respective property, which is classified as "property acquired before marriage" and "property acquired during marriage." During the marriage, each spouse has an obligation to disclose the status of his or her property acquired during marriage to the other. When the statutory property regime terminates—for example, through divorce, the death of one spouse, or a change to another property regime—the remaining property acquired during marriage by each spouse is first calculated. Property acquired through succession or as a gift, consolation money for non-pecuniary loss, and debts are excluded or deducted as required by law. The remaining property acquired during marriage by each spouse is then compared, and the difference is, in principle, divided equally between the spouses as the distribution of surplus property.
   
8. Article 82 of the Act Governing Civil Servants' Retirement, Discharge and Pensions; Article 83 of the Act Governing Retirement, Severance, and Bereavement Compensation for the Teaching and Other Staff Members of Public Schools; Article 34 of the Act Governing the Recompense for the Discharge of Special Political Appointees; and Article 42 of the Act of Military Service for Officers and Non-commissioned Officers of the Armed Forces.
   
9. Bureau of Labor Insurance, Ministry of Labor, statistics for October 2025: https://www.mol.gov.tw/1607/1632/2665/86841/.
   
10. Supreme Court Judgment 112-Tai-Shang-2397.
    

*The full text was published on March 9, 2026, in The News Lens.