In order to achieve any agreement on property settlements, couples must first work out what their approximate entitlements would be. This is done by anticipating what may be given to each party if the property settlement was determined by a Court. 

In determining property entitlements between separated or divorced couples, the Court will undertake the following steps:

  1. identification of assets
  2. valuation of assets
  3. division of assets according to contribution and future needs (s.79(4) and s.75(2) of the Family Law Act set out factors that the Court may consider in making any orders on property entitlements). 

Generally, the factors (relating to point 3 above) considered by the Court are:

  • financial contributions - such contributions may be direct/indirect in nature towards the children of the marriage and property acquired during marriage
  • non-financial contributions – eg. housework, child care
  • future needs of both parties - eg state of health, earning capacity of each party. 

It is important to note that the Court will assess the pool of assets as a whole and NOT on an asset by asset basis. 

Common misconceptions about property settlements

The following are common misconceptions in relation to property settlements:

  • that property will be divided equally regardless of individual circumstances
  • the owner of an asset will have exclusive rights over the asset
  • the first person leaving the matrimonial home will be penalised financially
  • the division of property is based on whose "fault" it was that the marriage broke up
  • the parent living with the children has the right to live in the home until the children of the marriage are 1 8 years old.

All these ideas are wrong and are NOT used by courts in determining how the assets are to be divided.

Before making any Orders relating to property settlements after a separation or divorce, the Court must consider that the proposed Orders are 'just and equitable.'  There is no exact formula or calculation to apply in determining whether an order is 'just and equitable.' No one can tell you exactly what Orders an officer will make. A decision is made based on the unique facts of your case.

Matters taken into account by the Court in relation to financial orders (s 79(4))

The Court shall take into account the following factors in making orders regarding property settlements:

(a) financial contributions

(b) non-financial contributions made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage:

(i) to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them,

(ii) includes contributions on the last-mentioned property which is no longer the property of the parties to the marriage or either of them

(c) contributions made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent

(d) Effect of any proposed order on:

  • the earning capacity of either party to the marriage
  • a party to the marriage or a child of the marriage
  • any child support under the "Child Support (Assessment) Act 1989 "that a party to the marriage has provided, is to provide, or might be liable to provide in the future"

Matters Taken into account by the Court in relation to spousal maintenance (s 75(2))

This section deals with matters the Court shall consider in relation to spousal maintenance. However, under s.79(4)(d), matters under s.75(2), where relevant, shall be considered by the Court in making property settlements.

(a) age and state of health of each party;

(b) income, property and financial resources of each party and the physical and mental capacity of each of them for appropriate gainful employment

(c) which party has care of a child of the marriage under the age of 18 years

(d) commitments of each party necessary to enable each party to support:

  • himself or herself and
  • a child or another person that the party has a duty to maintain

(e) responsibilities of either party to support any other person;

(f) eligibility of either party for a pension, allowance or benefit under:

  • any law of the Commonwealth, of a State or Territory or of another country; or
  • any superannuation fund or scheme within or outside Australia and _
  • the rate of such pension, allowance or benefit paid to either party;

(g) a standard of living that in all the circumstances is reasonable;

(h) extent to which payment of maintenance to a party would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;

(i) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;

(j) duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;

(k) the need to protect a party who wishes to continue that party’s role as parent if either party is cohabiting with another person-the financial circumstances relating to the cohabitation;

(m) terms of any order made or proposed to be made about property settlement under s.79

(ma) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage

(n) any other circumstances which the court deems necessary to consider.

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