Property and Financial Issues

Property and Financial Issues After Separation

Legal effects of separation on proprietary and financial relationships between the spouses

As a matter of fact, separation necessitates dealing with a wide spectrum of proprietary and financial issues that stem from and are related to marriage. Specifically speaking, it is usually incumbent on the spouses to handle division of their property (assets) and debts. Australian law prescribes various means by which spouses can accomplish such division. First and foremost, spouses, to the same extent as de facto partners, are entitled to come to an agreement on how the property should be divided without having any recourse to court. Second, if the spouses arrived at a mutually acceptable conclusion, they can formalise their arrangement by filing an application for a consent order in the Family Court. Third, as an alternative, if the spouses are unable to reach a consensual arrangement, they may apply to a court for a financial order, such as the order pertaining to the division of property and payment of spouses or de facto partner maintenance.

Under Australian law, both the Family Court and the Federal Circuit Court are authorised to render orders in relation to financial matters following the breakdown of eligible de facto relationships. In like manner, the aforesaid courts have jurisdiction to make similar orders in cases where the parties are married, not separated. Previously, financial disputes between former de facto partners were usually decided by state and territory courts via the application of the law of the respective state or territory. Talking about superannuation, the superannuation splitting law recognises superannuation as a different group of property. This law allows separating spouses to value their superannuation and split superannuation payments, though such procedure is not mandatory.

As far as the judicial procedure of division of assets of separating spouses is concerned, Australian courts follow no unified standard or formula to divide the property. That is, it is impossible to predict to a reasonable degree of certainty what order will be made by the judge. An Australian justice usually comes to the final conclusion with regard to the property only after all the evidence is presented by the parties. Also, the judge deciding property and financial issues between separating spouses is often guided by the principles of justice, equity and uniqueness of the facts in every case. Moreover, the Family Law Act 1975 prescribes the general principles to be considered by the court when settling financial disputes after the breakdown of a marriage[1] or a de facto relationship.[2] The below general principles are common for both spouses and de facto partners:

  • Assets and debts are based what have been earned and owed by each individual
  • Direct financial contributions by each party, such as salary and wage must be taken into consideration
  • Indirect financial contributions by each party, such as inheritance and gifts, must also be taken into account
  • The court must also evaluate all non-financial contributions, such as homemaking and caring for children
  • Future requirements, such as health, financial resources, ability to earn, or age, must be taken into account by the court.


[1] Family Law Act 1975, Sections 79(4) and 75(2).

[2] Family Law Act 1975, Sections 90SM(4) and 90SF(3).