Contribution Types
The Court looks at both financial and non-financial contributions when deciding a divorce property settlement. These contributions can include:
Financial contributions: These include income earned, mortgage repayments, and direct payments toward acquiring or improving property. If both partners worked during the relationship, their wages and financial inputs are considered part of the asset pool.
Non-financial contributions: These are often less visible but equally important. Tasks such as caring for children, maintaining the home, or supporting a partner through study or illness are weighed in. The Court estimates the cost of these contributions by considering how much it would have cost to pay someone else to do the same work.
For instance, if one partner spent time maintaining the home, like repairing the roof or landscaping the garden, these tasks could be valued as part of their contribution to the property settlement after divorce.
Divorce Settlement Examples Australia
Let’s say Jane and John have built up an asset pool worth $1,000,000. This includes their matrimonial home, cars, cash, and superannuation. They also have liabilities, such as a mortgage and credit card debts, which are subtracted from the total asset value.
Their superannuation holdings are added to the asset pool. So, the final number used in their divorce property settlement calculations includes assets minus liabilities plus superannuation.
They were married for 7 years and have one child together. John came into the relationship owning a property, while Jane contributed to the relationship through both income and non-financial support, such as caring for their child and managing the household.
PART A – Identify the asset pool
The total net value of their asset pool is $1,000,000.
PART B – Identify the contributions of the parties
John entered the marriage with significant assets, including a home with equity. Both partners worked and kept their finances mostly separate, but Jane made notable non-financial contributions by caring for their child and running the household.
Taking both financial and non-financial contributions into account, they initially agreed to a 75/25 split in John’s favour. However, considering the length of the relationship and Jane’s unpaid contributions, they adjusted the split to 70/30.
PART C – Consider the future needs of the parties
With Jane taking on primary care of their child, she may have more ongoing financial needs. This can result in a percentage adjustment in her favour to reflect the extra responsibilities she carries post-separation.
PART D – Is this just and equitable?
A settlement that gives each party a fair share of the asset pool is considered just and equitable. While John brought in more assets at the beginning, Jane’s contributions and future needs were balanced in the final division.
The outcome of this property settlement after divorce is a 65/35 split, with John receiving $650,000 and Jane receiving $350,000.
Questions such as who keeps the house or how superannuation is divided are often decided based on practical and financial realities. A divorce property settlement isn’t just about what’s in the bank. It’s about giving each party a fair footing to move forward.
