After a separation or divorce, couples can apply to the court for a property settlement if they cannot agree about how they want their assets divided. There is no set rule about how assets are divided in Australia. The court looks at a variety of factors to determine a result that is just and equitable for both parties. A property settlement is not automatic when a divorce is granted.
A divorce order simply ends the marriage; financial orders for the division of assets are made separately. There is a time limit for when a couple can apply for financial orders. Married couples can apply for a property settlement after separation until up to one year after the finalisation of their divorce.
De facto couples can apply for a property settlement up until two years after their date of separation. When the court decides how to divide assets, they do not use any sort of formula. It is difficult to predict the result of a property settlement, even by examining similar past cases, because the court looks at each case individually.
They will look at the value of current assets and liabilities as well as the contributions each party has made to the relationship since it began. These contributions are categorised as direct financial contributions such as income earning, indirect financial contributions such as inheritances, and non-financial contributions such as looking after children and household maintenance. Lastly, the court considers each party’s future needs based on their age, health and income-earning capacity.
The property to be shared between the parties makes up a divisible asset pool. Based on their contributions and future needs, the court makes adjustments to the percentage of the property pool that each party will receive.