In Australia, there are four legal criteria used to determine a party’s claim to financial assets, which are:
The Asset Pool
All assets owned by the parties, regardless of legal ownership as the property is held, are included in the asset pool for valuation purposes. This includes real estate (including overseas), shares, trust assets, businesses, vehicles, vessels, jewellery, and cash, among others.
The Family Law Act applies to all legal entities, capturing all assets in which the parties have an interest, including those held in a constructive trust. Clients sometimes worry that assets not in their name won’t be considered, but this isn’t the case. Although registered ownership doesn’t determine inclusion in the pool, steps may need to be taken to prevent the sole registered owner from disposing of assets without consent. This is a common issue that we regularly address.
Contributions of Both Parties
Financial and non-financial contributions made by each party during the relationship and towards the property of the relationship are taken into consideration. The law recognises that each party will have brought different amounts of assets and money to the relationship. Generally, the longer the relationship, the less important the assets owned prior to the relationship are. In most cases, for couples who have been in a relationship for 10 years or longer, pre-relationship assets are irrelevant.
Financial contributions, such as earned income and how it was used to support the family, are often considered. However, non-financial contributions, such as raising children and performing home duties, are equally relevant. Usually, there isn’t a significant adjustment in either direction except in cases of short-term relationships with no children, or where one party had substantial assets at the start of the relationship. All factors will be evaluated.
Property Division in family law for current and future circumstances
The factors formerly referred to as “future needs factors” are continually being updated and reformed.
The way property division cases are assessed have changed in 2025 and incorporate key components such as family violence, property wastage, liabilities, housing and pets as explained here.
Family Violence
Section 79 (5)(a) for married couples and section 90SM (5) (a) for de facto couples, it states: –
” …the effect of any family violence, to which one party to the marriage has subjected or exposed the other party, on the current and future circumstances of the other party, including on any of the matters mentioned elsewhere in this subsection.”
This is a relevant consideration where family violence exists and possibly an order by way of protection or apprehended violence order. It clarifies that “economic or financial abuse” is a form of family violence and identifying dowry abuse as an example of conduct that might constitute economic or financial abuse.
Property Wastage
Often clients are upset about their partner having wasted assets during the relationship and post-separation. This factor is cemented in the Act stating that the Court will consider:
“The effect of any material wastage, caused intentionally or rigorously by a party to the marriage, of property or financial resources of either of the parties to the marriage or both of them.”
To summarise, property may be considered wasted where one party has acted recklessly, negligently, or wantonly which has minimised the value of the property pool.
Liabilities
The Court may consider the nature of liabilities incurred during and after the relationship by the parties has ended by both parties or either of them, and the circumstances relating to them. This enables the Court to consider how those liabilities may impact on the financial future of either party.
Housing
Around 50% of divorced couples in Australia have children under the age of 18 years to care for following separation. Housing the family is a clear priority.
When determining a property matter, the Court must consider parents’ need to provide appropriate housing for their children. This is an aspect of property division matters that can be hotly contested when parties have differing borrowing capacity. There is an overall premise that what is in the children’s best interests is paramount so ensuring they have appropriate housing with their primary carer is vital.
Pets
There is a specific framework available to determine the ownership of the family pet in property settlements. Prior to the reform pets were treated like chattels.
Be aware that the Court cannot make orders for joint ownership or any arrangements to share a family pet.
The Court, when determining what order to make about family pets, can consider any animal abuse, including threatening behaviour and the attachment of each party, or children of the relationship to the family pets.
This can be helpful especially if a pet is a companion to a party or child.
Other factors that the court can consider determining an adjustment to a party that are also included, but are not limited to the following: –
- Age and health of parties.
- Who has the primary care of children under the age of 18 years.
- Earning capacity of parties.
- The difference in net income between parties.
- Whether a party has a commitment to care for another person; and
- Any other fact or circumstance.
Disclosure
The duty of disclosure is now elevated to the Act appearing as section 71B of the Family Law Act 1975 (Cth) from the Rules creating an absolute obligation on parties involved in property matters and in court proceedings to provide the other party with copies of relevant financial documents.
This duty is ongoing which means that all separated parties must continually provide all relevant financial information to the other party, and their respective solicitors, until the matter is resolved and ready to be reflected in settlement documents such as Consent Orders.
A “Just and Equitable” Deal
The principle of achieving a “just and equitable” outcome is fundamental in the decision-making process of the Family Court, which considers the specific circumstances of each case. Depending on the situation, one party may require immediate financial support, while another party (with a strong earning capacity) may be entitled to receive assets at a later time. This may include current assets, such as proceeds from the sale of a property, or deferred assets, such as superannuation.
The new amendments to the Act allow the Court to consider a wide range of current and future circumstances and the object is to ensure that with a broad discretion available to the Court parties and their families will reach fair property settlements with the assistance of the law.
