When people separate (whether from a marriage or a de facto relationship), they usually need to sort out how to divide their property and debts.
One person may also need financial support from the other, either for themselves in the form of spousal or de facto maintenance (which can arise out of both a marriage or a de facto relationship), or for their child or children, in the form of child support or child maintenance.
If it is safe to do so, it is generally best if you can reach your own agreement with your former spouse or partner. Making your own agreement will save you both money, time and stress. For more information about ways you may be able to reach an agreement without the need for Court action, see Separate smarter.
There are various ways you can make arrangements to divide your finances after separation:
- If you agree on arrangements, you can seek to formalise your agreement by applying for consent orders or making a financial agreement.
- If you cannot agree on some issues, you can use dispute resolution or mediation to help you resolve any issue in dispute.
- If you cannot reach an agreement after dispute resolution, you can apply to the Court for financial orders, including orders relating to the division of property and payment of spouse or de facto partner maintenance.
TIP: Divorce is a completely separate process to financial proceedings.
The following guides from the Attorney-General's Department provide information about finances and debt after separation:
- Property and Financial Agreements and Consent Orders – What You Need To Know
This guide provides information to separating couples about the options for resolving property, financial and superannuation arrangements, from an informal agreement through to filing consent orders with the Court and litigating the matter in court.
- Separating with debt: a guide to your legal options
This guide provides family law and consumer credit law information, options and referral points to assist separating couples to proactively manage debt in the context of relationship breakdown.
When can the Court make financial orders?
The Court has power to make financial orders in relation to marriages (including void marriages) under Part VIII of the Family Law Act 1975.
You can ask the Court to make orders for property settlement or maintenance arising out of a marriage even if you are not yet divorced.
If a Court has made an order that your marriage was a nullity (the technical way of saying, that the marriage was void or that you were not validly married), you can still ask the Court to make financial orders arising out of that void marriage.
De facto relationship
A de facto relationship is defined in section 4AA of the Family Law Act 1975. The law requires that you and your former partner, who may be of the same or opposite sex, had a relationship as a couple living together on a genuine domestic basis.
Before the Court can determine your financial dispute, you must satisfy the Court that you were in a genuine de facto relationship with your former partner which has broken down, and that you:
- have a geographical connection to a participating jurisdiction (which includes each Australian state and territory except Western Australia), and
- meet at least one of the following criteria:
- the period for the de facto relationship was at least two years, and/or
- there is a child in the de facto relationship, and/or
- the relationship is or was registered under a prescribed law of a state or territory, and/or
- one party made significant contributions to the property of the other, and the failure to make an order would result in a serious injustice.
Your relationship is not a de facto relationship if you were legally married to one another or if you are related by family.
You should obtain legal advice about whether your circumstances satisfy the criteria before filing an application.
Different time limits apply for making an application to the Court for financial orders depending on your individual situation.
- If you were married, applications for property adjustment must be made within 12 months of your divorce becoming final.
- If your marriage was declared nullity, your financial applications must be made within 12 months of your decree of nullity being made.
- If you were in a de facto relationship, your applications for property adjustment must be made within two years of the breakdown of your de facto relationship.
If you want to start proceedings out of time, you must ask the Court for leave. This is not always granted.
Time limits do not apply to child support and child maintenance.
NOTE: If you are married and your divorce is not finalised, you can still apply for financial orders.
Considerations in financial matters
There are a number of things you may need to consider when making financial arrangements after separation and before making an application to the Court.
Your respective superannuation interests can be adjusted by ‘splitting’ one or more of them. If you want to adjust superannuation interests, you must do so when you are formalising your financial arrangements. However, it is not mandatory to adjust superannuation interests. For more information, see superannuation.
The Court can deal with the bankruptcy of a party to a marriage or de facto relationship involved in certain family law proceedings. For more information, see bankruptcy.
Financial support for myself (spousal or de facto maintenance)
For information about whether you can get orders requiring your spouse or de facto partner to financially support you, see spousal and de facto maintenance.
Financial support for my child (child support and child maintenance)
For information about getting financial support for your child and children, see child support and child maintenance.
Death of your former spouse or de facto partner
The Court only has jurisdiction to make financial orders if, at the time when the application was filed, both parties to the relevant marriage or de facto relationship were alive. For more information see, death of a party.
How does the Court decide financial cases?
There is no formula used to divide your property and finances. If you are not able to reach an agreement at dispute resolution, your matter may progress to a hearing. No one can tell you exactly what orders a judicial officer will make, but an experienced family lawyer can, in many cases, predict a range of outcomes based on a given fact scenario.
The decision is made after all the evidence is heard and the judicial officer decides what is just and equitable (fair according to the law) based on the unique facts of your case.
The Family Law Act 1975 sets out the general principles which the Court considers when deciding property settlement cases (see sections 79(4) and 75(2) in relation to marriages, and sections 90SM(4) and 90SF(3) in relation to de facto relationships).
The general principles are the same, regardless of whether the parties were in a marriage or a de facto relationship, and are based on:
- the assets and liabilities of you and the other party individually and jointly (i.e. what you own, and what you owe), and what they are worth
- direct financial contributions by each party, such as property you each had when you began to live together, and your wage and salary earnings while you lived together
- indirect financial contributions by each party, such as gifts and inheritances from family members
- non-financial contributions to property, such as renovations to a home, management of investments, or running a business
- contributions to the welfare of the family, such as caring for children and doing housework, and
- each party’s future needs – a court will take into account things like age, health, financial resources, care of children and ability to earn.
The way your assets and debts will be shared between you will depend on the individual circumstances of your family. Your settlement will probably be different from others you may have heard about.
NOTE: You may meet the criteria for Priority Property Pool Cases (PPP Cases) if you are seeking financial orders only, and the net value of the property (excluding superannuation interests) is, or is likely to be, less than $550,000. PPP Cases aim to find the simplest, quickest, and most cost-effective process to finalise the case. For more information see, Priority Property Pool Cases.
You are not required to be represented by a lawyer, or to seek legal advice, before entering into consent orders or applying to the Court, or if you have been served with an application. However, family law is complex, and getting legal advice will help you to better understand your rights and responsibilities.
For information on how to get legal advice, see Legal Help.