Property settlement on relationship breakdown 

When a marriage or de facto relationship ends, either party may seek a property settlement — a court-ordered adjustment of the property they hold, individually or together, so that the outcome is just and equitable. This article sets out the national framework within which property settlement operates and the structured approach courts use to reach an outcome, before the other articles in this module examine parenting, family violence and de facto eligibility in more depth.

A largely national framework, with one exception

Family law is unusually centralised for an Australian federation. Marriage, divorce, and, in the states that referred the relevant power, parenting and property matters are governed by Commonwealth legislation — principally the Family Law Act 1975 (Cth) — rather than by each state's own law. Most states referred their power over ex-nuptial children and, later, de facto property matters to the Commonwealth, so that a single national scheme applies across those jurisdictions.

Western Australia is the well-known exception. It did not refer the same powers, and instead operates its own family court system, the Family Court of Western Australia, applying its own state family law legislation that closely mirrors the Commonwealth Act in substance and structure. A student encountering a Western Australian fact pattern should not assume the Commonwealth Act applies directly, and should flag that the state framework needs to be checked separately, without needing to state precisely which powers were or were not referred. Everywhere else in Australia, the Commonwealth framework described in this article applies.

Identifying and valuing the property pool

The starting point is to identify the property pool: everything owned by either party, or both together, at the time of the proceedings — real estate, superannuation, businesses, vehicles, savings, and liabilities such as mortgages and debts. Australian courts generally take a global approach, treating the pool as a single fund available for division rather than quarantining assets each party brought into the relationship, although the source and history of an asset remains relevant to contributions.

Assets are valued as at the date of the hearing (or as close to it as practicable), not the date of separation, which matters where property has changed in value since the parties separated. Superannuation is treated as a distinct category of property, capable of being split between the parties, but it is not simply cash and is dealt with under its own rules.

Assessing contributions

The court next assesses each party's contributions to the property pool and to the welfare of the family, across three recognised categories:

• financial contributions — income, capital brought into the relationship, and direct financial input to acquiring, improving or maintaining property;
• non-financial contributions — unpaid work that improves or maintains property, such as renovation or maintenance work; and
• contributions as homemaker and parent — the domestic and parenting role, which Australian law treats as no less valuable than financial contributions to earning income.

Contributions are assessed over the whole relationship, not just its final years, and are weighed as a whole rather than reduced to a precise percentage formula. A long relationship with a genuine division of financial and homemaker roles will often, though not invariably, be treated as a broadly equal contribution-based starting point.

Adjusting for future needs

Having assessed contributions, the court considers whether an adjustment is warranted for future needs — matters such as each party's age and health, income and earning capacity, who has ongoing care of children, and the disparity in financial resources going forward. A party with significantly lower earning capacity or ongoing primary care of young children will often receive an adjustment in their favour beyond a pure contributions-based share.

The just and equitable requirement

Before making any order, the court must be satisfied that it is just and equitable to alter the parties' property interests at all, and that the order it makes achieves that outcome (s 79(2))² — a genuinely separate question, Stanford v Stanford (2012) 247 CLR 108¹ holds, not an automatic consequence of having assessed contributions. This is not a mechanical add-up of percentages; it is an evaluative judgment applied to the parties' particular circumstances, meaning outcomes in different cases with superficially similar facts can differ.

Do not read Stanford as setting a gate. In Bevan & Bevan [2013] FamCAFC 116³ the Full Court held that "the requirement to make an order that is just and equitable permeates the entire decision making process", and that it is "not impermissible to consider it" early where the case requires. It is not a threshold issue.

Applying this in a problem question

1. Confirm which framework applies — the Commonwealth Family Law Act, or Western Australia's own mirroring legislation.
2. Identify the property pool and note valuation issues, including superannuation.
3. Assess financial, non-financial and homemaker/parenting contributions across the whole relationship.
4. Identify any future needs factors that justify an adjustment.
5. State an outcome as an evaluative judgment of what is just and equitable, not a fixed formula.