What is the Average Split in a Divorce Settlement Australia?
When people consider divorce, they often wonder what is the average split in a divorce settlement Australia. While the term “divorce splitting assets” is frequently searched on Google, it’s important to note that you don’t need to be divorced before splitting assets. In fact, it’s recommended that you do it soon after separation. In this article, we’ll explore everything about divorce and super splitting, including factors that influence the average property division in Australian divorce settlements.
Fast Answer
There is no fixed 50/50 rule average split in a divorce settlement here in Australia. Instead, settlements typically range between 55-65% in favor of the financially weaker spouse (often the wife) before legal fees. The final split depends on a court-mandated four step process:
- Asset Assessment: All assets are valued, including property, vehicles, savings, and superannuation, regardless of when they were acquired
- Contribution Evaluation: Both financial (income, property) and non-financial (homemaking, parenting) contributions are considered
- Future Needs Analysis: Factors like age, health, income potential, and childcare responsibilities are assessed
- Practical Implications: The court ensures the final split is fair and workable
Important points:
- You don’t need to wait for divorce to split assets – it’s recommended to do it pretty soon after separation
- Stay at home parents have equal rights to breadwinners
- Longer marriages tend to favor equal distribution regardless of initial contributions
- Superannuation is treated differently and must remain in a super fund until retirement age
- Post-separation windfalls (like lottery wins) may still be included in settlements
The goal is to achieve a fair division based on each case’s unique circumstances rather than applying a one size fits all approach.
Divorce & Splitting Assets
It goes without saying that it’s likely that you and your ex-partner will find the divorce and separation proceedings difficult. You may believe the worst is over once you’ve finalized your divorce. And it is, for the most part. However, you must now consider separating joint assets. This can seem intimidating at first, but after you understand what’s involved, it will appear less scary. We’ve outlined some tips for various scenarios, as well as some examples of how to divide assets if divorced (or separating).
The existence of a “divorce law” system is a popular misunderstanding among Australians. There exist rules regarding divorce, although they are a tiny subset of the Family Law Act 1975 (Cth) (“the Act”), which covers a wide range of issues. The Act contains laws governing marriage, divorce, de facto partnerships, property settlements, guardianship, adoption, and the care of children who are not subject to the State’s child protection system. We can see a jurisdictional basis for that law, which we name “Family Law” informally. For the purposes of this article, we’ll concentrate on and distinguish between the processes involved in filing for divorce and those involved in obtaining a property settlement, whether or not a judicial ruling is required.
No-Fault Divorce
For the first time in Australian law, the Act created a “no-fault divorce” premise in 1975. Only an irreversible breakdown of marriage, as proven by a twelve-month separation immediately preceding the filing of an application for divorce, is grounds for divorce. In other words, a court looks at whether the marriage ended for the following reasons:
- The marriage has broken down for at least 12 months and
- there is no realistic chance of the parties getting back together.
The “divorce test’s” second limb is quite haphazard. The reality is that if one of the parties to the marriage has declared that they do not wish to be in a relationship with the other party by filing for divorce, a court will not intervene and rule otherwise, as long as separation has been established.
What You Need to Know about Separation
As a result, “separation,” as defined by the Act, takes precedence insofar as it serves as a precondition for divorce. Of course, separation isn’t always evident; “on and off” partnerships are prevalent, making it difficult to determine when the separation began and ended. If parties split and subsequently resume cohabitation for three months or less, the Act recognizes that separation happens again, and those two periods of separation may be combined into one single term. So, if a married couple separates for two months, reconciles for three months, and then separates for ten months, the 12-month qualification term has been satisfied within the 15-month total duration.
What If My Ex Is Opposed To Divorce?
When the problem of separation arises between the parties to a marriage and one party objects to a divorce decree being issued, it is required to assess whether the parties continued to live together as a pair over the relevant 12-month period. The following criteria are relevant in answering this question:
- Did the two parties share a room?
- Was there a sexual connection?
- Was one or both of the parties helping the other with household chores?
- Were the parties able to pool their funds?
- Were there any signs of financial reliance?
- Is it true that one party informed the other that the marriage was over?
- Was the split announced to relatives and friends?
- Have the parties notified Centrelink, the Child Support Agency, or any other government agency of their separation for the purpose of receiving financial assistance?
Is it possible to be separated from my partner while still living together?
The Act also recognizes the terrible scenario in which some couples find themselves separated yet unable to “move out” of their marital residence. You and your spouse can be separated yet still live in the same house. It is not necessary for a divorce to take effect if the parties to the marriage no longer live together. The parties are regarded to have split as long as they are no longer living together “as a pair,” taking into account the circumstances mentioned above. As a result, “separation under one roof,” as it is usually referred to, is a viable option for effecting separation. In most cases, corroborative proof will be required to prove the separation. In other words, statements from family or friends who can attest to the fact that you were both separated.
Divorce Application
A party to a marriage can apply for divorce in the Federal Circuit Court of Australia after the two limbs of the “divorce test” are met. If a divorce order is issued, the divorce becomes effective and final one month and one day after the order is issued. In exceptional circumstances, a party might request a shortening of this time period so that a divorce decree can take effect the same day it is issued, but it is advisable to avoid this scenario. The parties can thereafter remarry, but they must first give one month’s notice of their desire to marry. Contact us for a free consultation with one of our experienced solicitors to learn more about whether you are eligible to apply for a divorce, how to apply for a divorce, how much it will cost you, whether you can oppose an application for divorce, and what happens on the day of the divorce hearing, or if you have any questions about the contents of this article.
How Do Assets Get Divided?
It’s crucial to understand that divorce and a property settlement are two separate legal processes. The legal dissolution of a marriage is referred to as a divorce. Following a divorce, a property settlement is the official split of property. Discussions on asset split can take place while the parties are still living together and be finalized before their divorce is finalized, or even while they are still living together (though very rarely in practical terms). Because Australia is an equitable distribution country, net worth is not distributed equitably (i.e. 50/50) as “equal property” in the event of a divorce or death of a spouse. In Australia, property adjustment is computed using a four-step process outlined in section 79 of the Act.
Step 1: Assessing Your Assets
First, the couple’s assets, liabilities, and financial resources are recognized and valued, regardless of whether they were acquired before, during, or after the marriage. Real estate, automobiles, savings, shares, inheritances, compensations, redundancy packages, lottery wins, jewelry, and other real/personal property are all examples of assets. Unless one of the parties possesses superannuation benefits overseas, in which case it is categorized as a financial resource, the parties’ respective superannuation benefits are included in the pool of assets and categorized as an asset. Despite this, superannuation is frequently separated from other assets and analyzed independently. It is frequently divided evenly between the parties, with any required adjustments made as a result, as evidenced in the partition of real estate and immediately available assets. Debts, mortgages, personal, bank, or commercial loans, personal guarantees, taxes responsibilities, and other liabilities are examples of liabilities that one or both parties are financially responsible for. A future pension entitlement, an interest in a fixed or discretionary trust, an anticipated inheritance, long service leave (if likely to be in the form of cash), tax losses, flight points, and other financial resources are examples of financial resources that are not included in the asset pool but provide a future financial benefit to one or both parties.
Step 2: Assessing Each Party’s Contributions
The financial and non-financial contributions of the parties entering the relationship, during the relationship, and after the relationship are analyzed and modifications to the pool are made on a percentage basis once the total net pool has been defined and appraised. The pre-cohabitation contribution is often essential in a short marriage with no children. Financial contributions can include real estate, cars, income, gifts, inheritances, redundancy packages, compensation, dividend payments, and more, and can include direct or indirect contributions to the acquisition, conservation, or improvement of any of the parties or either of their property. Non-financial contributions can include homemaking, parenting, improving and conserving the matrimonial home by one’s own labour (such as repainting, landscaping, or remodeling), and more. It’s worth noting that the above-mentioned contributions can also apply to property that is no longer under the parties’ or either of their control or ownership. If one of the parties to the proceedings has “wasted” assets rather than “contributed” as defined above, such as a considerable amount of matrimonial funds on gambling, modifications can be made in the other party’s favor, as long as the “wastage” is significant in context and can be demonstrated.
The Rights of a Stay-at-Home Parent vs. a Breadwinner
Stay-at-home parents frequently worry that because they made no financial contributions to the marriage, such as contributing to the payment of the house and bills, they will not be entitled to an equal share of the settlement in the event of divorce or separation.
This is not the case; in reality, the court considers the non-financial contributions of this parent, as well as the role of the principal breadwinner, when deciding how assets are divided in an Australian divorce.
The exact distribution of the asset pool is not set in stone, and it may not be as straightforward as a 50-50 split. This is a decision that is made on a case-by-case basis.
Step 3: Estimating Future Requirements
The third stage is to calculate the parties’ “future needs.” This entails considering a variety of issues such as age, health, income and earning capacity, child care and support, the financial circumstances of any new partnership, each party’s financial resources, and other considerations. At this point, the Court evaluates whether any other adjustments to the pool should be made in light of the parties’ future requirements. In situations when a parent’s income and ability to produce income is impacted by the care and support of small children, percent changes are frequently made at this point.
Step 4: Examining the Real-World Consequences
The final step is to think about how the proposed property settlement will work in practice. If the case goes to court, the judge will take a step back and consider whether the outcome of the previous three processes is just and equitable in all the circumstances. Before paying legal fees, most property cases result in a 55 to 65 percent division in favor of the economically weaker spouse, often the wife. Nonetheless, because judicial determination in this subject is discretionary, the outcome of your property settlement will be determined by your actual circumstances.
I Have Won the Lottery! Do I Have To Give Anything To My Ex?
Post-divorce windfalls, such as lottery winnings, will usually be taken into account by the court when deciding on property settlements, and will occasionally be included in the property pool available for distribution.
Farmer v Bramley (2000) included a husband who won $5,000,000 in the lotto 20 months after their divorce. The couple had one child from their marriage, who resided with the mother. The wife was awarded $750,000 by the court because she cared for her husband during their marriage and for their child after they divorced.
Farmer v Bramley clearly exemplifies the ambiguous issue of asset division in an Australian divorce. If you have questions about whether your ex is entitled to a share of the assets you acquired after your divorce, contact JB Solicitors now for legal guidance.
The Relationship’s Duration
Depending on how long a couple has been married, there will be a substantial difference in how assets are divided in a divorce in Australia. Despite the fact that one spouse may have made a considerable financial contribution to the relationship, time erodes their contributions. This essentially indicates that the longer one partner has been the stay-at-home spouse or parent, the higher their right to the total wealth pool will be.
A Word on Superannuation
As previously stated, superannuation is regarded differently in a property settlement than other assets. Other assets can be sold and the proceeds split, but superannuation must be retained in a super fund until you reach retirement age. This means that for a number of years, you may not receive any money.
Superannuation splitting legislation allows separating couples to examine and distribute their superannuation once a relationship ends. After separation, one partner may share the remaining funds in their superannuation fund and make a payment to the other partner’s superannuation fund, according to the legislation.
The Family Law Act treats superannuation as property, although it varies from other types of property in that it is held in trust. When superannuation is split, it is not turned into cash; the super funds remain subject to superannuation legislation and standard release criteria.
You may be eligible for a superannuation split or legally obligated to split your superannuation if you were married or in a de facto relationship and have subsequently separated. According to the Family Law Act, a person is in a “de facto relationship” with another if they are not legally married to each other, are not related by blood, and have a relationship as a “couple living together on a true domestic basis.” A party seeking superannuation orders must have been in a de facto relationship with the other party for at least two years unless the partnership has a kid or children. If there is a child from the partnership or through one of the parties makes a considerable contribution, the two-year limit is waived, and an application for superannuation orders can be made even if the relationship ended before two years.
What Should You Do Now?
Splitting assets following separation or divorce can be complex, but as stated previously it is best to do it sooner rather than later. At Mediations Australia, our focus is on minimizing your legal fees. That’s why we have family lawyers and mediators working collaboratively to ensure your family law dispute has the best chance of early resolution. we have a team of family lawyers and mediators who can assist you in Canberra, Perth, Adelaide, Melbourne, Sydney, and all other locations in Australia. Get legal advice from us today!. Book a free consultation today.
While there’s no fixed “average split” in a divorce settlement Australia, understanding these factors can help you navigate the process and work towards a fair division of assets.
