What am I entitled to in a separation?

The most important questions you need to answer when you are separating from your partner are;

• what am I entitled to in a separation;
• how the assets will divide;
• what is the percentage of division?

In Australia when a couple separates, there can be a misunderstanding of entitlements when it comes to liabilities and assets including loans, bitcoins, mortgages, and shares. The most prevalent misunderstandings are that assets that are not owned jointly will not be part of the asset pool for division and that all assets will be divided equally.

So, if you are recently divorced or separated and want to know the answer to these questions continue reading. In this article, we are going to discuss the concerns related to a settlement when a couple are separating. We will also who is entitled to what, how the assets are settled and how you can potentially obtain more from a property settlement.

According to law, what am I entitled to in a separation in Australia?

A defined or fixed formula is not used for the determination of assets and liabilities division. The settlement and division vary from case to case and it is not fixed. It is done according to the individual facts of each family law matter and an unbiassed division is performed based on unique circumstances and references. Also, there is no predefined determination about how much property pool you will be given by the court. There is no such thing as a 50/50 automatic split.

To find out more about your question, “what am I entitled to in a separation in Australia” read these five steps taken by the family court when considering your property settlement. The family law courts in Australia apply this 5 step approach when assessing what you are entitled to in divorce settlement or de facto separation.

#1. What defines the property pool

The court will define the property pool by collecting the list of properties and liabilities. A property pool is a collection of all the assets, properties, liabilities whether owned jointly or solely by both partners. For instance, assets include houses, blocks of land, investments, bitcoin, bank accounts, businesses, any vehicle or conveyance, and shares. And liabilities include all types of loans, bank ATM cards, etc. If a partner sells an asset from the pool, it will add back into the property pool as long as such asset can be adequately traced. That is why it is better to get the property settlement done near the time of separation to minimize the risk of assets going missing.

#2. Find out the contribution of each partner in the property pool

After the determination of the property pool, the court finds out the financial contributions of both partners to the property pool. The contributions that both the parties made to the purchase and maintenance of the property. The contributions are of three types; assets owned by both partners before the relationship and the property, liabilities bought during the relationship, and the contributions from both partners after the relationship that is each party has paid since the separation date including loan repayments, credit payments, etc. This does not mean that if one party to the relationship has not been a breadwinner they will get less.

#3. Analyze whether the property settlement should be made or not?

The court then proceeds to find whether it is equitable to divide the property. There may be cases, albeit limited, where there is no need to divide the property pool.

#4. Determine whether it is important to issue orders for future needs?

Then comes the next step in which the court gauges the need for future adjustment for one or both parties. The adjustment for future needs includes the income of both parties, age, earning capacity, health, and brought up of child/children. If the court assesses that the health, age, and earnings are the same for both partners and they are at the same level, the adjustment orders for future needs are not issued.

#5. Measure the practicality of proposed property settlement

The last step is to measure the practical nature of the proposed property settlement. The court decides whether it is fair and just for that specific property settlement to occur. Moreover, a divorce lawyer can assist you in answering your question, “what am I entitled to in a separation in Australia “better than this article can. Every case is unique.

How to perform an equitable calculation for property settlement?

Here are some steps you can take in preparing your family lawyer for an initial consultation.

• List all the assets and liabilities
• Determine the contributions of both parties
• The length of the relationship
• Subtract the liabilities to determine the total property pool
• Determine the future needs of you and your former partner

Based on these steps you can obtain a rough percentage of a property settlement.

Time and requirements for the application of settlement

According to the Family Law Act in Australia, the property settlement approach in both marriage and de facto relationship is quite similar. Though there are some significant differences such as a time limit for the application process. The time to make an application for a property settlement is 1 year in the case of marriage separation. Once the divorce agreement is finalised, you need to submit your application for a property settlement within a year after the divorce.

On the other hand, you have a time limit of 2 years if you were in a de facto relationship. After the end of the relationship, you can apply for the settlement within two years. Moreover, in the case of a de facto relationship, the court proceeds on the property settlement if you satisfy the court with one of the following:

1. Your relationship span was two or more years.
2.  You gave birth to your partner’s child during the relationship.
3. You put significant contributions and support your partner through thick and thin, but the relationship failed due to the conduct of your partner or he/she cheating on you.
4. A legal record of your relationship is available or it was registered under the law of the state.

What is the rule of asset division or property settlement?

As stated previously, there is a very common misconception among people that the property and liabilities are divided among both parties by the so-called mythical 50-50 rule. In other words, the property pool is divided into two halves and both parties separate with 50% each of the pool. The court itself decides the property settlement after assessing all relevant factors, following which the court issues an order that finalizes the settlement.

The most important thing you can do prior to or following separation regardless of whether you were married or in a de facto relationship is to seek legal advice.

FAQs(frequently asked questions )

What are my entitlements when separating in Australia?

Separating from a partner can be a challenging time, and figuring out what you’re entitled to financially can add to the stress. In Australia, the process of dividing assets and liabilities during separation is called property settlement. This ensures a fair and just outcome for both parties, considering each person’s contributions to the relationship.

What’s included in the property pool:

Imagine all the financial assets and debts you and your partner have accumulated throughout your relationship – that’s essentially the property pool. This includes things you might readily think of, like:

• Real estate (house, land)
• Investments (stocks, bonds)
• Superannuation (retirement savings)
• Businesses (sole proprietorships, partnerships)
• Vehicles (cars, motorcycles)

It also includes valuable personal possessions, like jewelry or artwork. Don’t forget to factor in debts or liabilities, such as mortgages, car loans, or credit card debt.

How are assets and debts divided:

The Family Law Act 1975 sets out the guidelines for dividing the property pool. The court doesn’t simply split everything 50/50. Instead, they consider various factors to determine what a “just and equitable” division looks like for your unique situation. Here’s what they might take into account:

• Financial contributions: This includes both direct financial contributions, like who paid for what during the relationship, and indirect contributions. Did one partner stay home to raise children while the other focused on their career? Did someone contribute their skills or labor to renovate the house, increasing its value? These all count.
• Future needs: The court might consider how your future financial situation might look after separation. Factors like age, health, ability to earn income, and who will be caring for children can all play a role.
• Length of the relationship: Generally, the longer you were together, the more weight is given to contributions made during that time.

There’s no one-size-fits-all approach:

Unlike some countries, Australia doesn’t have a set formula for dividing assets. Each case is decided on its own merits. This allows the court to consider the specific circumstances of your relationship and ensure a truly fair outcome.

Getting help with property settlement:

Property settlement can be a complex process, especially if you have significant assets or have difficulty reaching an agreement with your former partner. Here’s where seeking legal advice can be invaluable. An experienced family lawyer can:

• Explain your rights and entitlements under the law.
• Help you gather and value all your assets and liabilities.
• Negotiate a fair settlement with your ex-partner’s lawyer.
• Represent you in court if necessary.

Many community legal centers also offer free or low-cost legal advice on family law matters, including property settlement. Don’t hesitate to reach out for professional guidance during this time.

By understanding the principles of property settlement and seeking legal advice if needed, you can navigate this process with more clarity and confidence, ensuring you receive a fair and just outcome.

Does a husband have to support his wife during separation in Australia?

Australia’s Family Law Act 1975 permits for the possibility of spousal maintenance after separation, meaning a husband may be ordered to financially support his former partner depending on the unique circumstances of their case.

Spousal maintenance orders issued by a court require one party to make regular payments to cover reasonable living expenses of their ex-spouse, when there is a significant disparity in income or resources between both of them. Such orders usually become effective following separation.

Several factors are taken into consideration when determining whether spousal maintenance should be awarded and, if so, the appropriate amount and duration. These factors include:

1. Income and Earning Capacity:

• Current Income: This includes salaries, wages, income from investments, and any government benefits received.
• Future Earning Potential: The court doesn’t just look at the present. They consider age, qualifications, work experience, and future job prospects. For example, a younger spouse with a professional degree might have a higher earning potential than an older spouse with limited work experience, even if their current incomes are similar.
• Impact of Separation on Earning: Did one spouse give up career opportunities to support the other during the marriage? For example, a wife who stayed home to raise children might have a lower earning capacity after separation compared to a husband who focused on his career advancement. 

2. Financial Resources:

• Assets: The court will evaluate the value of all assets owned by each spouse, including real estate, vehicles, investments, and superannuation (retirement savings). 
• Debts and Liabilities: Don’t forget about debts! The court will consider outstanding mortgages, car loans, credit card debt, and other financial obligations. These can affect a person’s ability to pay or receive spousal maintenance.
• Inheritances or Gifts: Any recent inheritances or gifts received by either party might also be considered as part of their overall financial resources.

3. Reasonable Living Expenses:

• Standard of Living During Marriage: This includes housing costs, transportation, food, clothing, entertainment, and any other expenses considered essential to maintain a reasonable standard of living.
• Special Needs: These additional costs will be factored into the equation to ensure both parties can maintain a basic but comfortable lifestyle after separation.
• Location and Cost of Living: The cost of living can vary significantly across different regions in Australia. The court will consider the location where each spouse resides when determining reasonable living expenses.

4. Age and Health:

• Age: A younger spouse might have more time to retrain, re-enter the workforce, and achieve financial self-sufficiency compared to an older spouse nearing retirement.
• Health: A chronic health condition or disability can significantly impact a person’s ability to work full-time or secure employment with a high income.

5. Caregiving Responsibilities:

• Primary Caregiver: If one spouse is the primary caregiver for children or other dependents, their ability to earn an income might be limited. Spousal maintenance can help compensate for the financial strain associated with childcare costs and maintaining a household while managing these responsibilities.
• Impact on Future Earning: The court might consider the long-term impact of caregiving responsibilities on a spouse’s future earning potential.

Note that spousal maintenance orders are not permanent and should be reviewed periodically or when circumstances significantly alter, usually once every few years or whenever circumstances require such review. The court strives to foster financial independence and self-sufficiency over time for both parties involved in an order.

If you are seeking spousal maintenance or are uncertain of your obligations, consulting with a family lawyer or legal aid service would be highly advisable. They can assess your specific situation and recommend the most effective strategy to protect your rights and interests during the separation process.

Who pays bills during separation in Australia?

During a separation in Australia, both parties are generally expected to contribute to the ongoing household and personal expenses based on their financial capabilities and any agreements reached between them. However, the specific arrangements for paying bills can vary depending on the circumstances of each case.

Here are some common scenarios and considerations regarding bill payments during separation:

• Shared residence: If both parties continue to reside in the same property during the separation, they may agree to share the household expenses, such as mortgage or rent payments, utilities, groceries, and other shared costs. This arrangement can help maintain stability and ensure that essential bills are paid while the separation process unfolds.
• Separate residences: If one party moves out during the separation, they may be responsible for their personal living expenses, including rent, utilities, and other costs associated with their new residence. The other party may continue paying the bills for the shared residence, or they may agree to split certain expenses based on their respective financial situations.
• Child-related expenses: If there are children involved, the court may issue orders or the parties may agree on arrangements for sharing expenses related to the children’s care, such as childcare costs, education fees, medical expenses, and extracurricular activities.
• Interim spousal maintenance: In some cases, where there is a significant disparity in income or financial resources, the court may order one party to pay interim spousal maintenance to the other during the separation period. This can help cover living expenses and bills for the lower-earning or financially dependent party.
• Agreements and consent orders: Separating couples can also choose to formalize their arrangements for bill payments through legally binding financial agreements or consent orders. These documents outline the specific responsibilities and obligations of each party regarding expenses and can be enforced by the court if necessary.

Note that when making decisions regarding financial arrangements during divorce and separation, courts prioritize meeting reasonable living expenses for both parties involved and any children that may be present. They may take contributions and future needs into consideration when making decisions related to bill payments and other financial obligations.

If you ever find yourself confused regarding bill payment during separation, seeking legal advice from either a family lawyer or community legal center could prove useful in providing tailored guidance based on your unique circumstances to assist in managing this process more smoothly.

Who pays for a divorce in Australia?

In Australia, the party initiating the divorce proceedings is generally responsible for paying the associated costs, including court fees and legal expenses. However, there are various factors that can influence who ultimately bears the financial burden of a divorce.

• Court fees: The party applying for the divorce (the applicant) is required to pay the court filing fee, which is currently $940 for a divorce application without any other accompanying applications (as of 2023). This fee must be paid when submitting the divorce application to the Federal Circuit and Family Court of Australia.
• Legal fees: If the parties choose to engage legal representation, they will be responsible for paying their respective lawyers’ fees. Legal fees can vary significantly depending on the complexity of the case, the experience of the lawyer, and the amount of work required. Some lawyers may offer fixed-fee packages or unbundled services to help manage costs.
• Shared costs: In certain circumstances, the court may order that the costs of the divorce proceedings be shared between the parties. This can occur when there are contentious issues or disputes that increase the complexity and duration of the case, resulting in higher legal expenses for both parties.
• Property settlement orders: In some cases, the court may include provisions for the payment of divorce costs as part of the overall property settlement orders. This can involve one party being required to contribute to or reimburse the other party’s legal expenses related to the divorce proceedings.
• Legal aid and pro bono services: For individuals with limited financial means, there may be opportunities to access legal aid or pro bono (free) legal services. These services can help mitigate the costs associated with a divorce, although eligibility criteria and availability may vary based on location and individual circumstances.

It’s important to note that the costs of a divorce are separate from any property settlement or spousal maintenance proceedings that may occur as part of the separation process. These additional legal proceedings can incur further expenses, which are typically borne by each party individually or allocated based on court orders or mutual agreements.

If you are considering divorce and have concerns about the associated costs, it’s advisable to consult with a family lawyer or legal aid service. They can provide guidance on managing expenses, exploring cost-effective options, and ensuring that your rights and interests are protected throughout the process.

Who gets to stay in the house during separation in Australia?

In Australia, when a couple separates, the decision of who gets to stay in the family home during the separation period can be a complex and sensitive issue. The court’s primary concern is to ensure the best interests of any children involved and maintain a stable living environment for them. Several factors are considered when determining the living arrangements during separation.

• Children’s best interests: If there are children involved, the court will prioritize their well-being and aim to minimize disruptions to their living situation. The parent who has primary caregiving responsibilities or the one who can provide a more stable and consistent environment for the children may be granted temporary occupancy of the family home.
• Financial contributions: The court will consider the financial contributions made by each party towards acquiring and maintaining the family home. The party who has made significant financial contributions or has a greater ownership stake in the property may have a stronger claim to remain in the residence during the separation.
• Domestic violence considerations: If there are allegations or evidence of domestic violence or abuse within the relationship, the court may grant exclusive occupancy of the family home to the victim and restrict the perpetrator’s access. This is done to ensure the safety and wellbeing of the affected party and any children involved.
• Interim orders: The court can issue interim or temporary orders regarding the living arrangements during the separation period. These orders are intended to maintain the status quo and provide stability while the parties work towards a final property settlement or parenting arrangements.
• Mutual agreements: In some cases, separating couples may reach a mutual agreement regarding who will remain in the family home during the separation period. These agreements can be formalized through consent orders or legally binding financial agreements, which can then be enforced by the court if necessary.
• Alternative arrangements: If neither party can remain in the family home due to financial constraints or other reasons, the court may consider alternative living arrangements, such as one party residing with family or friends, or both parties finding separate rental accommodations until a final property settlement is reached.

Note that decisions regarding living arrangements during separation should not be seen as definitive and could change as circumstances evolve or parties move closer towards reaching an ultimate property settlement agreement.

If the living arrangements of your separation are contentious or unclear, it would be wise to consult a family lawyer or community legal center for legal advice. They can advise on your rights and options while advocating on your behalf for optimal outcome while prioritizing any children involved.

Ultimately, the court strives to ensure that separating couples and their children have access to stable living arrangements during their separation period that meet both individual circumstances and contributions of each case.

What Should You Do Now?

At Mediations Australia, we have a team of family lawyers and mediators who can assist you in Canberra, Perth, Adelaide, Melbourne and all other locations in Australia. We also do international family law matters.