When relationships break down, one of the most complex and emotionally charged issues separating couples face is dividing their property and assets. Section 79A of the Family Law Act 1975 provides the framework for property settlements in Australia, but navigating this legal landscape can feel overwhelming. While litigation remains an option, mediation offers a faster, more cost-effective, and less adversarial path to resolving property disputes that allows couples to maintain control over their outcomes.
What is Section 79A of the Family Law Act?
Section 79A of the Family Law Act 1975 establishes the fundamental requirement that courts must follow a specific four-step process when making property settlement orders. This section ensures that property divisions are fair and equitable, taking into account the unique circumstances of each relationship.
The four-step process under Section 79A requires courts to:
- Identify and value the property pool – This includes all assets, liabilities, and financial resources available to both parties
- Assess contributions – Both financial and non-financial contributions made by each party during the relationship
- Consider future needs factors – Circumstances that might affect each party’s ability to support themselves after separation
- Determine if the proposed division is just and equitable – The final check to ensure the outcome is fair in all circumstances
This framework applies not only to married couples but also to de facto relationships that meet certain criteria, including same-sex couples and relationships that have lasted at least two years or involve children.
The Four-Step Process Explained
Step 1: Identifying and Valuing the Property Pool
The first step involves creating a comprehensive inventory of all assets, liabilities, and financial resources. This includes:
Assets:
- Real estate properties (family home, investment properties, overseas property)
- Superannuation funds
- Bank accounts and savings
- Shares and investments
- Motor vehicles
- Personal property and household contents
- Business interests and partnerships
- Life insurance policies with cash value
Liabilities:
- Mortgages and secured loans
- Credit card debts
- Personal loans
- Tax liabilities
- Legal costs
Financial Resources:
- Potential inheritances
- Compensation claims
- Future earning capacity
- Access to family trusts
Accurate valuation is crucial, often requiring professional appraisals for real estate, businesses, or specialist assets. In mediation, couples can work together to obtain joint valuations, reducing costs and potential disputes over asset values.
Step 2: Assessing Contributions
The court examines both parties’ contributions throughout the relationship, which fall into several categories:
Financial Contributions:
- Initial assets brought into the relationship
- Income earned during the relationship
- Gifts and inheritances received
- Loan guarantees or financial assistance from family
- Post-separation contributions to property maintenance or mortgage payments
Non-Financial Contributions:
- Homemaking and domestic duties
- Property maintenance and improvements
- Caring for children
- Supporting a partner’s career or business
- Unpaid work in a family business
Contributions as Parent:
- Child-rearing responsibilities
- Educational and emotional support
- Healthcare and daily care provisions
The Family Law Act recognises that homemaking and childcare contributions are equally valuable to financial contributions. This principle ensures that parents who sacrifice career opportunities to care for children or maintain the household receive fair recognition in property settlements.
Step 3: Future Needs Factors
Section 79(4) of the Family Law Act outlines specific factors courts must consider when assessing each party’s future needs:
- Age and health of both parties
- Income and earning capacity including any reduction due to childcare responsibilities
- Care of children under 18, including who will be the primary carer
- Standard of living during the relationship
- Financial resources available to each party after separation
- Physical and mental capacity to earn income
- Need to protect a party who wishes to continue living in the family home
- Eligibility for pension or allowances
- Duration of the relationship and extent to which it affected earning capacity
- Need to increase a party’s earning capacity through education or training
- Financial circumstances relating to divorce proceedings
- Any other relevant factor
These factors can significantly adjust the property division from an equal split, particularly where there are substantial differences in future earning capacity or ongoing childcare responsibilities.
Step 4: Just and Equitable Assessment
The final step requires an overall assessment of whether the proposed property division is just and equitable considering all circumstances. This holistic review ensures that the outcome serves justice for both parties and any children involved.
Why Mediation is Superior for Property Settlement Disputes
While Section 79A provides the legal framework that guides property settlements, couples don’t need to leave these crucial decisions to a judge. Property Settlement Mediation offers numerous advantages that make it the preferred pathway for resolving property disputes.
Cost-Effectiveness
Litigation can cost tens of thousands of dollars in legal fees, court costs, and expert witness fees. A contested property case that proceeds to trial can easily exceed $50,000-$100,000 per party, not including the emotional and time costs involved. Mediation typically costs a fraction of this amount, allowing couples to preserve more of their joint assets for division rather than spending them on legal fees.
Speed and Efficiency
Court proceedings can take 12-18 months or longer to reach resolution, particularly in the current environment where court lists are heavily congested. During this time, property values may fluctuate, maintenance costs continue, and both parties remain in financial limbo. Mediation can often achieve resolution in weeks or months rather than years, allowing both parties to move forward with their lives and financial planning.
Confidentiality and Privacy
Court proceedings become public records, meaning that financial details, relationship circumstances, and family matters become accessible to anyone. Mediation is conducted in complete confidence, protecting both parties’ privacy and preserving their dignity throughout the process.
Reduced Emotional Stress
Litigation is inherently adversarial, pitting parties against each other and often escalating conflict rather than resolving it. This approach can be particularly damaging where children are involved and ongoing co-parenting relationships are necessary. Mediation focuses on finding mutually acceptable solutions rather than determining winners and losers, preserving relationships and reducing emotional trauma for all family members.
Greater Control Over Outcomes
In court, a judge makes the final decision based on limited evidence and time constraints. The outcome may satisfy neither party. In mediation, couples retain control over the settlement terms and can craft creative solutions that meet their specific needs and circumstances. This might include staged property transfers, shared ongoing ownership arrangements, or non-financial considerations that a court couldn’t order.
Flexibility in Solutions
Courts are limited in the types of orders they can make, typically involving property sales and monetary transfers. Mediation allows for flexible arrangements such as:
- One party remaining in the family home until children reach certain ages
- Shared ownership of investment properties with defined management arrangements
- Deferred property sales to maximise tax benefits
- Creative superannuation splitting arrangements
- Business partnership modifications rather than forced sales
How Mediation Works with Section 79A Principles
Experienced family law mediators understand the Section 79A framework and help couples work through each step systematically:
Property Pool Identification: The mediator facilitates full financial disclosure and helps couples identify all assets, liabilities, and resources that should be included in the settlement.
Contribution Assessment: Rather than arguing about contributions in an adversarial setting, mediation allows couples to acknowledge each other’s contributions openly and work toward fair recognition of both financial and non-financial inputs.
Future Needs Discussion: Mediators help couples consider each party’s future circumstances and needs, encouraging empathetic understanding rather than competitive positioning.
Equitable Solutions: The collaborative nature of mediation often leads to outcomes that both parties consider fair, even if they differ from what a court might order.
When Legal Advice Remains Important
While mediation is the preferred pathway, initial legal consultations can provide valuable clarity about rights and likely court outcomes under Section 79A. This knowledge helps parties enter mediation with realistic expectations and understanding of their legal position. Some couples benefit from:
- Independent legal advice before commencing mediation to understand their rights
- Legal coaching during the mediation process to ensure informed decision-making
- Legal review of any proposed settlement before finalising agreements
However, these legal touchpoints are designed to support the mediation process, not replace it. The goal remains achieving resolution through collaborative negotiation rather than adversarial litigation.
Special Considerations for Complex Cases
Some property settlements involve additional complexities that require specialist attention:
Business Valuations: Family businesses require careful valuation and consideration of ongoing operations, particularly where one party will continue involvement while the other seeks their share of value.
Superannuation Splitting: Superannuation often represents the largest asset after the family home, requiring understanding of splitting arrangements and tax implications.
Overseas Assets: Properties or investments held overseas may involve different legal systems and tax implications.
Family Trusts: Trust structures can complicate property settlements and may require specialist legal advice to navigate effectively.
Even in complex cases, mediation remains beneficial for maintaining relationships and achieving cost-effective outcomes, though parties may need additional professional support.
Moving Forward with Confidence
Understanding Section 79A provides valuable insight into how property settlements work in Australia, but this knowledge becomes most powerful when combined with the collaborative approach that mediation offers. Rather than hoping for the best outcome from a judge who doesn’t know your family’s unique circumstances, mediation allows you to work with your former partner to create solutions that work for both of you and any children involved.
The key to successful property settlement mediation lies in approaching the process with openness, honesty about finances, and willingness to consider each other’s future needs alongside your own. Professional mediators skilled in family law can guide you through the Section 79A framework while maintaining focus on collaborative problem-solving rather than adversarial positioning.
Property settlement doesn’t need to destroy relationships or drain joint assets through lengthy legal battles. Mediation offers a pathway that respects both parties’ dignity while achieving fair outcomes that allow everyone to move forward constructively.
