What Does the Court Consider When Making Property Settlement Orders?

There are many factors which the Court must consider when determining if it is just and equitable to divide the assets, liabilities and superannuation entitlements of married or de facto couples.

 

When considering how to divide assets, liabilities and superannuation, the Court must consider the following factors:

 

1. The contributions made towards the relationship by the parties, as follows:

a. Initial Contributions, that is, what did each of the parties own when they started living together?

b. Contributions made during the relationship. These fall into the following categories:

i. Financial Contributions – this includes the income of each party during the relationship either directly or indirectly;

ii. Non-Financial Contributions – this includes personal efforts or exertion by a party to acquiring, conserving or improving any property owned by either party (i.e. if one party was a painter, did they use these skills to improve the value of a property?);

iii. Welfare Contributions – this includes care of children (if the parties had children) and/or the homemaker tasks such as cooking and cleaning; and

iv. Special Contributions – this is where a party may have received a lump sum, such as an inheritance or lotto win. Consideration will need to be given to when the funds were received and how the funds were used by the parties.

c. Post-Separation Contributions – what contributions have the parties made towards the assets and liabilities owned by the parties following separation, or to the expenses of the other party or the children following separation.

 

2. The parties’ future needs. Both the Family Law Act 1975, which applies to married couples and the Family Court Act 1997, which applies to de facto couples, contain a comprehensive list of matters which the Court must consider. The most common examples of future needs, which must be considered by the Court, are:

a. The age and health of the parties;

b. The parties’ income, property and financial resources and their physical and mental ability to work;

c. Any care arrangements for children aged under 18 years;

d. The responsibilities of the parties to support any other person (i.e. a new partner or a child with that new partner);

e. Whether the parties are eligible for a pension, allowance or benefit from the Australian (or other) Government or a superannuation fund, and if so, the amount which is being paid;

f. A standard of living that is reasonable in the circumstances;

g. If either party has re-partnered, the financial circumstances relating to that cohabitation; and

h. Any other fact or circumstance which, in the opinion of the Court, requires to be considered for the justice of the case.

 

A list of all of the factors which the Court must consider when determining future needs can be found at http://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/fla1975114/s75.html for married couples or http://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/wa/consol_act/fca1997153/s205zd.html for de facto couples.