If you have separated and you are trying to work out what happens to the house, the superannuation and the debts, the honest starting point is this: there is no formula.
The Short Answer
Australian law does not begin from a presumption that property is divided in half, and it does not necessarily divide property according to whose name is on the title. A house in one person’s name is not automatically that person’s house. Superannuation held in one person’s fund is not automatically that person’s superannuation at the end of the division.
What the law does instead is ask four questions, in order. What do the two of you own, and what do you owe? What did each of you contribute: in money, and in everything that is not money, including the years of raising children and running a household? Looking forward, what does each of you need, given your age, your health, your income and who is caring for the children? And then, standing back from all of it: is the division being proposed actually a fair one in all the circumstances?
Two things surprise people most often. The first is that superannuation is treated as property and can be split between you, which for many separating couples makes it the largest asset after the family home. The second is that homemaking and parenting are not treated as lesser contributions than earning an income. The law is clear on that point, and it has been for a long time.
Time matters, and this is where many people are caught out. If you are divorced, you have twelve months from the date the divorce takes effect to apply to the court for a property settlement. If you were in a de facto relationship, you have two years from the date it ended. After that, you need the court’s permission, which is not given as a matter of course. It is entirely possible to separate, put the property settlement off, and lose the right to bring one.
An agreement is also not binding merely because it is written down and signed. Until it is formalised: either as consent orders made by the court, or as a financial agreement that satisfies strict statutory requirements, either of you can change your mind, and a court is not bound by whatever you agreed between yourselves.
The rest of this page sets out the law properly, with the sections of the Act and the leading cases, for readers who want that detail. If you would rather talk it through, we are glad to do that instead. Please contact us for an introductory session, and, if you would like, a strategy session, and we can give you some tailored advice.
The Statutory Framework
Property settlement between married parties is governed by section 79 of the Family Law Act 1975 (Cth), and between eligible de facto parties by section 90SM. The two provisions are materially parallel, and the authorities decided under section 79 are generally applied to section 90SM matters.
The Family Law Amendment Act 2024 (Cth) commenced on 10 June 2025 and restructured these provisions. The changes are not cosmetic, and a page which describes the pre-2025 framework as though it were current is describing law that no longer applies:
- New section 79(3) codifies the identification step. The court is to identify the existing legal and equitable rights and interests in the property of the parties, and the existing liabilities, and is then to take into account the considerations in subsections (4) and (5).
- Section 79(4) is now headed ‘considerations relating to contributions’ and contains a new paragraph (ca): the effect of any family violence to which one party has subjected or exposed the other on that other party’s ability to make contributions.
- Section 79(5) consolidates what practitioners knew as the s 75(2) factors, and adds four matters expressly: (a) the effect of family violence on the current and future circumstances of the affected party; (d) the effect of any material wastage of property or financial resources caused intentionally or recklessly by a party; (e) liabilities, including their nature and the circumstances relating to them; and (f) the care of a child under 18, including the need to provide appropriate housing for that child.
- Section 4AB(2)(g) now lists ‘economic or financial abuse’ as an example of behaviour that may constitute family violence, and a new s 4AB(2A) gives a non-exhaustive list of examples of what that means in practice.
The de facto equivalents are ss 90SM(3), (4) and (5).
A practitioner’s observation: The emphasis in s 79(3)(a) on existing legal and equitable interests has narrowed the room for treating property that has already been dissipated as though it remained in the pool. Wastage is now dealt with where it arguably always belonged as a consideration under s 79(5)(d), rather than by notionally adding a figure back to the asset pool (which the recent decision of Shinohara has called into question). The practical consequence is that the identified pool is often smaller than it would have been before June 2025, and the argument moves from the first step to the second and third.
The Four-Step Approach
The structured approach identified in Hickey v Hickey and the Attorney-General for the Commonwealth (Intervener) [2003] FamCA 395 remains the working method by which property matters are resolved (qualified by the High Court case of Stanford), and it survives the 2024 amendments in substance:
- Identification and valuation of the asset pool, including liabilities, superannuation interests and financial resources.
- Assessment of the contributions of each party under s 79(4) – financial contributions, non-financial contributions, and contributions to the welfare of the family including as homemaker and parent – together with the effect of family violence on the capacity to make them.
- Assessment of the current and future circumstances of each party under s 79(5) (for de facto parties, s 90SM(5)), including income and earning capacity, age and health, the care of children, housing needs, liabilities and wastage.
- Consideration of whether the proposed division is just and equitable in all the circumstances.
The fourth step is not a formality. In Stanford v Stanford [2012] HCA 52 the High Court held that the requirement that an order be just and equitable is a threshold question, and that a court may not assume an alteration of property interests is warranted simply because the parties have separated. That principle is now reflected in the structure of s 79 itself.
Identifying the Asset Pool
The pool ordinarily includes real property, bank accounts, shares, motor vehicles, business and company interests, trust entitlements, superannuation and personal effects. Liabilities are deducted. Financial resources which do not constitute property – an interest in a discretionary trust in which a party has no present entitlement, for example – are dealt with at the third step rather than as assets.
Disclosure obligations are continuing, and they are owed to the court rather than merely to the other party. In matters involving corporate structures, self-managed superannuation funds or trusts, the identification exercise is frequently the most contested part of the case, and often the most consequential. A settlement negotiated on an incomplete picture of the pool is a settlement negotiated on the wrong figures. Key legislative provisions are s71B of the Familt Law Act and Rule 6.06 of the Federal Circuit and Family Court of Australia (Family Law) Rules (Cth) 2021.
Contributions, and The Treatment of Initial Assets
Contributions are assessed qualitatively rather than arithmetically. An initial contribution – an asset brought into the relationship, an inheritance, or a gift – is weighed against the length of the relationship and the contributions made subsequently by both parties. The longer the relationship, the more the significance of an initial contribution tends to be diluted, though it is never automatically disregarded.
There is no presumption of equality of contribution. Nor is there any general principle that homemaker contributions are to be valued at a discount to income-earning contributions. The authorities are consistent that both are to be given proper weight.
Family violence as a property consideration
Before the 2024 amendments, the effect of family violence on a property settlement was addressed through the principle in Kennon v Kennon (1997) FLC 92-757, which permitted an adjustment where a party established that violent conduct had made their contributions significantly more arduous. The evidentiary threshold was high and the reasoning often strained.
The amended Act now addresses the consequences of family violence expressly, and in two distinct places: s 79(4)(ca), directed to the effect on a party’s ability to contribute, and s 79(5)(a), directed to the effect on that party’s current and future circumstances. Read with the expanded definition in s 4AB, the financial consequences of violence – lost earning capacity, property damage, economic control, coerced debt – are now matters to be raised directly rather than fitted into a contributions argument.
This is a material change in emphasis rather than a change in outcome in every case. What it removes is the evidentiary contortion the Kennon line of authority sometimes required.
Superannuation
Superannuation is treated as property capable of division under Part VIIIB of the Act. Accumulation interests are ordinarily valued by reference to the member balance. Defined benefit and public sector interests are valued in accordance with the prescribed methods in the Family Law (Superannuation) Regulations, and the resulting figure will frequently differ materially from the balance shown on a member statement.
Where a defined benefit interest is involved, obtaining a properly calculated value at the outset is essential. Settlements negotiated on the basis of a member statement figure have been known to misstate the value of the interest by a substantial margin, in either direction.
Formalising the Outcome
An agreement reached between parties has no effect on their legal rights until it is formalised. There are two mechanisms:
- Consent orders, made by the court under s 79 or s 90SM on application. The court will make them only if satisfied that the orders are just and equitable, so they are not simply rubber-stamped.
- A financial agreement under Part VIIIA or Part VIIIAB, which operates by contract and receives no judicial scrutiny at the time of execution, but which must comply strictly with the statutory formalities.
An informal agreement, even one reduced to writing and signed, leaves both parties exposed. Either may subsequently apply to the court, and the court is not bound by the informal arrangement.
Limitation Periods
Where a divorce order has taken effect, an application for property settlement or spousal maintenance must be instituted within twelve months of the date the divorce order took effect, unless the court grants leave or both parties consent: s 44(3). Leave will not be granted unless the court is satisfied that hardship would otherwise be caused to a party or a child: s 44(4).
For de facto parties, the application must be made within two years after the end of the relationship: s 44(5). Leave to apply outside that period is governed by s 44(6), and again turns on hardship.
The practical point: divorce and property settlement are separate processes, and obtaining the divorce first starts the twelve-month clock. If a property settlement has not been resolved, there is often no advantage in applying for the divorce early, and sometimes a real disadvantage. That sequencing decision should be made deliberately, with advice, rather than by default.
What the process looks like in practice
Most property settlements are resolved by agreement. The court is where matters go when agreement cannot be reached, not where they begin.
| Stage | What happens | Typical timeframe |
| Initial advice | We take instructions, identify the likely pool, and give you a realistic range of outcomes rather than a single number. This advice about the range may change once financial disclosure is exchanged. | One to two weeks |
| Disclosure | Both parties exchange financial documents. This is a duty, not a courtesy, and it continues until the matter is finalised. | Two to four weeks, longer where there is resistance or a corporate structure |
| Valuations | Real property, businesses, and defined benefit superannuation interests are valued by appropriately qualified valuers, ideally jointly instructed. | Four to eight weeks, in parallel with disclosure |
| Negotiation | Offers are exchanged on a without prejudice basis. Where useful, the matter goes to mediation or a round-table conference with counsel. | Two to eight weeks |
| Formalisation | Consent orders are filed, or a financial agreement is drafted and executed. | Two to six weeks; consent orders are then subject to the court’s own timetable |
| If not resolved | An application is filed in the Federal Circuit and Family Court of Australia, and the matter proceeds through the court’s case management pathway. | Commonly twelve to twenty-four months to final hearing |
What Actually Drives the Cost
The single largest cost driver is not the size of the asset pool. It is how contested the first step is. A matter with a house, two superannuation accounts and full disclosure is comparatively economical however large the numbers. A matter with a family trust, a private company, a self-managed fund and a party who discloses reluctantly is expensive because every figure has to be established rather than accepted.
So, what drives the costs?:
- The number of valuations required, and whether they are jointly instructed or duplicated.
- Whether disclosure is provided or has to be compelled.
- Whether a defined benefit interest requires actuarial calculation.
- Whether the other party is legally represented – an unrepresented party frequently increases cost rather than reducing it.
- Whether the matter can be resolved at mediation. Mediation is almost always cheaper than the alternative, even when it fails.
We provide written costs disclosure before we act, and we will tell you at the outset if we think the likely legal cost is disproportionate to what is in dispute.
Contact a property settlement lawyer at Testart today.
