After a divorce or relationship breakdown, couples will likely need a divorce property settlement. A fair settlement is crucial to helping both parties move on. It’s important to note that property matters are separate to the divorce process. This guide clarifies how settlement works and crucial recent amendments.
Key takeaways
Divorce and property settlements are handled through separate processes.
The Federal Circuit and Family Court of Australia uses a four-step process for property orders.
A recent family law amendment has changed how the Court approaches property settlements.
There are a few ways to create a legally binding property settlement.
Divorce and Property Settlement Are Two Different Legal Processes
Some people assume financial matters are handled automatically as part of a divorce application. This isn’t the case. Even though they’re often pursued at the same time, divorce and property settlements are separate processes.
Divorce. The legal dissolution of a marriage. Divorce in Australia is based on a no-fault principle. This means that separating couples only need to show that the marriage has broken down without any chance of reconciliation.
Property settlement. The formal division of a marital asset pool. Settlements can be completed through a private agreement between the parties or a court order.
You don’t need to finalise your divorce to organise your settlement. Many parties begin property proceedings before their divorce is finalised. Once your divorce order is granted, there’s a deadline for beginning financial or property orders, which are the following:
Married couples. Proceedings must begin within 12 months of the divorce order being granted.
De facto relationships. Proceedings must begin within 2 years of the couple’s separation date.
Pursuing a property order after this deadline is possible, but it requires the Court’s permission, which is generally only granted in special circumstances.
The Family Court's Four-Step Process
When you organise your settlement through the Federal Circuit and Family Court of Australia (FCFCOA), your application will be assessed through a four-step process.
Step one: Disclosure and valuation
Both parties are asked to fully disclose their financial position by providing financial documents like bank statements and tax returns. This may include producing financial details on assets and liabilities, such as:
Bank accounts.
Stock portfolios.
Real estate.
Personal debts.
Superannuation.
Business interests.
Financial resources, such as a future inheritance.
The entire property pool must be valued accurately. This may require the help of professionals such as valuation professionals and obtain legal advices.
Step two: Contributions
The Court considers each party’s contributions to the relationship. These could be financial or non-financial.
Financial contributions. Direct financial contributions could be a salary or wages. You may also include indirect financial contributions, such as purchasing assets.
Non-financial contributions. This may cover domestic contributions, such as keeping the home and caring for children.
Step three: Future needs
Spouses often have unequal access to finances during a divorce. To account for that, the Court considers various factors that may impact a person’s future ability to maintain a reasonable standard of living. Relevant factors may include:
Age and health.
Future earning capacity.
Caring responsibilities.
Financial stability.
Step four: Final assessment
The Court will determine if the proposed orders provide a just and equitable outcome for both parties. If it believes that there are issues, it may reject the application.
The 50/50 myth
Some people have the mistaken belief that asset pools are typically split down the middle. However, this is rarely the case. The various contributions of each party and their future needs usually result in divisions leaning towards one party in family law property cases.
Superannuation in a Property Settlement
Superannuation is considered property when it comes to family law matters. However, it’s not a typical asset. A superannuation splitting order can be made as part of a settlement, but the receiving party’s access to the split amount remains subject to superannuation law and the conditions of release of the receiving fund.
Parties should get an accurate valuation of the super interest so it can be divided fairly. However, there are different types of super funds. The valuation method can depend on your fund’s structure. For example:
Retail and industry funds. These generally have a straightforward valuation. The value is usually taken to be the account balance at the valuation date.
Self-managed super fund (SMSF). SMSFs can be complicated. Each asset held in the fund may be valued with the help of a qualified accountant.
Defined benefit fund. A defined benefit interest isn’t influenced solely by a member’s contributions. Retirement benefits are also calculated based on the member’s average income and length of service. Valuations are typically made using an actuary.
Finding superannuation interests
If a party suspects their former partner is hiding a super account, the Court can be asked to order disclosure. If you’re in the process of organising a property settlement through the Court, you may request that the Court obtain the information from the Australian Taxation Office.
The 2025 Family Law Act Changes You Need to Know
The Family Law Amendment Act 2024 was passed on 10 December 2024 and came into effect on 10 June 2025. The amendment makes important changes to how the Court handles property settlement cases.
Family violence
The changes in the amendment include the following:
Clarifying that family violence is a factor that will be considered when determining how to divide property. This will typically impact how the Court considers a party’s future needs and spousal maintenance.
Including ‘economic or financial abuse‘ explicitly in the definition of family violence. Dowry abuse is identified as an example of economic or financial abuse.
Future needs considerations
The list of factors that the Court uses to understand the current and future circumstances of the parties has expanded to encompass the following:
The effect of financial wastage that was intentionally perpetrated by one party.
How the nature and circumstances of any liabilities relate to the future circumstances of the parties.
There’s already a consideration for the care of a child. The amendment expands this factor to include the need for a party to provide housing for the child. The Court may consider if a party still has access to the family home or not.
Further changes
There are changes to the way the Court can handle the care of a companion animal. The amendment defines them as an animal kept primarily for companionship as opposed to an assistance animal.
The amendment seeks to make the settlement process less adversarial. This could include allowing parties to participate in court hearings remotely if there are family violence concerns.
The duty of financial disclosure is now part of the Family Law Act rather than court rules. Lawyers and dispute resolution practitioners now have a duty to inform a client of the importance of disclosure and the potential consequences if they don’t.
How to Formalise a Property Settlement
There are three ways that people can divide their property in a way that’s legally binding.
Consent orders
Parties can agree to use a court order to divide their property. The process begins by submitting an application for consent orders online. There’s a filing fee of $205 as of 1 July 2025. Consent orders are a popular option that is generally more affordable and faster to complete.
From 31 October 2025, a new Central Practice Direction sets out additional formatting requirements for consent order applications, including a signed PDF copy and an unsigned Word (.docx) copy of the proposed orders.
Property orders
If parties can’t agree, they can apply to the Court to determine an appropriate property division. Litigating property matters in court can take a considerable time, and complex cases may take longer to resolve. It can also be very expensive when factoring in court costs and getting legal advice.
Binding financial agreement (BFA)
You can enter a BFA at any time during or after a relationship. As a private agreement, they don’t need to be approved by the Court. However, each party is required to receive independent legal advice. It may include provisions for financial support for the spouse. However, child support is typically handled through a separate process. BFAs typically involve higher legal costs because each party must obtain independent legal advice.
Family dispute resolution
If you have a property settlement dispute with your former partner, it’s a good idea to explore every opportunity to find an agreement. Even if you’re in the middle of litigation, you can still choose to make an agreement at any time. Mediation can be a less costly and faster alternative to litigation in some matters.
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Conclusion
Settling property matters is an important part of the divorce process. There are different ways to organise a settlement, both in and out of the Court. An amendment to the Family Law Act that was implemented in 2025 changed the way settlements are viewed by the Court. Understanding the current state of family law and the options available can help you make informed decisions about your matter.
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This article provides general information only. It is not legal advice. Family law outcomes depend on your circumstances. You should speak with a family lawyer before making decisions about your matter.
