When a relationship ends, dividing property can be one of the most stressful and confusing parts of separation. Many people are surprised to learn that the Family Law Act 1975 (Cth) (FLA) does not set out a single simple formula for who gets what. Instead, the Court applies a structured decision-making process developed over time through both legislation and case law.

The aim is always to reach an outcome that is “just and equitable”, that is, fair to both parties, considering the full story of their financial and non-financial contributions and their current and future circumstances.

Identifying the property pool

The first step is to identify all property, assets and liabilities held by either or both parties. That includes everything from real estate and savings to superannuation, debts and possibly even informal family loans. This forms the property pool that the Court will consider. In recent reforms, the Act makes it clear that liabilities are now formally part of this process, ensuring that debts are recognised alongside assets.

Considering Contributions

The Court looks at each person’s contributions to the relationship. These include:

Importantly, the Court can also consider how family violence may have affected a person’s ability to contribute. For example, if one party’s contributions were made significantly more difficult because of violence or coercion, this may be taken into account in achieving a fair division.

Looking at current and future circumstances

The Court considers what each person needs moving forward. Factors include:

Again, the Court can also consider how the effects of family violence may impact a person’s current or future circumstances. For example, if one party requires ongoing therapeutic support or is unable to work.

The reality is that separation can affect people differently. One party may have reduced earning capacity due to time out of the workforce caring for children, while the other may have greater financial security. The goal is to balance those circumstances fairly.

Deciding what is just and equitable

The Court looks at the overall fairness of the proposed division. Even if the calculations appear balanced, the Court must be satisfied that the practical outcome of the proposed division is just and equitable in the specific circumstances of each case.

That does not mean a 50/50 split; it means an outcome that reflects the genuine contributions and future needs of each party in their particular circumstances.

What this means for you

Every family’s situation is different. The Court’s framework is designed to create structure around decision making, while tailoring solutions around your personal circumstances.

Even when your matter is being resolved through negotiation, mediation or family dispute resolution, lawyers and mediators will often refer back to what a court would likely do in the same situation. That is because the FLA and the case law provides the framework that guides all property settlements, whether inside or outside the courtroom. Even if you reach agreement privately, any consent orders you ask the Court to make must still meet the “just and equitable” test. The Court will not simply “rubber stamp” an agreement; it must be satisfied that the outcome is fair and consistent with the law.

Working within that framework from the start is not just about getting an agreement approved, it is about reaching an arrangement that feels fair, balanced and sustainable for everyone involved, and one that gives you confidence and stability moving forward.

 At Hazel Family Law & Mediation, we help you navigate this process with clarity and care, whether you are negotiating privately, through mediation or before the Court. Our goal is to help you reach a resolution that reflects your contributions, your future needs and above all your wellbeing.