Q: What is needed if I need to go to Court for Property Settlement

After the asset pool has been identified and the parties’ contributions assessed, it is necessary to consider any ‘adjustments’ that should be taken into account.

The Family Law Act sets out a range of criteria that can be considered depending on the individual circumstances of the parties. The Court has explained that the objective of the section is not to equalise the financial strengths of the parties but to redistribute the property if appropriate.

Relevant factors include:

  • The income, property and financial resources of the parties
  • Any dependants that a party may have, such as caring for a child
  • A responsibility to support another person
  • A reasonable standard of living
  • The overall health of a party
  • The earning capacity of a party in the future including the scope for improvement through additional education or training

An income disparity between parties is a common basis for making an adjustment. The court will also have regard to the future income earning ability of each party. Where one party has the ability to earn income that far exceeds the other party, an adjustment in favour of the party with the limited earning potential is likely. This is especially relevant where one party has contributed to the relationship as a homemaker, where that party may have given up a career or made other sacrifices for the benefit of the family unit. It has been recognised that the most valuable “asset” a party can take out of the marriage is their earning capacity. Such an adjustment can be made even where a party is working and would not be entitled to spousal maintenance.

In other situations, the most significant asset available for division between the parties may be the asset from which one of the parties derives his or her livelihood. This asset could be a small business or property. In this situation, arrangements in the form of an adjustment could be made so that one party is not deprived of the resource through which his or her income is provided.

The court also recognises the importance of caring for children under 18. A variety of factors affecting a child must be considered, including their health, social, financial and education needs. The party responsible for ensuring these needs are met with will often be favoured in the adjustment step.

Generally, adjustments will be assessed as between 10% and 20% with the core basis for adjustments being what is just and equitable. The issue of what is just and equitable will be discussed in more detail next week as the final step in the property division process.

If you would like further information please contact Andrew Crooke a member of our Family Law Team at Murdoch Lawyers on 07 4616 9898.


Prepared by Andrew Crooke

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