Statistics show that in Australia, as many as one third of relationships end in separation or divorce. With the growth of relationship breakdowns, there has also been a spiralling of misinformation or generalisations when it comes to answering the question of “who gets what” in a property settlement after a divorce or separation.
The truth of the matter is that there are no hard and fast rules or rules of thumb as to which party may get more in the event of relationship breakdown. The reality is that each case is decided on its own facts and will differ from the outcome in the matter before and after it.
Divorce and Separation in Australia – Common misconceptions of who gets what and how
At Damien Greer Lawyers, the most common statements we hear from our clients regarding who gets what in divorce under Australian law include:-
“Everything is split down the middle” – the reality is that there is no 50/50 rule in family law property matters, nor is there any mathematical formula for dividing property between parties. It is very much a discretionary decision that is based on a number of factors that are set out in the Family Law Act.
“Males come off ‘second best’ financially after divorce or separation” – There are websites dedicated to this subject and they help promote this myth. While this may be the case for a few men, repeated studies that compare men and women after divorce show this not to be the case. The research shows that men tend to recover more quickly financially following a divorce or separation but more slowly emotionally. This is probably due to men having been able to continue with their career paths or full time work uninterrupted by child rearing. If men remain in the workforce throughout the whole period of their marriage or relationship, they tend to have a network of employment contacts which enables them to gain salary increases or other employment. The opposite is usually true of females and it is almost wholly due to their having the greater responsibility for child care. Many detrimental economic consequences flow from this circumstance.
“You have to go to Court to get a property settlement” – Again, this is not true. Statistics show that only 5% of those who have a relationship breakdown actually end up in Court. The rest of the matters will resolve by way of consent, most commonly as a result of a mediation, and otherwise by way of solicitor to solicitor negotiations. Once parties have agreed to how they wish to divide their assets by consent, an Application for Consent Orders can be made, and while the Court must review and approve the Orders sought, parties are, in those circumstances, never actually required to step foot through the doors of the Court.
So ‘who gets what’?
The first step in any property matter is for parties to identify the assets, liabilities and superannuation interests that form the property pool. Whether an asset, liability or superannuation interest is in one parties’ name, joint names or held jointly with a third party, at this first step, everything goes into the pool.
Because all parties have an obligation to provide full and frank disclosure to one another, there is usually an exchange of financial documents early on in the piece, which allows each party to understand the net pool with transparency.
The next step involves an assessment of the contributions of each of the parties throughout the relationship, to the net property pool and to the welfare of the family. Contributions can be direct (eg. made by one of the parties’ to the relationship) or indirect (eg. made by one of the parties family members), financial (eg. earning an income) or non-financial (eg. renovations or improvements to a property done by one of the parties) or made as homemaker or parent. Each party’s contribution is assessed as a percentage or a range of percentages.
Next, the current and future financial circumstances of each party are assessed (e.g. by looking at the age and state of health of each party, who will have the primary care of the children moving forward, whether one party has a more substantial earning capacity than the other, the length of the relationship and its effect on each of the parties earning capacities, etc). Adjustments to the percentage arrived at previously can then be made again.
Lastly, the Court will ‘step back’ and assess whether the percentage or division achieved by the application of the above steps is appropriate or ‘just and equitable’ in all of the circumstances of the case.
While seemingly complicated, using a family or divorce lawyer helps to simplify the process. While there are logical steps in the process, there is unfortunately no “one size fits all” outcome and ultimately who gets what after a divorce or separation will be dependent on many different factors.
If you have recently separated and/or you have not yet had a property settlement after separation and are looking to get this underway, we invite you to contact the team at Damien Greer Lawyers on 3837 5500.