HOMEProperty and finances after separation
Property and finances after separation
When people separate, they usually need to sort out how to divide their assets (property) and debts. There are various ways this can be done:
1 you and your former spouse or de facto partner can agree on how your property should be divided without any court involvement
2 if you agree on arrangements, you can seek to formalise your agreement by applying for consent orders in the Family Court, or
3 if you cannot reach an agreement, you can apply to a court for financial orders, including orders relating to the division of property and payment of spouse or de facto partner maintenance.
Can I apply to the Family Court or Federal Circuit Court to have my de facto property and money dispute determined?
The Family Court and the Federal Circuit Court can make orders in relation to financial matters following the breakdown of eligible de facto relationships. Previously these courts would generally only make such orders in cases where the parties were married (except in the ACT and NT). Financial disputes between former de facto partners were generally dealt with by state and territory courts, applying the law applicable in that state or territory.
Should superannuation be included in these orders?
The superannuation splitting law treats superannuation as a different type of property. It lets separating couples value their superannuation and split superannuation payments, although this is not mandatory.
How does a court decide how to divide assets and debts?
There is no formula used to divide your property. No one can tell you exactly what orders a judicial officer will make. The decision is made after all the evidence is heard and the judicial officer decides what is just and equitable based on the unique facts of your case.
The Family Law Act 1975 sets out the general principles the court considers when deciding financial disputes after the breakdown of a marriage (see Sections 79(4) and 75(2)) or a de facto relationship (see Sections 90SM(4) and 90SF(3)). The general principles are the same, regardless of whether the parties were in a marriage or a de facto relationship, and are based on:
1 working out what you've got and what you owe, that is your assets and debts and what they are worth
2 looking at the direct financial contributions by each party to the marriage or de facto relationship such as wage and salary earnings
3 looking at indirect financial contributions by each party such as gifts and inheritances from families
4 looking at the non-financial contributions to the marriage or de facto relationship such as caring for children and homemaking, and
5 future requirements – a court will take into account things like age, health, financial resources, care of children and ability to earn.
The way your assets and debts will be shared between you will depend on the individual circumstances of your family. Your settlement will probably be different from others you may have heard about.
Is there a time limit for applications for property adjustment?
If you were married, applications for property adjustment must be made within 12 months of your divorce becoming final.
If you were in a de facto relationship, your applications for property adjustment must be made within 2 years of the breakdown of your de facto relationship.
If you do not apply within these time limits, you will need special permission of a court. This is not always granted.
Bankruptcy in family law matters
The Family Court and Federal Circuit Court can deal with the bankruptcy of a party to a marriage or de facto relationship involved in certain family law proceedings. The impact on parties is complex and legal advice should be obtained as the facts of each case are different.
What is the definition of bankruptcy?
The definition of Bankruptcy under Section 5 of the Bankruptcy Act 1966 is defined as:
a person:
1 against whose estate a sequestration order has been made, or
2 who has become a bankrupt because of a debtor’s petition.
When can the Family Court and Federal Circuit Court deal with bankruptcy?
The Family Court and Federal Circuit Court have jurisdiction in any matter connected with, or arising out of, the bankruptcy of a party to a marriage or de facto relationship in proceedings for:
1 property settlement under Section 79 or 90SM of the Family Law Act 1975, and/or
2 declaration on interest in property under Section 78 or 90SL of the Family Law Act 1975, and/or
3 setting aside property orders under Section 79A or 90SN of the Family Law Act 1975, and/or
4 spouse maintenance under Section 72 of the Family Law Act 1975,
5 de facto partner maintenance under Section 90SE, and/or
6 enforcement of any of the above orders.
Bankruptcy forms
There are nine bankruptcy forms that can be filed. Each one is described below.
1 Bankruptcy Application
Used by an applicant seeking final orders in a bankruptcy case e.g. an application:
1 for issue of a warrant for arrest of a bankrupt or a debtor
2 against the estimate by the trustee of a debt or liability
3 for annulment of a bankruptcy
4 objecting to the appointment of a person as trustee
5 for acceptance of a trustee's resignation
6 for release of a trustee, or
7 an appeal from a decision of a taxing officer.
2 Bankruptcy – Application in a Case
Used to make an application where a case has already been started e.g. an application for injunction:
1 for procedural orders
2 for leave to be heard
3 seeking to discharge a summons, or
4 when final relief has already been granted (the case has been finalised).
3 Bankruptcy - notice of appearance
Used by a person who wishes to:
1 be heard (appear) in the proceedings
2 oppose the orders sought, or
3 take part in an examination.
4 Notice stating grounds of opposition to an application or application in a case
Used to respond to a Bankruptcy - application or Bankruptcy - application in a case.
5 Summons for examination
An order of the Court directed to a relevant or examinable person, to attend the Court at a specified time, to:
1 be examined under oath
2 give evidence concerning the affairs of the bankrupt or debtor spouse, and
3 bring with them and produce at Court any documents listed in a schedule attached to the summons.
6 Application for summons to examine relevant person or examinable person for examination
A creditor or trustee of the bankrupt or debtor party can request the Court to issue a summons to a relevant or examinable person for examination under oath concerning the affairs of a bankrupt or debtor party. This application may be heard in chambers or in the absence of the parties.
7 Notice to creditors of annulment application
Used by the applicant for annulment of a bankruptcy to give notice of application to creditors.
8 Bankruptcy- arrest warrant
Used for the arrest of a bankrupt, where the bankrupt: has without good cause, neglected or failed to comply with:
1 an order of the Court, and/or
2 an obligation under the Bankruptcy Act
and has:
3 concealed property, and/or
4 without permission of the trustee, removed property.
9 Bankruptcy - apprehension warrant
The Court can direct named persons to apprehend a person who:
1 fails to comply with a summons to appear before the Court for examination, and/or
2 fails to appear and report from day to day as required by the Court.
That person may be held in jail until he or she appears before the Court.
Superannuation
This section explains how the law deals with superannuation when couples divide their property after the breakdown of a marriage or de facto relationship.
How does the law treat superannuation?
The superannuation splitting law treats superannuation as a different type of property. It lets separating couples value their superannuation and split superannuation payments, although this is not mandatory. Splitting does not convert it into a cash asset – it is still subject to superannuation laws (for example, it is usually retained until retirement ages are reached).
To do this, you will need to apply for property and financial orders.
Options for splitting superannuation
1 A formal written agreement requires that both you and your partner instruct a lawyer, who must sign a certificate, stating that independent legal advice about the agreement has been given.
2 Seek Consent Orders to split superannuation
3 If you cannot reach an agreement with your former partner, seek a court order to split superannuation.
How do I split my superannuation?
Obtain valuation information
You need to get information to value the superannuation. You should provide the following forms to the trustee of the superannuation fund.
The Superannuation Information Kit provides the information and the forms you need, including:
1 Form 6 Declaration
2 Superannuation Information Request Form, and the
3 Superannuation Information Form
The superannuation fund may charge a fee for providing the information, and this is paid to them when you send the forms.
How is my superannuation valued?
There are different types of superannuation. The superannuation splitting legislation sets out methods for valuing most types of superannuation, but there are exceptions, including:
1 self-managed superannuation funds – they are generally valued with the assistance of an expert such as an accountant
2 where the Attorney-General has approved a fund using a different valuation method.
Decide the method of splitting
Either enter into a formal written agreement or obtain a court order.
You get court orders about the division of property in two ways:
1 If you and your partner have reached an agreement, then an Application for Consent Orders application can be filed in the Family Court, accompanied by a consent order recording the agreement. The orders can then be made in chambers without either of you attending court, or
2 as a result of a court hearing. Even if you start proceedings, you can reach an agreement at any stage and once the orders recording the agreement are made you do not need to attend court further.
What are the steps to split my superannuation?
1 Complete the Superannuation Information Kit
2 File an Initiating Application together with a Financial Statement and Affidavit. Initiating applications can now be electronically filed through the Commonwealth Courts Portal.
3 The other party will file a Response together with a Financial Statement and Affidavit.
The information from the superannuation fund trustee will help you to complete the Court forms. You must disclose all superannuation, even if you do not intend to split superannuation payments.
Child Support
Parents are responsible for the financial support of their child/ren. Services Australia is responsible for administering Australia’s child support scheme. You cannot apply to the Family Court or the Federal Circuit Court for this.
This responsibility is not changed by:
1 separation and divorce
2 where the child live or the amount of time they spend with a parent,
3 the remarriage of one or both parents.
Note: Payments made for the support of your child/ren under the child support laws are known as 'child support'. In some limited circumstances you can apply to the Federal Circuit Court for a departure from a child support assessment made by Services Australia.
What if my child is born before 1 October 1989 or you separated before this date?
If your child/ren were born before 1 October 1989 and you separated before that date, you can apply to the Federal Circuit Court for help in making child maintenance arrangements.
What if my child was born after 1 October 1989 or you separated after this date?
If your child/ren were born after 1 October 1989 or you separated after that date, your child/ren are covered by the Child Support (Registration and Collection) Act 1988 and the Child Support (Assessment) Act 1989 which are administered by Services Australia .
What if you agree about the child support arrangements?
Regardless of when your child/ren was born, if you agree about the child support arrangements, you can make your own arrangements for child support. You do not have to apply to Services Australia or the Federal Circuit Court when making arrangements for child support. You can enter into a private child support agreement and you can also include the agreement in a parenting plan.
If child support payments are not made, can my former partner see the child/ren?
A court considers child support and parenting issues separately. When a court is making a parenting order, the Family Law Act requires it to regard the best interests of the child/ren as the most important consideration. Parents must also use this principle when making parenting plans.
In determining what is in the best interests of the child/ren, a court must consider the benefit of the child/ren having a meaningful relationship with both of the child’s parents.
How is child support calculated by Services Australia?
For further information on child support and how it is calculated, visit the Services Australia website or call on 131 272.
Research to support the cost of raising children?
The Australian Institute of Family Studies have produced a paper titled, A guide to calculating the costs of children , to discuss what it costs Australian families to raise their children.
Spousal Maintenance
The Family Court or Federal Circuit Court deal with two types of spousal maintenance applications:
1 Spouse maintenance is financial support paid by a party to a marriage to their former husband or wife in circumstances where they are unable to adequately support themselves.
2 De facto partner maintenance is financial support paid by a party to a de facto relationship that has broken down to their former de facto partner in circumstances where they are unable to adequately support themselves.
Under the Family Law Act 1975 , a person has a responsibility to financially assist their spouse or former de facto partner, if that person cannot meet their own reasonable expenses from their personal income or assets.
Where the need exists, both parties have an equal duty to support and maintain each other as far as they can. This obligation can continue even after separation and divorce. The extent of the support depends on what the other party can afford to pay.
What does a court consider when making a decision?
The court considers the needs of an applicant and the respondent's capacity to pay. The court considers the following about both of you:
1 your age and health
2 your income, property, and financial resources
3 your ability to work
4 what is a suitable standard of living, and
5 if the marriage has affected your ability to earn an income.
The court also takes into account with whom the children (under 18 years of age or adult children who are disabled) live.
See section 75(2) (married) and section 90SF (de facto) for further information.
Can I apply for spouse maintenance if I was in a de facto relationship?
If you have been in a de facto relationship and are considering making an application to the Court for maintenance orders, you should read the De facto property regime page on the Attorney-General's website. This will give you information about whether or not you are eligible to make such an application.
If you live in Western Australia the law may be different. For more information visit the Family Court of Western Australia's website.
Do I still receive spousal maintenance if I start a new relationship?
You are not entitled to maintenance if you marry another person unless the court otherwise orders (see section 82). If you start a new de facto relationship the court will take into account the financial relationship between you and your new de facto partner when considering whether you are able to support yourself adequately.
Is there a time limit for applications for spouse maintenance?
If you were married, applications for spouse maintenance must be made within 12 months of your divorce becoming final.
If you were in a de facto relationship, your applications for de facto partner maintenance must be made within 2 years of the breakdown of your de facto relationship.
If you do not apply within these time limits, you will need special permission of a court. This is not always granted.
How do I apply for spousal maintenance?
For more information about spousal maintenance arrangements, see the How do I – Apply for Property and Financial orders page which will explain what to do once you have reached agreement, how to file, the application process and the options are available to you.
If you agree about property and finance
Reaching an agreement with the other party offers many advantages, such as:
1 you make your own decisions
2 you greatly reduce the financial and emotional costs of legal proceedings
3 your continuing relationship as parents, if you have children, is likely to work better
4 you are able to move forward and make a new life for yourself, and
5 you may improve communication with your former partner and be better able to resolve disputes in the future.
You should seek legal advice when considering which approach is best for you.
Why settle without going to court?
It saves you time and money if you can reach agreement without going to court. You also know exactly what each of you will get, whereas, by going to court, there is uncertainty waiting for a judicial officer to decide for you. Additionally, long court proceedings can increase stress and add to the pressure that you and your family are under.
See also: dispute resolution.
How do I formalise our agreement?
You can agree on how your property should be divided without any court action. You do this through either:
1 a financial agreement, or
2 an agreement formalised by applying for consent orders in which you ask a court to make orders in the terms of your agreement.
What are financial agreements?
The Family Law Act 1975 provides for parties to a marriage or de facto relationship to enter into a binding legal agreement about the financial arrangements should their marriage or de facto relationship break down. Sometimes people know these agreements as 'prenuptial agreements' but the legal term is 'financial agreements'.
Sections 90B-90KA of the Family Law Act 1975 deal with financial agreements by parties to a marriage. Sections 90UA-90UN apply to financial agreements by de facto couples. The Act only provides for financial agreements between de facto couples if the parties to the relationship were ordinarily resident in New South Wales, Victoria, Queensland, South Australia, Tasmania, the Australian Capital Territory, the Northern Territory or Norfolk Island when the agreement was made.
You can make a financial agreement before, during or after a marriage or de facto relationship. These agreements can cover:
1 financial settlement (including superannuation entitlements) after the breakdown of a marriage or a de facto relationship
2 financial support (maintenance) of one spouse by the other after the breakdown of a marriage or a de facto relationship,
3 any incidental issues.
For a financial agreement to be legally binding, you must both have:
1 signed the agreement, and
2 received independent legal and financial advice before signing.
Can a financial agreement be set aside?
A court can declare the agreement invalid, and set it aside. The situations in which that is possible are provided at Section 90K (married couples) and Section 90UM (de facto couples) of the Family Law Act 1975 .
What are consent orders?
A consent order is a written agreement that is approved by a court. Signing draft consent orders means you agree with the orders and will follow the terms stated in the document. When the consent order is made, it has the same effect as a court order made by a judicial officer after a court hearing.
Consent orders about property and financial orders may deal with:
1 transfer or sale of property,
2 splitting of superannuation,
3 Child maintenance and spousal maintenance.
You and your former partner can apply for consent orders to be made in the Family Court without going to court.
If proceedings have been commenced in the Federal Circuit Court, and you subsequently reach an agreement, you can ask the Court to make orders by consent.
If you don't agree about property and finance
Reaching an agreement with the other party offers many advantages, such as:
1 you make your own decisions
2 you greatly reduce the financial and emotional costs of legal proceedings
3 your continuing relationship as parents, if you have children, is likely to work better
4 you are able to move forward and make a new life for yourself, and
5 you may improve communication with your former partner and be better able to resolve disputes in the future.
6 If you cannot reach an agreement, you may consider applying to a court for orders.
What you should do before you apply to a court
In the Federal Circuit Court of Australia, parties intending to apply for financial orders are encouraged to resolve disputed issues before filing an application.
You should make a genuine effort to resolve the matter by attending family dispute resolution.
What financial orders can you ask for?
You can apply for orders relating to:
1 property – to say how your property, income, financial resources and debts should be shared between you
2 maintenance – to provide financial support for a (former) husband or wife, or (former) de facto partner
3 child support – in certain circumstances (under sections 96 , 116 , 123 or 129 of the Child Support Assessment Act). These applications are generally dealt with by the Federal Circuit Court. You should seek legal advice or contact the Department of Human Services (Child Support) on 131272 before making an application in the Federal Circuit Court. For more information visit the Services Australia (Child Support) website.
Where and how do you apply?
You can apply to the Court most appropriate for your case.
How do I apply for property and financial orders?
What is a property/financial order?
A financial order is a set of orders made by a court relating to the division of property and can include orders for payment of spouse or de facto partner maintenance. A court can make a financial order based on an agreement between the parties (consent orders) or after a court hearing or trial. When a financial order is made, each person affected by the order must follow it. See Complying with financial orders.
The Family Law Act 1975 sets out the general principles the court considers when deciding financial disputes after the breakdown of a marriage (see Sections 79(4) and 75(2) ) or a de facto relationship (see Sections 90SM(4) and 90SF(3) ). These general principles are the same, regardless of whether the parties were in a marriage or a de facto relationship. The way your assets and debts will be shared between you will depend on the individual circumstances of your family. Your settlement will probably be different from others you may have heard about.
You can apply for orders relating to:
1 property – to say how your property, income, financial resources and debts should be shared between you
2 maintenance – to provide financial support for a (former) husband or wife, or (former) de facto partner
3 child support – in certain circumstances (under sections 96, 116, 123 or 129 of the Child Support Assessment Act).
Seeking legal advice
It is important to obtain some independent legal advice in relation to your situation. A lawyer can help you understand your legal rights and responsibilities. They can also explain how the law applies to your case. A lawyer may also be able to help you reach an agreement without going to court. The court is unable to provide legal advice because to do so could seriously compromise the court's ability to impartially determine a case if a person then applies to the court seeking orders.
The Family Relationship Advice Line (FRAL) can help you with free legal advice and information about services available to assist anybody with family relationship issues - call 1800 050 321 (+61 7 3423 6878 if you are overseas). You should advise FRAL that you are seeking legal advice and they will take your details and a lawyer will call you back. FRAL will advise you of a timeframe on the call back, you should advise if it is urgent.
Alternatively, the Australian government funds a range of legal assistance services that may be able to assist you, including Legal Aid Commissions and individual Community Legal Centres, which offer free and low cost advice. Information to assist with finding legal services is available from the Attorney-General's Department website.
Complying with financial orders
In a financial order, a court can order a person to do any of the following:
1 pay money to another person by a certain time
2 transfer or sell property,
3 sign documents.
When a financial order is made, each person bound by the order must follow it.
If a person has refused to obey an order about property or financial support made under the Family Law Act 1975 , your options include:
1 attend dispute resolution
2 get legal advice, and
3 applying to the court for an enforcement order.
When would you apply for enforcement of orders?
Courts do not automatically enforce family law orders, so if you cannot reach an agreement, you may consider applying to a court for orders. You have to tell the Court what the problem is in an application. The Court decides if an order is needed to enforce the existing order. Below are some examples of what you can do if you cannot resolve the issue with your former partner.
You can apply to the Federal Circuit Court. If you have current proceedings in the Family Court, you should apply to the Family Court.
What is the law on enforcement of orders?
The law on enforcement of orders is complicated. You should get legal advice before starting any proceedings to enforce a court order.
The process in the Federal Circuit Court is set out in Part 25B of the Federal Circuit Court Rules 2001 .
What if a person refuses to sign the orders?
The existing orders may provide for the document to be signed on behalf of the person refusing to sign (defaulting person) by an officer of the Court that made the order. If it does, you will need to notify the Court that made the original order to advise that the person has refused to sign the document/s and ask for the relevant officer to sign the document/s. An affidavit is usually required stating the facts. If the order was made by a state or territory court, you generally should contact the registry of that court.
If the orders do not provide for this, you can seek an order under section 106A of the Family Law Act, asking for the original court to appoint a person, usually the Registry Manager of the Court, to sign the document/s in the name of the defaulting party.
How do you seek an order?
You can apply to the Court most appropriate for your case.
The Family Court of Australia and the Federal Circuit Court of Australia are separate independent courts but share jurisdiction in all family law matters and you can apply to either court.
The Family Court deals with more complex matters. These may include, for example if the financial issues in your case involve multiple parties, valuation of complex interests in trust or corporate structures including minority interests, or complex issues concerning superannuation (for example valuation or matters of legal principle).
All other applications should be filed in the Federal Circuit Court. The Federal Circuit Court deals with less complex matters that are likely to be decided quickly.
What is the enforcement process to recover money in Family Law?
1. Obtaining information about the payer
If you are seeking to enforce the order, you may choose to first obtain information about the financial circumstances of the payer (person who has not paid the money). This can be done by one of the following:
giving the payer written notice to provide a Financial Statement within 14 days
applying to the Court for an order for the payer to disclose information or produce copies of documents relevant to the payer's financial affairs.
Once you have sufficient information you can then apply to the court.
2. Apply to the court for one of the enforcement following processes
Enforcement Warrant
You can apply to the Court, without notice to the payer, for an enforcement warrant. The enforcement warrant enables the nominated enforcement officer to seize and sell property of the payer to enforce the warrant.
To apply for an enforcement warrant, you need to file:
1 an enforcement warrant, and
2 an Affidavit in support (stating the facts to support your application).
See Federal Circuit Court Rules 25B.12 and 25B.22 about the information you should include in the affidavit.
Third Party Debt Notice
You can apply to the Court, without notice to the payer or the relevant third party debtor (for example, an employer of the payer), to issue a Third Party Debt Notice. This notice requires a person or organisation (the third party) who it is alleged owes money to the debtor to pay that money to you rather than the debtor (for example, it could be for be wages).
To apply for a Third Party Debt Notice, you need to file:
1 a Third Party Debt Notice, and
2 an Affidavit in support (stating the facts to support your application).
See Federal Circuit Court Rules 25B.12 and 25B.22 about the information you should include in the affidavit.
To serve the Third Party Debt Notice:
If the Court issues a Third Party Debt Notice, you must serve the sealed document on the third party debtor and the payer. The third party debtor must either comply with the notice or may apply to the Court to dispute the liability or seek procedural orders.
Enforcement hearing
You may apply to the Court for an order that the payer attends an enforcement hearing. For more information see the fact sheet Enforcement Hearings. At the enforcement hearing the Court may make orders to enforce the original order including:
1 sequestration of property,
2 receivership. or
3 other appropriate order/s.
Sequestration of property
The Court can order a property to be temporarily placed in the hands of a sequestrator. The sequestrator can:
1 collect rents, takings or profits of a business or prevent persons from entering the property, and
2 pay amounts owing to you under the initial order.
Any person affected by the sequestration order can apply to the Court for procedural orders.
What is receivership?
The Court can appoint a person as receiver of the payer’s income or property. The receiver is then entitled to:
1 receive any income due to the payer from that property, and
2 pay amounts owing to you under the initial order.
It does not give the receiver the power to sell the property. Any person affected by the receivership order can apply to the Court for procedural orders.
