If you have separated from your former partner and cannot reach agreement regarding a division of property, you may end up before a Court considering what property division orders should be made.

Most couples undergoing a separation reach agreement regarding the division of their property and never see the inside of a court room. If you reach agreement, you should ensure that it is formalised, either by:

1. orders made by consent and issued by the Federal Circuit and Family Court of Australia (FCFCOA); or
2. signing a binding financial agreement.

Even if you and your former partner reach agreement, it is important to obtain advice about the way in which the FCFCOA determines your property entitlement. This is an important tool in negotiations with your former partner.

If your matter were before the FCFCOA, it is likely to consider:

1. firstly- what assets and liabilities form the asset pool available for division between you and your former partner;
2. next – the financial and non-financial contributions made by you and your former partner. The court determines each party’s percentage entitlement to the property pool based on those contributions; then
3. then – what further adjustment (if any) should be made in favour of you or your former partner based on your “future needs”. The FCFCOA looks to the future and decides whether to make an adjustment based upon any of the matters set out in section 75(2) of the Family Law Act 1975 (FLA).

Future needs factors that may result in an adjustment being made include:

1. Where one party is of advanced years or suffers from some long term or permanent health condition; and
2. Where one party has the ongoing or primary care of children of the relationship; and
3. Where one party has a greater future earning capacity.

Evidence which may be relevant to “future needs” factors includes:

1. Age and state of health of parties.

Possible considerations:-

1. If one party is nearing retirement age, are they likely to retire in the near future or continue working?
2. What is the nature and severity of any illness suffered by a party and is that illness long term or likely to be remedied (if so within what kind of period);
3. Does an illness or health condition of one party effect their ability to care for the children or to earn income?

• Care and control of children of the relationship under 18 years of age.

Possible considerations:-

1. for the party with whom the children live:
   • The number and ages of the children and the number of years before they turn 18;
   • the amount of supervision the children require;
   • How care of the children effects the lifestyle/recreation time of that party and their ability to work;
   • The extent to which child support paid contributes towards the children’s expenses.
2. for the party with whom the children spend time:
   • The amount of time the children spend with that party and the extent to which that relieves the other party of the burden of caring for children or allows them freedom of lifestyle/recreation and to be gainfully employed;
   • The number and ages of the children and the number of years before they turn 18;
   • Whether child support has been paid and the history of payments, including the likelihood of payments continuing in the future;
   • The level of child support payments.

• Earning capacity.

Possible considerations:-

1. the earning capacity of the parties during the relationship;
2. Whether one party’s earning capacity has been affected by the relationship (whether due to caring for children or otherwise);
3. each party’s current income and potential earning capacity;
4. If one party is not working or is not working full time, their capacity to obtain employment or other employment and their expected remuneration in that employment;
5. training or further qualifications a party may need to complete to obtain employment;
6. the likelihood of a party receiving or retaining an income producing asset as part of the property settlement;
7. The size of the property pool to be divided between the parties relative to each party’s income and earning capacity.

What Now?

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