4 Step Process

The process for determining a property settlement / adjustment can be both a mystery and daunting to those separating or divorcing. In many cases the outcome of the property split can determine the lifestyle people will live in the event they go ahead and separate. To make the process simple we set out the process used by the Court below. It was outlined by the High Court in the decision of Stanford. The steps are as follows:

1. Detemerine The Asset Pool

The first step in the process is to work out the assets and liabilities (including superannuation and any financial resource) in which the parties have an interest, whether that interest is held in sole names, joint names with each other or joint names with anyone else.

The net asset pool is determined by adding up the value of all of the matrimonial assets and deducting the value of all liabilities.

The list of assets includes any interests that either of you have in superannuation or can include any interest either of you may have in any trust. For the purpose of listing assets and liabilities, it makes no difference if those assets or liabilities are held overseas.

2. Is It Just And Equitable To Make An Order?

Whether it is just and equitable for an order to be made effecting the division of property between two people can depend on a great deal of factors including:

  • Whether they have assets and liabilities held in joint names;
  • Whether an order is required to bring the financial relationship of the parties to an end;
  • Whether the parties have intentionally separated.

These are just some of the broad and varied considerations open to the Court when judicially exercising their discretion.

In essence the Court needs to be satisfied that it is appropriate to adjust property between parties before it goes any further.

3. Identify The Contributions Of The Parties

Financial contributions

Financial contributions are relatively self-explanatory and can include:

  • Savings;
  • Wages;
  • Gifts;
  • Inheritances;
  • Compensation payments;
  • Termination payments;
  • Gambling winnings;
  • Proceeds from investments;
  • Any other matter in which finances were derived during the relationship.

The financial contribution is considered relevant even where it contributed to the accumulation, improvement and maintenance of assets that are no longer the property of the parties or part of the list of assets and liabilities.

It is important to remember that this step does not require a detailed assessment of “who paid for what” during a relationship. It might be relevant where one party has intentionally dissipated funds from the relationship, however the Court takes a strict approach on this issue and is unlikely to “add-back” these losses into the pool.

Where one party has made a smaller financial contribution to the relationship, it does not automatically mean that they should be entitled to a smaller portion of the property pool as a result; there are other kinds of contribution that may be considered.

More information on financial contributions

Homemaker & parent contributions

Another kind of contribution concerns the performance of domestic duties throughout the relationship. The quality of the performance of those domestic duties is less important than the fact that they were performed.

The significant factors for this step are:

  • Whether or not those duties were performed full, or part-time;
  • Where there are children of the relationship, the quality of the parenting is less important than simply who performed the functions associated with the raising of the children.

More information on homemaker contributions

Non-financial contributions

Non-financial contributions refer to contributions which were made to increase the value of the net asset pool that were not of a financial nature. An example of such a contribution would be where a house had been extended by the personal efforts of one of the parties and the extension of the house added significant value to it.

Consideration of the parties’ respective contributions usually determines the assessment of overall contributions as a percentage figure. However, it is possible this figure might be adjusted in the next step.

More information on Non-financial Contributions

4. Future Needs

More commonly known as “other factors” or “future needs”, the Court might adjust the parties’ contributions to the relationship after having regard to any of the following (NB: this list is not exhaustive).

  • Income and financial resources of each party.
  • Whether a party will have primary care of a child of the relationship, moving forward.
  • The medical needs of either of the parties or the children.
  • The respective ages of each of the parties.
  • The respective income earning capacities of each of the parties.
  • The obligations of each of the parties to care for any other person.
  • Any other matters the Court considers relevant.

After nearing about the future needs of both parties the Court may make an adjustment to the contributions percentages determined in step 3.

The adjusted percentage is then applied ot the net asset pool from point 1 to determine the dollar figure from the asset pool each party will receive.

More information on property needs and future needs

5. Further Adjustment For Justice And Equity

At the last step of the process, the Court will determine whether or not the final outcome arrived at from the steps identified above is just and equitable, if not, a further adjustment of the parties’ respective “percentages” might be necessary.



Taking the next step and contacting a family lawyer can be scary. Our lawyers will make you feel comfortable so you can talk about your situation. But first, ask yourself, Do I really need a lawyer?


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