The act of separating from your partner in Australia is actually quite simple. However, the process of fully separating your life from your ex can be a lot more challenging, particularly when it comes to understanding what belongs to you and what belongs to your ex.
In fact, one of the questions we’re most frequently asked is how many of our clients wonder what they’re entitled to in a separation in Australia.
What am I entitled to in a separation in Australia?
Understanding your rights during separation can help you feel more prepared and informed. So, we’ve pooled our knowledge about separation in Australia to guide you in determining what you may be entitled to. But let’s start with understanding the difference between separation and divorce.
What’s the difference between separation and divorce?
In Australia we sometimes hear ‘separation’ and ‘divorce’ being used interchangeably, but they have quite different legal meanings. Separation simply means that one or both of a couple have decided they no longer want to continue with the relationship and then acts on this decision. It is a legal status, but informal.
There are no legal steps necessary to separate. You can even be separated when you continue to live in the same home, as long as it is very clear that the relationship has ended.
Divorce, on the other hand, is the legal process that formally ends a marriage. It is only final when the divorce order is received from the Court. However, the process of separating and the process of divorcing both require that you undertake similar financial and property settlements.
So what does this mean in terms of your entitlements?
Understanding separation entitlements in Australia?
In Australia, assets are divided according to the regulations set out in the Family Law Act 1975, which formalises property settlement. The overarching requirement when it comes to what you are entitled to upon separation is that assets are divided in a way that is ‘just and equitable’.
Of course, ‘just and equitable’ entitlements will look different in every situation and every separation. But a good starting point is the Court’s five-step approach, which simplifies the process of determining entitlements.
The five-step test of property divisions
1. Just and equitable framework
The first question the Court will consider is whether it’s just and equitable to adjust the parties’ interests in their property. If it decides that it should, then the Court proceeds through the next steps.
2. Identify and value the property
The next step is to identify and value all of the property of the relationship. This could include:
- The family home
- Other real estate
- Bank accounts and investment accounts
- Furniture
- High-value personal property such as jewellery
- Cars and other motor vehicles
- nsurance policies
- Business interests
- Superannuation
- Debts accumulated during the relationship
- nheritances
3. Contributions
Once the full property pool has been identified, the Court will then consider direct and indirect, financial and non-financial contributions of each party to that property pool.
Financial contributions could include income and earnings, gifts and inheritances, and paying for utilities or schooling, for example. Non-financial contributions could include caring for children, housework, cooking, and more.
With a no fault jurisdiction, the courts can now look at the impact of domestic violence on a party.
The Court will also consider the timing of these contributions as well as the length of the relationship and other factors that could impact their weight.
4. Future needs
The Court will also consider the future needs of each party. This means they’ll look at things like the age and health, who looks after children, resources, earning capacity, physical capabilities or limitations, and mental capacity of each party. They’ll also look at things like instances of family violence or other factors that could impact on a party’s ability to care for themselves in the future.
5. Outcome
The final step the Court will take is to consider the practical effect of the proposed entitlements to each party and make sure that the outcome is in fact just and equitable and allows the parties to make a ‘clean break’.
This means that the orders will bring the financial relationship between the parties to an end and will create certainty for the future. If not, the Court will make adjustments to the entitlements to make sure that it meets both of these requirements, and no one can predict a judge’s discretion.
Outcomes, of course, will be highly specific to each couple. You might be entitled to retain certain assets in whole – such as the family home. Or you might need to sell some assets to fairly divide their worth between you and your ex. Again, this will simply depend on how the Court interprets your circumstances in light of the five-step approach above.
FAQs on separation entitlements in Australia
Our separating and divorcing clients often have a flood of questions – which is perfectly understandable. And the more information you have, the better. Below, we answer some of the most common queries about entitlements in Australia.
How long does it take to finalise a separation in Australia?
Separation has no legal formalities. So your separation can be as quick as advising your partner that you wish the relationship to end and then taking an action to effect that separation.
You can also separate but remain living under the same roof, but you do need to be able to prove that you separated. Evidence that you were meaning to separate from your ex could include:
- Sleeping in separate bedrooms
- No longer cook or clean for each other
- No longer attend social functions together
- Telling family and friends that you are separated
Financial separation – or the final division of your property – is an entirely separate process from legal separation. This can take a considerable amount of time in some cases, which is why it is worth starting the process as soon as you have separated from your partner. You do not have to be legally divorced to work through your property division.
Once you are divorced legally, in most cases you will have to initiate any court proceedings for a property division order within 12 months of your divorce. To avoid disputes, there should be clear communication that the relationship has irretrievably broken down.
Do both partners have equal rights to property?
In Australia, property division is not based on an automatic equal split. Instead, the Court will assess your unique circumstances using the five-step test above and decide what is ‘just and equitable’. Each partner will likely receive a portion of the property, but the exact percentage will depend on the factors and their application by the Court.
What happens to superannuation?
The Court certainly considers superannuation to be property for the purpose of financial settlement, and when it’s included, it’s often one of the largest assets in a property pool. Because it’s considered property, it will be split (or not) according to the five-step test. In most states and territories, super will be split according to a percentage that is just and equitable for each person.
However, super won’t always be included in the property pool. Again, it depends on the results of the five-step test.
If we’re separated, is my spouse entitled to my inheritance?
There are no set rules about the inclusion of inheritance in a property pool. Whether your ex will be entitled to your inheritance generally depends on the timing and the intention.
If you receive the inheritance after you are already legally separated, then it’s more likely to be excluded from the property pool. However, if your ex can demonstrate that the expectation of the person providing the inheritance was that it be shared by you and your ex, it may then be included in the property pool regardless of the date of separation.
Will I be entitled to spousal maintenance?
In some situations, you may be entitled to spousal maintenance, particularly if you’re unable to support yourself financially after separation. Determining this is a separate process from property division and will generally require that you show financial need.
Typically one party might be entitled to spousal maintenance if the other has a significantly higher income or where the first wasn’t able to work due to age, health, or parenting responsibilities.
Getting help
Navigating the complexities of property division and separation entitlements can be challenging, but our experienced team is here to help. If you’re wondering what you’re entitled to in a separation in Australia, get in touch. We can help advise you. And with our expert guidance, we can help make the process smoother, faster, and easier from day one.
