Family law · 18 May 2026
The four-step process every Australian family court applies. We walk through it with worked examples, the s79 references, and the catches that come up in real settlements.
When a relationship ends, the property settlement is rarely about a 50/50 split. Australian courts apply a four-step process under section 79 of the Family Law Act 1975, and the answer it produces is usually closer to 55/45, 60/40, or further depending on contributions and future needs.
Australians searching "how is property divided in divorce" often arrive at one of two wrong answers: that everything is split 50/50, or that the higher earner keeps most of it. Neither is correct. The Family Court (and the Federal Circuit and Family Court of Australia, which now handles most cases) applies a four-step process to every property matter, and the percentages it produces are individual to your facts. This guide explains each step, with worked examples and references to the section of the Family Law Act 1975 that governs it.
This is general information. Property settlement outcomes are highly fact-dependent and the law in some areas (notably the 2024 amendments to s79) is still being interpreted. Speak to an admitted family lawyer about your specific matter.
Under section 79 of the Family Law Act 1975 and the High Court’s decision in Stanford v Stanford [2012] HCA 52, the court works through four discrete steps:
The court only proceeds to a property order if step 4 is satisfied. After Stanford, that is no longer assumed — the applicant must show that altering existing property interests is just and equitable in the first place.
Everything you each own and owe goes into the pool, regardless of whose name it’s in. That includes:
Each asset is valued at the date of trial, not the date of separation. That matters: if the family home has appreciated $200,000 since you separated, that increase is in the pool. If superannuation balances have fallen, that fall is shared. This is one of the most contested steps, especially where one party controls a private company or trust and the valuation requires a forensic accountant.
Inheritances received during the relationship are generally in the pool, although the receiving party may argue they should be treated as a sole contribution. Inheritances received after separation are usually excluded, but not always — the court has discretion. Post-separation mortgage payments by one party are treated as a contribution to be accounted for in step 2.
Section 79(4) requires the court to consider:
The court does not run a stopwatch. For a long marriage (15+ years) with similar working/caring patterns, contributions are usually assessed as equal or close to it, regardless of who earned more on paper. For a short marriage, initial contributions (like one party bringing a paid-off house into the relationship) carry significant weight. Contributions during the relationship and after separation both count.
Suppose the net pool is $1.2 million, comprising a $900,000 home (mortgage-free), $200,000 in joint super, and $100,000 in other assets. Both parties worked throughout, one as a teacher and one in trades. They raised three children, with the teacher taking the bulk of school-aged caring duties. In matters of this profile, the court typically finds contributions equal: a starting position of 50/50.
Section 75(2) lists 19 factors the court must consider for "future needs". The big ones are:
This is where the percentage moves. In our 22-year-marriage example, suppose the teacher is 55 with a moderate salary and reduced super, and the tradesperson is 50 earning more with stronger super. The court might add 10% to the teacher’s side for future-needs adjustment, taking the split to roughly 60/40.
A common misconception is that the lower earner "automatically" gets 60%. The adjustment depends on facts. If both parties have similar earning capacities and no children, the future-needs adjustment may be 0%. If one party has primary care of young children and a long career break, the adjustment can be 15-20% or more.
The court stands back and asks whether the percentage produced by steps 1-3 is just and equitable. This is not a fifth maths step — it is a sanity check. The court can adjust the figure if the working produces an outcome that doesn’t reflect overall fairness. In practice, large adjustments at step 4 are rare. Where they happen, it’s usually to account for unique facts — a serious illness, an inheritance arriving mid-trial, or conduct (very narrowly) that bears on the property.
Misconduct generally doesn’t change the property split. The Family Law Act is a no-fault regime. Adultery, who left whom, and bad behaviour in the relationship usually have no bearing on property — only on parenting matters, and only where children’s welfare is affected.
Most property matters settle out of court. The Federal Circuit and Family Court’s 2024 annual report records that approximately 70% of property matters resolve through negotiation, mediation, or consent orders, and never reach a final hearing. Typical timeframes:
Consent orders are the cheapest, fastest, and least adversarial option. They cost most couples $1,500 to $3,500 in legal fees combined, plus a $190 filing fee. A contested matter that runs to trial typically costs each party $40,000 to $120,000, sometimes more.
Get advice early — before you sign anything, move out, or transfer assets. Many family lawyers offer a free or low-cost initial consultation. The key issues to raise:
Australian family lawyers must give you a written costs disclosure under the Legal Profession Uniform Law (or its state equivalent) before they start acting. Read it. Compare it. Ask what the typical total cost looks like for a matter of your complexity.
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