Financial Separation refers to the process of dividing and ending the financial ties between you and your ex-partner following the breakdown of a relationship. 

“Property settlement” on the other hand, is a specific part of the financial separation process. It is during the property settlement stage and where one party ought be paying maintenance to another, that our lawyers can help.

Our aim at Rockwell Family Law is to guide you smoothly through the process of a financial separation; establish a firm foundation for your future; assist you to gain your financial independence, and most importantly of all – to set you up for your best future, emotionally and financially.

What is financial separation?

Financial Separation refers to the process of dividing and ending the financial ties between you and your ex-partner following the breakdown of a relationship. This process is guided by the ‘clean break principle’, which is the court’s duty to end financial relations between the parties. The aim of financial separation is to ensure that each party can move forward independently without ongoing financial obligations to each other. However, it’s important to note that this principle does not apply to spousal maintenance payable by one person to another.

Property Settlement, on the other hand, is a specific part of the financial separation process. It involves the division of the parties’ property, assets, and liabilities. This process is governed by section 79 of the Family Law Act. The court considers various factors, such as the financial and non-financial contributions of each party, their future needs, and the need to ensure that the settlement is just and equitable.

In reality, a property settlement agreement is one of the ways to achieve financial separation. However, financial separation also includes other aspects such as spousal maintenance and child support.

The Australian Family Law Act of 1975 and Child Support (Assessment) Act 1989 provides the framework for how a financial separation can be achieved and includes these kep legal concepts or outcomes.:

“Property settlement” which can be achieved informally or formally by way of Consent Orders, a Binding Financial Agreement or if agreement can’t be reached, by the Court making Orders after a hearing.  A phrase you will often hear during a property settlement is “the property pool”.  

“Property Pool” This refers to the total combined assets,liabilities and superannuation of both parties in a relationship as at today. This includes all property, financial resources, and debts that either or both parties have an interest in, regardless of whose name the assets or liabilities are in and most often includes real estate ,vehicles, bank accounts, mortgages, credit cards, shares, investments, superannuation and any business.

“Spousal Maintenance” which is financial support paid by one person to their former spouse or de facto partner after separation or divorce. This is not automatic and is based on the needs of the person seeking support and the other person’s ability to pay.  It is not automatic and paid when one partner can’t meet their reasonable expenses or is unable to support themselves adequately. 

“Child Support” is the financial assistance paid by one parent to the other for the upbringing of children.  The amount of child support is generally determined by the Child Support Agency based on factors such as the income of both parents, the number of children, and the time each parent spends with the children. The obligation to pay child support continues until the child turns 18.

A successful financial separation considers all of these factors, with both parties hopefully coming to agreement. 

Once an agreement is reached, it can be formalised in documents known as Consent Orders, or Binding Financial Agreements (BFA) – both of which can include spousal maintenance – and Child Support Agreements. Only Consent Orders need to be approved by the court (no-one appears in court).

Our aim is to have these negotiations run smoothly in an informative manner, and to avoid the destructive and expensive process of going to court to obtain a court-ordered Financial Order.  

Get advice early in the process: Seeking guidance from a family law expert is a crucial initial step

Your ability to talk openly and honestly with your former partner will greatly help with informed, smooth negotiations towards an amicable agreement.

Having a legal advisor act as your “shield” and negotiator is aimed at helping reduce any escalation of conflict with your former partner, as any points of disagreement can be quickly addressed in an unemotional manner, factual issues resolved, and the process end with a negotiated outcome. This is especially important where there is a power imbalance between you and your ex.

Even if both  parties can negotiate well themselves, an experienced family lawyer will sort out issues they might not have been aware existed, ensuring a fair and equitable division of the assets to you and avoiding future problems.

Understanding the process used to establish property settlement entitlements

The court uses a four-step process in order to assess a person’s property settlement entitlements. This is same process family lawyers use advising you and are adopted in negotiations and mediation. Our aim is to ensure you will receive an outcome within the range the Court would order if it were to resolve any dispute.  

1. Ascertain the property pool

A lawyer assists a client in ascertaining the property pool by identifying and valuing all assets, liabilities, and superannuation interests of both parties involved in the property settlement. This often includes obtaining formal valuations of significant assets such as real estate and businesses, ensuring full and frank disclosure of all financial circumstances and property by each person, and considering any changes in asset values from the date of separation to the date of settlement. The lawyer’s role is crucial in ensuring an accurate representation of the property pool, which forms the basis for a ‘just and equitable’ property settlement.  Your lawyer can assist you at this step even if you prefer to personally negotiate with the other person.

2. Assess Contributions

In most relationships, each person usually makes significant contributions to the property, liabilities and superannuation each has accumulated during the relationship.  Contributions can be financial, non-financial (towards property, liabilities and superannuation).  Other contributions assessed are homemaking and parenting contributions, contributions towards the welfare of the family. Your lawyer will be able to guide you through how each contribution may adjust your overall entitlements at property settlement.

Financial contributions can include:

  • any property, liabilities, superannuation a person had when you first started  living together relationship
  • how each person applied their property and income towards acquiring, conserving and maintaining assets during the relationship and after the relationship
  • Finances each person applied towards the benefit of the family

Non-financial contributions can include:

  • Unpaid work towards acquiring, conserving and maintaining property including unpaid maintenance or improvements.  eg. renovations, repainting or landscaping
  • Homemaker contributions which can include “domestic” duties, cleaning, mowing the lawn, cooking etc
  • Parenting contributions – the time and sacrifices made by a person who might stay home to raise the children, foregoing part or more of their career – these contributions are given equal weight to the other person’s contribution in being the “breadwinner” by going out to work and support the family financially

3. Assess Future needs

At this third step, there is an assessment as to the future needs of each person.  Future needs take into account a variety of factors including each person’s age, health, their income, property, and financial resources and whether one will have primary care of children. Other factors include a personal’s necessary financial commitments,  their physical and mental capacity for appropriate gainful employment. Often it is important to ass each person’s ability to regenerate capital/income in the future. This may adjust the property settlement in favour of a party who has a significantly smaller future ability to regenerate capital, considering this party may be at a financial disadvantage and may need a larger share of the property pool to meet their future needs.  Just as a person who will have the primary care of children will incur the greater financial cost of doing so. 

Your lawyer will help you identify at this step factors that may result in an adjust needing to be made to take into consideration these factors. 

4. Assess whether the proposed outcome is “just and equitable”

Your lawyer will consider a proposed outcome.  They will step back and take an objective view of it and assess whether it is a “just and equitable” division of property and superannuation. 

If you and your ex have already come with proposed Consent Orders or a Binding Financial Agreement, our lawyers can give you independent legal advice as to the advantages and disadvantages to you of entering into the proposed division and whether or not the Court when considering Consent Orders, will likely make the Orders sought. 

When a person can’t financially maintain themselves

If a person can’t adequately maintain themselves or meet their necessary day-to-day living costs, they may be entitled to receive spousal maintenance if the other person has the capacity to pay it. 

Understanding Spousal Maintenance Under Australian Law

After a couple ends their relationship, the court might set up financial support for a period of time for one person which is called spousal maintenance. The court takes into consideration what each party requires for the future, what they can afford, their age, health, and how much they earn.

It’s not just about what one party needs; it’s also about what the other can afford. This can be negotiated before considering going to Court including at mediation.  If you end up in Court, and the need and capacity to pay are assessed such that spousal maintenance is payable, the Court will make an Order – this might be or a specific amount of time, a lump sum payment or that maintenance ends upon cohabitation with a new partner. 

Amicable Separation: Consent Orders and Agreements

In amicable separations, where parties agree on a division of the property pool, Consent Orders and Binding Financial Agreements are the only way to ensure a division is enforceable at law.  They are also the only means of avoiding stamp duty in the instance one person retains the family home and has to refinance the mortgage..

Binding Financial Agreement in particular are versatile, fitting different stages of a relationship and can be entered into before, during or after a relationship.  They allow you to decide at any point before or during your relationship how people can choose to effect a future property settlement and spousal maintenance if the relationship breaks down.   

Consult with legal professionals when setting up these agreements to guarantee that they are clear, comprehensive, and in line with legal requirements so that if needed, they are enforceable.  It is important that any agreement reached between the parties is legal binding so neither party has recourse to re-open the outcome at a later date.

Handling Disagreements in Separation

Several approaches are available when an amicable separation isn’t possible.. 

Negotiation, mediation and arbitration are all ways of staying out of Court yet ensuring any agreement reached can be documented in a way that is legally binding and enforceable.  If you arbitrate, your “award” will be made by the Court as if the court heard the matter.  Where negotiation and mediation fail,  applying to the Court is the last option available. Each of these processes when handled by experienced family lawyers is grounded in principles of fairness f for both parties.

Key Do’s and Don’ts for financial separation

  • Do:
    • Be honest about finances for a fair division.
    • Keep track of asset values and status changes.
    • Seek professional guidance for complex issues.
    • Document all transactions and agreements.
  • Don’t:
    • Delay the settlement process.
    • Secretly hide or move assets.
    • Make informal agreements without legal advice.
    • Ignore the tax and stamp duty implications of asset division.

Common Questions asked during a financial separation process:

What is my partner entitled to in a separation in Australia?

Financial, non-financial, parenting and home-making contributions are assessed, along with the future needs of each person, to decide on an fair division of the property pool. Relevant matters include work in the house and in raising children, as well as work to improve any property. Present your account of contributions and your future needs your lawyer, and they will advise you on what they think is your range of entitlements following the four-step process.

Who pays the mortgage after separation?

You and your former partner may decide which one or that both of you should continue to contribute to the mortgage until property settlement is reached. Your lawyer will provide you with advice on what is fair, considering who contributed more to the property pool, how much is left on the mortgage, whether you remain living there or not, whom wishes to retain the property or whether it is intended to be sold. 

What is a typical percentage division of property in Australia?

The percentage division of property between former partners is not set in stone; it all depends on the many factors outlined above.  Every case is unique and there is no hard and fast rule.  It is likely that if your friend received 40% you will receive something different because you may have different circumstances overall. 

Is my girlfriend entitled to half of my house in Australia?

Not automatically, no.  The whole property pool needs to be considered as do all factors mentioned above before determining any percentage.  That percentage is applied to the overall property pool, not just one asset.  Ask your lawyer for advice if you are worried this will happen. 


Financial separation is an important step towards making a new and independent life after a relationship ends, and it is usually a hard and confusing time.

But with a good and supportive lawyer by your side, the process can proceed smoothly by negotiation and mediation, wholly avoiding becoming embroiled in destructive court proceedings yet grounded in principles of a fair outcome for you.

Call Rockwell Family Law to make your financial separation as straightforward and fair as possible.

We’re here to help. Talk with us today.

Call our office on 1800 450 000 or get in touch for a free chat.

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Meet the Author

Allyson Gagliardi

Allyson holds a Bachelor of Laws and Bachelor of Arts (media and law) from Griffith University. Graduated from the Legal Practice Course at the end of 2000, Bar Practice Course in February 2001 before joining what is now Allen’s that same year.