Facing a divorce introduces significant emotional strain, as well as complex financial decisions. One common concern is how assets will be divided. What is the average split in a divorce settlement in Australia?

When couples divorce in Australia, they typically split their assets fairly. Most often, the division is around 50-65%, but one party may receive more, such as 70-30%, if they contributed more money or assets prior to the marriage. This approach ensures that both individuals are treated equitably and have sufficient resources to support themselves after the divorce.

This article will guide you towards a fair and equitable divorce settlement, explaining the factors that influence the division of assets.

What Is The Average Split In A Divorce Settlement In Australia? A Quick Answer

In Australia, asset division during a divorce aims to achieve a fair and equitable outcome for both parties. While an average split of 50-65% is common, circumstances can sometimes result in a 70-30 division. The distribution may vary based on several factors.

One significant factor is the financial contributions made by each spouse during the marriage. If one partner brought more assets into the relationship or contributed more financially, they may be entitled to a larger share of the marital assets. Additionally, non-financial contributions, such as caring for children or supporting a spouse’s career advancement, can also be taken into account. If one partner made substantial sacrifices to enable the other’s professional success, this may be reflected in the asset division.

Trust the Experts for Your Divorce Settlement in Australia

Going through a divorce settlement can feel overwhelming, but having the right legal team can make a huge difference. At Johnsons Law Group, our experienced lawyers focus on handling your asset division with care and fairness. With a deep understanding of Australian family law, we are dedicated to helping you secure a settlement that safeguards your financial future.

Don’t go through this challenging time alone; let us help you achieve the best possible outcome. For a consultation, call us on 02 9600 7277 or visit our contact us page today.

How Are Assets Divided in a Divorce Settlement in Australia?

Australian law seeks a fair and equitable distribution. It focuses not just on the assets owned but also on the contributions of each party and their future needs. Here are the steps in determining how assets are divided in a divorce settlement:

Assessing Asset Values

The initial step in any divorce settlement involves a thorough listing and assessment of all assets. This includes those acquired before, during or after the marriage. Anything of value counts as an asset. This category covers:

• Inherited items
• Severance packages
• Lottery prizes
• Jewellery
• Real property
• Vehicles
• Bank savings
• Investment stocks
• Other tangible or intangible properties.

In addition to these assets, superannuation or retirement plan funds are also significant. These funds are usually evaluated separately from other assets due to their intended purpose for post-retirement life. But if a partner’s superannuation is held overseas, it’s considered a financial resource rather than a direct asset. 

Liabilities are equally crucial in determining how assets are divided. These financial obligations include:

• Vehicle financing
• Credit card debts
• Home mortgages
• Personal and bank loans
• Loans against property
• General debts
• Tax dues

Each liability is accounted for to come up with a fair and equitable asset division that offset the total value of the assets. This evaluation helps paint a full picture of the financial standing of both parties, which is essential for arriving at a fair settlement.

Evaluating the Contributions of Each Party

Evaluating each party’s contributions involves a holistic view of their roles throughout the marriage. This evaluation extends beyond financial contributions. It covers domestic efforts, career sacrifices for family welfare and support provided for the other’s career. 

Legal frameworks in Australia recognise these diverse contributions. They make sure that the non-financial efforts, which often go unnoticed, are considered just as significant as direct financial inputs. This recognition helps balance the scales in situations where one party may not have directly earned income but has substantially supported the family in other invaluable ways.

Estimating Future Needs

In estimating future needs, the main focus is what each party will be needing to move forward after the divorce. This assessment considers several long-term factors, such as the potential for earnings, health considerations and the impact of age on employability. For parents, the primary concern of providing for the children’s needs, including education and healthcare, plays a critical role. 

Courts aim to tailor settlements that not only address immediate financial stability but also provide a sustainable plan for the future. Thus, both parties can maintain a reasonable standard of living.

Understanding the Practical Impacts

Understanding the practical impacts of asset division involves recognising the real-world implications of how assets are split. For example, keeping the family home can offer emotional security but might lead to financial difficulties if you struggle to cover expenses like repairs and maintenance. On the other hand, selling the home for more cash could provide greater financial flexibility but might disrupt family life and children’s schooling.

This part of the negotiation considers the day-to-day life changes that the divorce settlement will bring about. It aims for a balance that minimises disruption and maximises well-being.

Reflecting on Superannuation Split

Reflecting on the superannuation split is also important due to its long-term impact on retirement security. Superannuation is often one of the largest assets in a marriage, and is treated as a divisible asset under Australian law. The division isn’t always equal and can be influenced by the marriage length and each spouse’s financial and non-financial contributions. 

Properly addressing superannuation in the settlement negotiations ensures that both parties can look forward to a secure retirement. It reflects their shared contributions to the marital assets over the years.

What Is a 70/30 Divorce Settlement in Australia?

In Australia, a 70/30 divorce settlement refers to the division of marital assets where one party receives 70% of the combined assets, while the other receives 30%. This type of split is unconventional and only happens in exceptional cases. It typically happens when there are substantial differences in the future needs of each party or when one spouse has made considerably greater non-financial contributions during the marriage. 

For instance, if one spouse has put their career on hold to support the family or raise kids and allow the other spouse to advance their career, this might lead to a 70/30 split to address future income differences. Future needs that might justify such a division include:

• Health concerns: If one partner has medical issues that will impact their ability to earn income or require ongoing medical care, they may receive a larger portion of the assets.
• Age and earning capacity: An older spouse with limited ability to re-enter the workforce or enhance their income might receive a greater share of the assets to secure their financial stability.
• Custodial responsibilities for children: If one parent is the primary caregiver and will bear the majority of child-rearing costs, this can also justify a larger share of the asset pool.

Courts also consider the quality and liquidity of assets and not just the percentage split. For example, one partner might receive a larger share of cash or easily accessible assets to meet immediate needs. Meanwhile, the other partner might get assets like business interests or real estate, which are harder to sell but could be worth more over time.

Best Ways to Negotiate a Divorce Settlement in Australia

Negotiating a divorce settlement in Australia involves various legal avenues. Each offers different advantages and is suited to specific situations. The  best options that can help parties achieve a fair and efficient resolution are:

Litigation

When negotiations stall or parties cannot reach an agreement, litigation becomes the necessary path. This involves presenting the case before a family court, where a judge will make a decision based on the evidence and arguments provided. Litigation is often considered a last resort due to the time, cost and emotional strain involved.

Consent Orders

Consent orders are a popular option for divorcing couples who have agreed on the terms of their settlement and want to make their agreement legally binding. Once drafted, the agreement is submitted to the court for approval to meet legal standards and protects both parties’ rights.

Informal Agreement

Couples may also opt for an informal agreement. It is a flexible arrangement that does not necessarily involve the courts. While this can be less stressful and more cost-effective, its major drawback is that it’s not legally enforceable, which might lead to issues if disputes arise later.

Binding Financial Agreement (BFA)

A BFA can be made before, during or after a marriage or de facto relationship. It outlines the division of property, finances and other assets upon separation. To be legally binding, both parties must have independent legal advice, which helps ensure that the agreement is fair and understood by all parties.

Summing Up

The division of assets in Australian divorce settlements can vary widely. It depends on several factors such as each party’s contributions, future needs and any assets brought into the marriage. Whether pursuing litigation, consent orders, informal agreements or BFAs, it’s essential to understand these options when facing this significant life change. 

Striving for a settlement that honours both parties’ past contributions and future potential is not only a legal requirement but also a vital step toward healing and moving forward. With the right information and professional guidance, divorce can lead to fair outcomes tailored to each individual’s unique situation.