Family Law Act Section 75(2): Property Settlement Special Circumstances

Property Settlement Special Circumstances

The third step in the four-step process that the Court generally applies to property settlements is to determine whether there are any special circumstances that require adjustment to the property settlement amount.

These adjustments are usually based on each parties’ future needs.

This step follows after the initial two steps of determining what is in the net asset pool of the relationship and what are the contributions of the parties to the relationship.

The factors considered in the third step are commonly referred to as future needs factors or section 75(2) factors for married couples or section 90SF(3) factors in a de-facto relationship.

A party’s future needs factors are considered by the Court when the Court considers ordering spousal maintenance.

Section 75(2) and Section 90SF(3) of the Family Law Act 1975 (Cth) set out 19 factors that may be taken into account by the Court in the third step.

We list five commonly argued future needs factors with some of our brief comments below:

1. The age and state of health of each of the parties

Some common questions the Court might seek answers to are:

  • How will the age and health of the parties affect their ability to work or receive income?
  • Does one party have more years of employment than the other?
  • Is one party not able to work or has increased medical expenses because of their health?

2. Income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment

Is there a difference in each parties’ income earning capacity?

3. Whether either party has the care or control of a child of the marriage who has not attained the age of 18 years

Quite frequently one party to a relationship leaves the relationship with primary care of the children. This may affect that party’s ability to work or receive income.

4. The duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration

It is common in long relationships that one party takes up the role of primary income earner whereas the other party takes up the role of primary homemaker.

In long relationships, the primary homemaker’s employment prospects are reduced by that party’s length of time spent out of the workforce and as a homemaker.

5. If either party is cohabiting with another person and the financial circumstances relating to the cohabitation

Australia is a no-fault jurisdiction. This means there generally are no legal ramifications where a relationship has ended because of adultery.

However, if a spouse has re-partnered and cohabitates with their new partner, their changed financial circumstances can be a relevant future needs factor.

As discussed above, there are a large number of factors which the Court can take into account at this stage of a four-step process.

There is generally one other step that the Court considers after it has considered the future needs of the parties.

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