Divorce & Property Settlement: What’s the Difference?
Divorce and Property Settlement are two separate processes that need to be addressed individually. Divorce deals with the ending of a couple’s marital status, while Property Settlement relates to the ending of a couple’s financial relationship.
Obtaining a Divorce does not automatically divide your assets, liabilities, or superannuation, nor does reaching a Property Settlement automatically end your marriage. The two are distinctly different processes.
Australia has a no-fault Divorce system. Under the Family Law Act 1975 (Cth) (‘the Act’), the grounds for Divorce are that the marriage has broken down irretrievably. This is established by the parties having separated and lived separately and apart for a continuous period of at least 12 months immediately before the Divorce application is filed. There is no requirement to establish why the marriage broke down. It is also possible for a couple to be separated while continuing to live under the same roof.
Sole Application vs Joint Application
Divorce applications can be filed by one party or by both parties, with the exception that sole applications must be served on the respondent once filed with the Court at least 28 days before the Court hearing date, or at least 42 days if the respondent is overseas.
With a joint application, both spouses are applicants, and there is generally no requirement to serve the application on the other party.
Whether attendance at a Divorce hearing is required will depend on matters including whether the application is sole or joint, whether there are children of the marriage under the age of 18 years, and the particular circumstances of the application.
Divorce Hearings
Where a Divorce hearing is required, applicants and respondents generally do not have to attend Court. During the hearing, the Court will review the application and make the Divorce Order if the required criteria are established.
If the other party files a response to the Divorce application, a Court hearing is likely to be scheduled for both parties to attend if the response filed opposes the Divorce application.
Importantly, the Court will not determine how the parties’ property should be divided at the Divorce hearing. The Divorce application is concerned with legally ending the marriage. Financial matters are dealt with separately.
After the Divorce Hearing
Importantly, once a Divorce becomes final, a 12-month limitation period generally applies for commencing Property Settlement proceedings. If proceedings are not commenced within that period, permission from the Court may be required to apply out of time.
A Divorce Order ordinarily becomes final one month and one day after it is made, unless the Court orders otherwise. The 12-month limitation period runs from the date the Divorce takes effect, rather than simply from the date of the Divorce hearing.
Property Settlement can be initiated once a couple has separated but has not filed for Divorce. If they do not meet the 12-month separation requirement, they can formalise their financial relationship before applying for Divorce.
Different time limits apply to de facto relationships. An application for Property Settlement following the breakdown of a de facto relationship will generally need to be commenced within two years of the relationship breaking down.
Consent Orders
Consent Orders are different again. They are Orders made by the Court based on an agreement reached between the parties. In a Property Settlement matter, separated spouses may negotiate an agreed division of their assets, liabilities, and superannuation, and then apply to the Court to have that agreement formalised as Consent Orders.
It is not necessary to be divorced before applying for property settlement Consent Orders. A separated married couple can resolve and formalise their financial relationship while they remain lawfully married.
Consent Orders can also deal with parenting arrangements.
When considering proposed property Consent Orders, the Court must be satisfied that the Orders are just and equitable before making them.
Do You Have to Split Superannuation in Divorce?
Under the Act, superannuation is treated as ‘property’ for a Property Settlement application following separation. Although acquired individually, the Court takes into account all superannuation interests held by the parties as part of the parties’ property and financial circumstances. This does not mean that the Court will automatically divide superannuation interests; however, relevant superannuation interests need to be properly identified and valued as part of resolving the parties’ financial matters.
Depending on the circumstances, Property Settlement can include a superannuation splitting order or agreement. A superannuation split does not generally convert superannuation into immediately accessible cash; the transferred interest ordinarily remains subject to the usual superannuation rules.
How Long After Divorce Can You Claim Superannuation?
There is no separate time limit that applies only to making a claim in relation to a former spouse’s superannuation. Instead, superannuation is generally dealt with as part of the overall Property Settlement under the Act.
For married couples, Property Settlement proceedings generally need to be commenced within 12 months after the Divorce becomes final. If that period has expired, it may still be possible to seek permission from the Court to commence proceedings out of time, but permission is not automatically given.
You do not need to wait until you are divorced to deal with superannuation. Superannuation interests can be considered and, where appropriate, split as part of a Property Settlement following separation. If Property Settlement has already been finalised, whether a further adjustment involving superannuation can be sought will depend on the circumstances and how the earlier settlement was documented.
How Long After Divorce Can You Remarry?
You can remarry once the Divorce has become final, which ordinarily occurs one month and one day after the Divorce Order is made.
It is important not to make wedding arrangements based solely on the anticipated date of a Divorce hearing. Delays or issues with an application can mean a Divorce is not granted when expected. You should ensure the Divorce has become final before remarrying.
Do You Need to Finalise Your Property Settlement Before Getting Divorced?
No. Divorce and Property Settlement occur independently of each other. You may apply for Divorce before resolving your property matters, or you may reach Property Settlement while you are separated but still legally married.
What matters is understanding the consequences and applicable time limits. In particular, once a Divorce becomes final, the 12-month period for commencing Property Settlement proceedings begins to run.
Separating couples should also consider other matters that may require attention following separation, including parenting arrangements, superannuation nominations, their Wills, and broader estate planning. Divorce does not, by itself, resolve all of the legal and financial consequences of a relationship breakdown.
Contact Us
If you have separated, are considering Divorce, or have reached an agreement about the division of your property, obtaining family law advice can help you understand the appropriate next steps and ensure any agreement is properly documented.
For more information, contact Bambrick Legal today. We offer a free, no-obligation 30-min consultation for all enquiries.
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Related Blog – Can You Sell Property Before Divorce & Property Settlement?
