menu_book Glossary

Addback

When a court "adds back" money that was wasted or deliberately dissipated by one party, treating it as though it still exists in the asset pool for the purpose of calculating the split.

Asset Pool

The total value of all assets owned by both parties (including joint assets), minus all debts. This is the pool that gets divided between the parties.

Cash Adjustment

A lump sum payment from one party to the other to achieve the target split. Required when the current ownership of assets doesn't match the calculated fair division.

Contribution Percentage

The adjustment to a 50/50 baseline split based on each party's financial contributions, non-financial contributions, and future needs. A positive adjustment favours the client.

De Facto Relationship

A couple who live together on a genuine domestic basis but are not legally married. In Australia, de facto couples have similar property settlement rights under the Family Law Act after 2 years of cohabitation.

Dissipation

The wasteful or reckless spending of shared assets by one party, often after separation. Courts may "add back" dissipated funds to the asset pool.

Equalisation Payment

A payment from one party to the other to balance the division of assets so each party receives their calculated share. Same as Cash Adjustment.

Family Law Act 1975

The Commonwealth legislation governing divorce, property settlement, and parenting arrangements in Australia. Sections 79 and 75(2) are particularly relevant to property division.

Financial Contributions

Direct monetary contributions to the relationship, including income earned, assets brought into the relationship, inheritances, and gifts from family.

Future Needs

Factors the court considers under s 75(2) that may justify adjusting the split, including age, health, earning capacity, care of children, and financial resources.

Initial Contributions

Assets and financial resources each party brought into the relationship at its commencement.

Net Asset Pool

The total value of all assets minus all debts across both parties. This is the starting pool that the percentage split is applied to.

Net Equity

The value of an asset minus any debt secured against it. For example, a property worth $800,000 with a $500,000 mortgage has net equity of $300,000.

Non-Financial Contributions

Contributions to the relationship that aren't directly monetary, including homemaking, childcare, renovations, and supporting the other party's career.

Ownership Split

The percentage of an asset currently owned by each party. This differs from the target split. The goal is to redistribute assets so each party reaches their target equity.

Post-Separation Contributions

Financial or non-financial contributions made by either party after the date of separation, such as mortgage payments, caring for children, or maintaining assets.

Preservation Age

The minimum age at which a person can access their superannuation savings. In Australia, this ranges from 55 to 60 depending on date of birth.

Splitting Order

A court order that splits a superannuation interest between the parties. The funds are transferred directly between super funds without being cashed out.

Superannuation

Australia's compulsory retirement savings system. Super is treated as property in family law proceedings and can be split between parties via a splitting order or flagging agreement.

Target Equity

The dollar amount each party should receive based on the calculated percentage split. Target Equity = Net Asset Pool × Party's Percentage.

Waste

Expenditure by one party that was reckless, negligent, or designed to reduce the asset pool available for division. Courts assess whether to add back wasted amounts.

Waste Scenarios

Three possible approaches to handling wasted assets: no addback (waste is ignored), partial addback (only clearly reckless waste is added back), and full addback (all waste is returned to the pool).

s 75(2) Factors

Section 75(2) of the Family Law Act lists factors the court must consider when deciding what is "just and equitable", including age, health, income, care of children, and the standard of living.

s 79

Section 79 of the Family Law Act gives the court power to alter the property interests of parties to a marriage. It requires the court to consider contributions and s 75(2) factors.