Section 79 Family Law Act: How Property Is Divided in Victoria

Many people separating in Victoria assume their assets will be split 50/50. That assumption costs people money. Australian family law doesn't work that way, and understanding the actual legal framework — specifically Section 79 of the Family Law Act 1975 — is the starting point for any realistic negotiation.

What Section 79 Actually Says

Section 79 of the Family Law Act 1975 (Cth) is the provision that gives the Federal Circuit and Family Court of Australia (FCFCOA) the power to alter property interests between married couples. For de facto couples, the equivalent provision is Section 90SM — it applies the same framework.

The critical phrase in Section 79 is that the court can only make a property order if it is satisfied the order is "just and equitable." That isn't a rubber stamp. The court must genuinely conclude that altering the existing property interests is fair in all the circumstances of the particular family.

Victoria doesn't have its own divorce or property division law. Because family law is a federal matter under the Australian Constitution, the Family Law Act 1975 applies uniformly across all states and territories (with the exception of Western Australia, which has its own Family Court). So when Victorian couples separate, whether they were married or in a de facto relationship, their property split is governed by federal law and determined by the FCFCOA.

The Four-Step Process Now Codified in Law

For decades, the courts developed a "four-step methodology" through case law — most famously established in Hickey v Hickey (2003). The Family Law Amendment Act 2024 formally codified these four steps directly into the Family Law Act 1975, effective 10 June 2025. They now appear in the statutory text itself, not just in judicial practice.

This matters because it makes the process more predictable and harder to circumvent.

Step 1: Identify and Value the Net Property Pool

Everything owned or owed by either party — individually, jointly, or through entities they control — goes into a single global pool. This includes the family home, investment properties, bank accounts, superannuation, vehicles, business interests, and all debts.

The pool is valued at the date of the settlement or final hearing, not the date of separation. A Melbourne property worth $900,000 on separation day and $1,100,000 two years later when consent orders are filed is valued at $1,100,000. Valuations must be current — typically no more than six months old.

Post-separation assets aren't automatically excluded either. If one spouse buys a car post-separation using their own salary, that car must still be disclosed. However, the court will trace the source of funds and credit that party with a 100% post-separation contribution for it.

Step 2: Assess Contributions

The court evaluates what each party contributed to the accumulation and preservation of assets across the entire relationship. Contributions fall into several categories:

Financial contributions include wages, salary, initial assets brought into the relationship, inheritances, and gifts from family.

Non-financial contributions are given equal legal standing. Renovating a property, project-managing a home build, performing physical labor to maintain assets — these count. Courts have consistently held that non-financial contributions can shift a percentage split significantly.

Homemaker and parenting contributions are explicitly recognized as having equal value to financial contributions. A partner who stayed home to raise children and manage the household did not "contribute nothing" — their contributions enabled the working partner to earn income and build wealth. The longer the relationship, the more these contributions accumulate.

Economic effect of family violence is now a formal contribution factor under the 2025 reforms. If one partner's capacity to contribute was hindered by physical, psychological, or financial abuse — including what the legislation now calls "dowry abuse" — the court adjusts the percentage split accordingly.

The output of Step 2 is a percentage split reflecting historical contributions. For a 20-year marriage where one partner worked and the other primarily cared for children, Step 2 might produce something close to 50/50. For a two-year childless relationship, Step 2 might produce 70/30 in favour of the party who brought more assets into the partnership.

Step 3: Consider Future Needs

Step 3 applies forward-looking adjustments to the Step 2 percentage. The court asks: given each party's current and likely future circumstances, does the Step 2 result fairly account for the economic disparities they face going forward?

The main adjustment factors under Section 75(2) (for married couples) and Section 90SF(3) (for de facto couples) include:

• Age and health — Illness or disability that impairs earning capacity shifts the percentage toward the disadvantaged party
• Income-earning capacity — A significant gap in earning potential (say, one partner earns $180,000 and the other earns $45,000 part-time) will produce a meaningful adjustment
• Primary care of children — The partner who will have the children living with them more often will bear higher day-to-day costs, warranting an upward adjustment
• Eligibility for Centrelink payments — Government benefits are taken into account
• Standard of living — The court aims for a reasonable standard of living for both parties relative to the relationship's history

Step 3 doesn't replace Step 2 — it adjusts it. A Step 2 split of 55/45 might become 65/35 after Step 3 adjustments if one party has primary care of young children and a substantially lower earning capacity.

Step 4: Just and Equitable Check

Before finalizing any order, the court steps back and asks whether the resulting split is genuinely fair. This is the final safeguard. Even if the mathematical output of Steps 1-3 produces a particular percentage, the court must be satisfied that making an order altering property rights is appropriate in all the circumstances.

In practice, most cases don't reach Step 4 in a contentious way — the just and equitable check confirms rather than reverses. But it is a real constraint, particularly in short relationships or where one party holds substantial pre-relationship assets.

How Relationship Length Changes Everything

The length of the relationship significantly shapes how the court exercises discretion:

Short relationships (under 5 years, no children): The court tends to use an asset-by-asset approach rather than global pooling. Each party's initial contributions are traced carefully, and the court often aims to return parties to close to their pre-relationship financial positions. If one partner brought a $500,000 house and the other contributed $20,000 in savings, the short-relationship outcome might be closer to those original positions than a 50/50 split.

Long relationships (10+ years): Initial contributions are typically viewed as having been "eroded" by years of mutual effort. The court defaults to a global pooling approach, and Step 3 future needs factors dominate. A 15-year marriage where one partner primarily raised children will rarely produce an outcome far from 50/50 at Step 2, with Step 3 adjustments then applied.

Building a Property Settlement Checklist

A family law property settlement process follows a specific sequence that can't be shortcut. Before negotiations begin, you need:

• A complete inventory of all assets, liabilities, and financial resources (both parties)
• Current valuations for real estate, vehicles, and any business interests
• Three years of tax returns and ATO notices of assessment
• Bank statements for all accounts over the last 12-24 months
• Superannuation member statements and, if needed, Form 6 valuation requests
• Trust deeds and three years of financials for any family trusts or private companies

Without this foundation, any negotiation is speculative. You can't accurately assess contributions (Step 2) or future needs adjustments (Step 3) if you don't have a complete picture of the asset pool (Step 1).

The Victoria Divorce Financial Split & Asset Division Guide includes a structured workbook that walks through each step of this process — from building the initial asset inventory to calculating contribution percentages and assessing future needs adjustments — so you can enter negotiations with a clear, defensible position rather than a rough estimate.

The 12-Month Deadline You Cannot Miss

For married couples, property settlement applications must be filed within 12 months of the date the divorce order becomes final. Miss this deadline and you need the court's permission to file late — a discretionary, uncertain process that requires proving special circumstances.

For de facto couples, the equivalent deadline is two years from the date of separation.

These are not soft guidelines. They are hard statutory limits. If you're approaching either deadline without a formalized agreement, legal advice is urgent.

What "Just and Equitable" Means in Practice

The practical takeaway from Section 79 is that no two property settlements are identical. An 80/20 split and a 50/50 split can both be "just and equitable" depending on the specific contributions and circumstances of the parties involved. The framework gives the court enormous discretion — which means entering negotiations with a clear understanding of your own contribution profile and future needs position gives you a material advantage.

The Victoria Divorce Financial Split & Asset Division Guide is built around this framework: worksheets to calculate your Step 2 contributions percentage, a future needs assessment tool, and a step-by-step sequence through the entire property settlement process.

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