one spouse that frees the other spouseto work directly for financial reward, aredisregarded when property is divided.

While the above research is often stillrelied upon, there is a clear need for up-to-date information on the division ofmatrimonial property in Australia, asemphasised by the Federal Attorney-General (1999). This need is based ontwo considerations. First, almost two decades havepassed since the above groundbreaking researchwas conducted by the Australian Institute of FamilyStudies regarding property division on divorce –both privately negotiated and judicially determinedsettlements. This research was reported in theInstitute’s publications Settling Up: Property andIncome Distribution on Divorce in Australia(McDonald 1986b), and Settling Down: Pathwaysof Parents After Divorce (Funder, Harrison andWeston 1993). Second, since that time there havebeen a number of broad-based policy, economic anddemographic changes in Australia that may haveinfluenced the way in which property is divided.

One of the core changes has been the introduc-tion of the Child Support Scheme (collection in1988 and assessment in 1989) – a major legislative

28 Family Matters No.55 Autumn 2000 Australian Institute of Family Studies

n Australia, under the provisions of theFamily Law Act 1975, the Family Courthas a discretionary power to divideproperty on marriage breakdown, takingaccount of the parties’ past financial

and non-financial contributions to property and tothe welfare of the family, and the respective futurefinancial needs of the parties.

However, empirical research conducted by theAustralian Institute of Family Studies over the pasttwo decades suggests that the legislative intention ofthe financial provisions of the Act may be incon-sistent with the way property is actually divided.

This earlier Institute research found that thefinancial burden of divorce on women who havetaken time out of paid work to have and care forchildren is not always reflected in a distribution of property that is sufficiently in their favour(McDonald 1986a; Funder 1992; Harrison, Funderand McDonald 1993). In addition, contributions to non-domestic assets, such as superannuation,investments, and businesses, is to a large extentattributed to the partner who contributed finan-cially to its acquisition (McDonald 1986a). Thusnon-financial contributions made to these assets,particularly the domestic activities performed by

The way property is divided on divorce is a key issue for families, and one that

has attracted considerable debate over the past two decades. Recent Australian

Institute of Family Studies data provide an insight into the way in which women

and men are dividing their property when they divorce,and what they consider to

be a fair division.

II

G R A N I A S H E E H A N a n d J O D Y H U G H E S

The division of

W h a t i s a f a i r s e t t l e m e n t ?

matrimonial property in Australia

29Australian Institute of Family Studies Family Matters No.55 Autumn 2000

reform that has arguably reduced the need for theday-to-day support of children to be taken intoconsideration in property proceedings. Another is the growth in women’s workforce participationduring marriage (Wolcott 1997) which has increasedwomen’s financial contribution to the matrimonialproperty and the welfare of the family, and mayhave improved their chances of being in, or finding,paid work when the marriage ends. The increasingtendency for couples to live together before marriage,and to marry and have children at a later age (deVaus 1997a, 1997b), are demographic shifts thatextend the period of time in which women leadfinancially independent lives: this may also resultin increased contributions women make beyondthe domestic assets of the marriage, and theirfinancial resilience following separation and divorce.

There is clearly a need for up-to-date informa-tion on the division of matrimonial property inAustralia (both privately negotiated and judiciallydetermined settlements), especially in the light ofthe policy, economic and demographic changesthat have occurred in the past ten years or so. Thisarticle reports the findings of recent AustralianInstitute of Family Studies research that examinesthese matters.

Study of property divisionThis article draws on data from the AustralianDivorce Transitions Project to examine the extentto which the various contributions and needsspecified by the Family Law Act contribute to theway property is currently divided in Australia.

Picture: Andrew Chapman

Where possible, comparisons are made betweenthe way in which property is actually divided andwomen’s and men’s own views on what constitutesa fair division.

The survey was conducted in 1997 and com-prised telephone interviews with 650 divorcedAustralians, including those who settled theirproperty matters privately. The findings reportedhere are based on a sub-sample of 513 men andwomen in the larger survey who had a child underthe age of 18 years at the time of separation. Thissub-sample was chosen because it ensures that, for each of the cases included in the analysis, thewelfare of the children and the future needs of theresident parent may have been a consideration inthe determination of the settlement, along with anassessment of non-financial contributions.

Respondents were asked detailed questionsconcerning the value of their property and how itwas distributed, the extent of financial and non-financial contributions made, and the financialneeds of women and men at separation. Respon-dents were also asked about other outcomes from

the divorce such as the nature of their residence,contact and child support arrangements, and howfair they judged the property settlement to be. Theanswers to these questions provide a clearer senseof the ways in which property is currently divided,as well as divorced women’s and men’s perceptionsof a fair division, and how trends in the division ofproperty have developed over the past decadesince Settling Up (McDonald 1986b).

The data analytic techniques employed toaddress the research questions were multivariatein nature. The statistical procedures used takeinto account the simultaneous effects of a range of factors (such as contributions, future needs and other factors) at the one time, effectively controlling for any effect of one particular factoron another in the model.

Specifically, the influence of the contributionand future needs factors on men’s and women’sreports of the wife’s share of property was exam-ined using analysis of variance with multipleclassification analysis. The effects of asset wealthand length of marriage were controlled for byincluding these two factors as covariates in therespective models. The influence of these same

Wife’s share of property by asset wealth group (n=193)

30 Family Matters No.55 Autumn 2000 Australian Institute of Family Studies

contributions and future needs factors on maleand female respondent’s reports of how fair thedistribution of property was to them were examinedusing sequential logistic regression. The actualshare of property received was controlled for byentering this factor at the first step in the analysis.The above analyses were conducted separately forwomen and men.

Because of the complexity involved in reportingin full the results derived from such procedures,and given that only a sub-set of the factors thatwere included in these models are directly relevantto the research questions listed above, the follow-ing discussion of the findings will be limited to theinterpretation of core significant effects that are of direct relevance to the research questions. (AWorking Paper, detailing statistical procedures,method of analysis, and detailed findings, will beavailable from the Australian Institute of FamilyStudies in May/June 2000.)

What is a fair settlement?In essence, the Divorce Transitions data suggestthat current practice in dividing property does notreflect the full ambit of the legislative provisions.Non-financial contributions to non-domestic assetswere unlikely to be reflected in the share of prop-erty received. As regards future needs, the needsof dependent children appear to have been themost important consideration, and the financialneeds of the former spouse may have been over-looked. Women’s and men’s reports of a fairsettlement are, however, consistent with the way property is divided. These findings are nowconsidered in more detail.

Share received More than one third of the respondents (42 percent) reported that the wife received 60 per cent ormore of the property. Only 29 per cent of womenand men reported a division falling in the middlerange of 40–59 per cent share received. There wassignificantly more variation observed in the sharereceived for those with the highest level of assetwealth (that is, assets valued at more than or equalto $268,500) compared with those with the lowestlevels of asset wealth (that is, assets valued at lessthan $114,000). Figure 1 illustrates the nature ofthese group differences.

The share received by the wife for the lowestasset wealth group, and to a lesser extent thosewith asset wealth valued at between $114,000 and$268,500, is concentrated at the top end of thedistribution (that is, receipt of a majority share of the assets). In comparison, the share receivedby the wife for the highest asset wealth group isconcentrated at the low end of the distribution.

Thus, while there is greater variation in settle-ment outcomes among the wealthier couples,women in this group are also more likely thanother women to receive a minority share of thematrimonial assets. These findings are consistentwith the Institute’s earlier findings (McDonald1986a), confirming that there remains substantialvariation in settlement outcomes under the current

0102030405060708090

100HighMediumLow

60-100%40-59%0-39%

Figure 1.

Per c

ent

Share to wife

Source: Australian Divorce Transitions Project, Australian Institute of Family Studies, 2000

31Australian Institute of Family Studies Family Matters No.55 Autumn 2000

discretionary system. In the majority of cases, therelative share received by the former husband andwife is substantially different from a 40:60 divisionbetween parties.

To test whether this variation is in accordancewith the current provisions of the Family Law Act,comparable measures to those used by McDonaldin Settling Up (1986b) were employed to examinethe extent to which contributions and futureneeds factors contributed to the share received.The findings from these analyses are now consid-ered. (See boxed inset for measurement details onthe factors referred to in the following discussion.)

Financial contributions countConsistent with the Settling Up findings, data fromthe Australian Divorce Transitions Project indicatedthat the wife’s share of assets is reduced wherenon-domestic assets, such as investments, busi-nesses and superannuation, comprise a highproportion of the couple’s asset wealth.

This finding suggests that direct financial con-tributions to non-domestic assets still have a majorimpact on the way property is divided, with thehusband receiving the majority of these assets. Onthe other hand, financial and non-financial contri-butions made to the acquisition and improvement ofdomestic assets (such as the home and furnishings)appear to have been considered equal by the parties,with the majority share of these assets going to theresident parent – usually the wife – in recognitionof her and the children’s future financial needs.The proportion of domestic to non-domestic assetsthat make up the total asset pool is thus a keysource of variation between property settlements.

A number of trends in the data are also of note.In particular, men’s reports of their contribution tothe value of the matrimonial home also predictedthe share they received. Men who reported havingmade a greater contribution to the value of thehome than their former spouse tended to receive agreater share of property than men who reportedboth parties as having contributed equally. Thismay be the result of some men having purchasedthe family home prior to marriage or having usedfunds acquired prior to marriage to finalise thepurchase. Such an explanation for this patterncannot be explored further using the DivorceTransitions data as respondents were not askedquestions about the financial contributions theymade prior to marriage, or those made by others.

Non-financial contributions to the day-to-daymanagement of the household also appear to influence the share received, but in the reversedirection to that prescribed in law. Women whoreport having taken a traditional role in householdmanagement – that is, primary responsibility forthe day-to-day care of children and cleaning, whilethe husband had primary responsibility for house-hold maintenance and paying the bills – received a share of property well below the mean share forwomen overall. Conversely, women who reportedsharing responsibility for all household tasksequally with their former spouse (including payingthe bills) received a share of property above themean share for women overall.

The following measures of contributions and futureneeds are comparable to those used by McDonald in Settling Up (1986), and are designed to assess, wherepossible, the factors specified in the Family Law Act. In addition to these measures, measures of children’sarrangements that were included in the analyses of perceived fairness are shown.

Measures of contributions comprise:

• the respondents’ report of their own and their formerspouse’s contribution to household management during the marriage, including the extent to which therespondent and their former spouse took responsibilityfor paying the bills, cleaning, home maintenance, andtaking care of children;

• the respondents’ report of own and their formerspouse’s contribution to the value of the family home,either direct financial or non-financial means;

• time out of paid work during the marriage to have andcare for children;

• non-basic assets as a proportion of total asset wealth.

Financial contributions made by the respondent prior tomarriage or by others were not measured.

Measures of future financial needs comprise:

• whether the respondent had primary responsibility forthe care of dependent children under the age of 18years post-separation;

• whether the respondent was in paid work at the timeof separation;

• highest level of education and occupation achieved;

• length of marriage;

• whether the respondent repartnered post-separationand divorce; and

• whether regular child support was paid or received.

Measures of children’s arrangements comprise:

• level of contact with children: shared arrangement;non-resident parent has frequent contact; and non-resident parent has limited or no contact;

• child support arrangements: regular child support paidor received; regular child support not paid or received;

• reported fairness of the contact arrangements;

• reported fairness of the child support arrangements; and

• reported level of conflict between the former spousesabout the children one year after the separation.

MEASURES USED IN THE STUDY OF PROPERTY DIVISION

Source: Australian Divorce Transitions Project, Australian Institute of Family Studies, 2000.

32 Family Matters No.55 Autumn 2000 Australian Institute of Family Studies

The data also provided insight into the extent to which women’s and men’s reports of fairnessreflected consideration of the parties’ respectivecontributions. The greater the percentage of assetwealth accounted for by domestic assets such asthe family home and furnishings, the fairer menreported the settlement to be, even though themore domestic assets were in the pool, the morethe wife received. This finding is consistent withthe argument made earlier that, for the majority of women and men who divorce, non-financialcontributions and future needs are taken intoaccount only in the division of the domestic assetsof the marriage, and that these entitlements, whenrestricted to domestic assets, are considered fair.

However, men who reported that they con-tributed more (financially or non-financially) than their former spouse to the value of the familyhome – the primary domestic asset – were lesslikely to report the property distribution as fairthan men who reported that their former spouse

contributed equally to the value of the family home.This particular finding cautions that while the parties’ respective contributions are an importantconsideration in judgements of fairness, an equalemphasis on financial and non-financial contribu-tions to the domestic assets is not always seen tobe fair, particularly when a party believes theymade the more significant financial contribution.

In sum, the findings provide support for thedebate discussed above that equity in the divisionof matrimonial property is not always realisedunder the current Act. Some 15 years on from Settling Up, definitions of ‘communal’ propertyremain restricted to domestic assets having notkept pace with modern notions of marriage andother social, economic and investment trends.

Children firstAs outlined earlier, after contributions, the secondpart of the property division equation is futureneeds. Here, the data are again consistent withSettling Up and confirm that, of the future needsfactors tested, responsibility for the care of depen-dent children remains the most influential inpredicting the share of property a party receives.

Further, the ‘future needs’ factors were nottaken into account in a way that unduly favouredwomen at the expense of men – a criticism fre-quently directed at the government by men’srights groups in reference to property reform(Kaye and Tolmie 1998). Irrespective of whether it was the former husband or former wife who wasthe resident parent, the share received shifted infavour of the resident parent. This occurred evenif other needs did not appear significant (for example, the resident parent had remained in theworkforce throughout the marriage and was inpaid work at the time of separation).

This finding is not surprising given the increas-ing emphasis over the past decade on protectingthe interests of the children of the marriage, thecontinuing responsibility of both parents to lookafter their children, and reducing state costs intheir upbringing when the marriage ends.

Significantly, respondents’ actions in dividingproperty in favour of the resident parent were

generally consistent with their per-ceptions of fairness regarding otheraspects of their children arrange-ments. This suggests an overallchild-orientated motivation indivorce settlements. The likelihoodof men and women judging the prop-erty settlement as fair increased ifthey thought the child supportarrangements were fair, irrespectiveof the share of property they actuallyreceived. In particular, those menwho reported the child supportarrangements as being fair alsotended to report frequent contactwith their children and that theywere happy with the contact arrange-ments made. In other words, thehappier these men were with thechildren’s arrangements, the happier

they were with a settlement that favoured the resident parent – a finding that replicates similarresearch in the United States (Sheets and Braver1996).

Understanding why women’s evaluations of thechild support arrangements were related to theirjudgements of the fairness of the property settle-ment also requires consideration of the nature ofthe children’s arrangements made. In particular,those women who were unhappy with the childsupport arrangements were more likely than otherwomen to report not having received any childsupport from a liable former spouse.

Taken together, the findings for men andwomen demonstrate a strong interdependencebetween a party’s satisfaction with child and property arrangements. It appeared that the financial and contact arrangements made for children were a key source of distress affectingwomen’s and men’s satisfaction with the way their property was divided.

In contrast, responsibility for the future needsof the spouse (independently of concerns for thewelfare of the children), appear to have been governed by a very different ideology – that of a

The likelihood of men and women judging the property settlement asfair increased if they thought the child support arrangements were fair.

33Australian Institute of Family Studies Family Matters No.55 Autumn 2000

‘clean break’ and the cessation of any ongoingresponsibility for one another’s welfare on divorce.While the data suggest there was some recognitionof the needs of women at the end of long-termmarriages, the extent of the wife’s involvement in paid work during the marriage and at the timeof separation, and responsibilities taken for themaintenance of the home and the care of the children during the marriage, did little to increaseher share of the property. Nor were the future needsof the former spouse taken into consideration viathe payment of spousal maintenance. Spousalmaintenance in this sample was ‘rare, minimaland brief’ (Behrens and Smyth 1999: 21), and waspredominantly paid out as bridging-finance untilthe property matters were finalised rather than asa form of ongoing financial support (Behrens andSmyth 1999).

Consistent with the findings described above,the future financial needs of the former spouseappear to have little direct influence on men’s orwomen’s reports of fairness. Surprisingly, with oneexception, future financial need was unrelated towomen’s reports of fairness. The exception wasthat those women who had spent an extendedperiod of time out of paid work during the marriagewere most likely to view the settlement as fair.This suggests that women, particularly those frommore traditional marriages, may underestimatetheir entitlement to matrimonial property basedon their own financial need (independently of theneeds of the children). Such an exception is consistent with the findings reported by Behrensand Smyth (1999) that women who had spentmore than one third of the marriage out of paidwork – typically to have and care for children –were the least likely to support the payment ofspousal maintenance.

In sum, the findings provide support for theview that, in practice, the adjustment made toproperty interests in recognition of the wife’sfuture financial needs may be inadequate. A remedyfor this shortfall is, however, dependent on twofactors. The first is the extent of asset wealth available to the parties on divorce; the second isthe capacity of the former spouse to pay ongoingsupport to this spouse in addition to any ongoingfinancial commitments that he or she may have totheir children.

ConclusionAnalysis of the data from the Institute’s AustralianDivorce Transitions Project suggests that women andmen evaluate a settlement as fair when the divisionof property reflects financial contributions to themarriage and concern for the welfare of the children.To this end, the principles that govern women’s andmen’s perceptions of a fair settlement are reflectedin outcomes of property division. The law is thusbeing applied in a way that is consistent with notionsof fairness currently held in the community.

However, despite this consistency, it appearsthat little has changed since the publication of theInstitute’s Settling Up (McDonald 1986b) in theway matrimonial property is divided, and criticism

of the law’s failure to deliver equity and justice in the division of property remains relevant. Inparticular, women’s and men’s reports of propertydivision and perceptions of fairness did not reflecta sense that women are entitled to non-domesticassets based on their non-financial contributions,and on their own financial needs post-separationand divorce.

Taken together, these findings highlight thechallenge faced by policy makers in the area offamily law in aligning substantive law with people’ssubjective notions of justice, while at the sametime drafting legislative provisions which encour-age women and men to divide their property in away that ensures each party receives a just andequitable share. While the current Family Law Act provisions succeed in doing the former thereremains some concern as to whether the latteraim is being achieved.

ReferencesBehrens, J. & Smyth, B. (1999), Spousal Support in Australia:

A Study of Incidence and Attitudes, Working Paper No. 16,Australian Institute of Family Studies, Melbourne.

de Vaus, D. (1997a), ‘Marriage’, in D. de Vaus & I. Wolcott (eds)Australian Family Profiles: Social and DemographicPatterns, Australian Institute of Family Studies, Melbourne.

de Vaus, D. (1997b), ‘Divorce’, in D. de Vaus & I. Wolcott (eds)Australian Family Profiles: Social and DemographicPatterns, Australian Institute of Family Studies, Melbourne.

Federal Attorney General (1999), ‘Shaping family law for thefuture’, National Press Club Telstra Address, October 27,Canberra.

Funder, K. (1992), ‘Australia: a proposal for reform’, in J. J.Weitzman & M. McLean (eds) Economic Consequences ofDivorce: The International Perspective, Clarendon Press,Oxford.

Funder, K., Harrison, M. & Weston, R. (1993), Settling Down:Pathways of Parents After Divorce, Australian Institute ofFamily Studies, Melbourne.

Harrison, M., Funder, K. & McDonald, P. (1993), ‘Principles,practice and problems in property and income transfers’, inK. Funder, M. Harrison & R.

Weston (eds) Settling Down: Pathways of Parents AfterDivorce, Australian Institute of Family Studies, Melbourne.

Kaye, M. & Tolmie, J. (1998), ‘Fathers’ rights groups inAustralia and their engagement with issues in family law’,Australian Journal of Family Law, vol. 12, pp. 19-68.

McDonald P. (1986a), ‘Property distribution: the shares of eachpartner and their determinants’, in P. McDonald (ed.)Settling Up: Property and Income Distribution on Divorcein Australia, Australian Institute of Family Studies, andPrentice-Hall of Australia, Melbourne.

McDonald P. (ed.) (1986b), Settling Up: Property and IncomeDistribution on Divorce in Australia, Australian Institute ofFamily Studies, and Prentice-Hall of Australia, Melbourne.

Sheets, V. L. & Braver, S. L. (1996), ‘Gender differences in sat-isfaction with divorce settlements’, Family Relations, vol.45, pp. 336-342.

Wolcott (1997), ‘Work and family’, in D. de Vaus & I. Wolcott(eds) Australian Family Profiles: Social and DemographicPatterns, Australian Institute of Family Studies, Melbourne.

Grania Sheehan and Jody Hughes are Research Fellowand Research Officer respectively at the Australian Institute of Family Studies, and members of the researchteam working on the Institute’s Australian Divorce Transitions Project.

This article is based on their longer Working Paper, whichprovides statistical procedures, method of analysis, anddetailed findings, due to be published by the AustralianInstitute of Family Studies in May/June 2000.