In Australian family law, property settlements following the breakdown of a marriage or de facto relationship are determined under the Family Law Act 1975. The principle guiding these settlements is that they must be just and equitable, rather than adhering to a strict 50/50 division. A significant factor that may influence the court’s decision is the age difference between spouses, as it can impact their future financial needs and earning capacities.

The Legal Framework for Property Settlement

The Family Court of Australia and the Federal Circuit and Family Court of Australia follow a four-step process to determine property settlements:

Identifying and Valuing the Property Pool – The court identifies and assesses all assets, liabilities, and financial resources belonging to both parties.

Assessing Contributions – This includes financial contributions (such as salaries and inheritances) and non-financial contributions (such as homemaking and child-rearing responsibilities).

Evaluating Future Needs – The court considers factors such as age, health, income disparity, earning capacity, and caregiving responsibilities.

Ensuring a Just and Equitable Outcome – Adjustments are made to achieve fairness between the parties based on the considerations above.

How Age Difference Affects Property Settlement

A significant age gap, such as a 13-year difference, can impact property settlements in various ways, particularly in the evaluation of future financial needs. Below are key aspects that the court considers:

1. Earning Capacity and Career Longevity

An older spouse may have limited career prospects and a shorter working life, making it difficult for them to rebuild financial resources post-separation. The court may adjust the property settlement in their favor to compensate for this disadvantage.

A younger spouse may have greater opportunities for career progression and asset accumulation, potentially leading to a lesser share of the current asset pool.

2. Superannuation and Retirement Considerations

If the older spouse is nearing retirement age, they may have fewer opportunities to grow their superannuation savings. The court may allocate a larger portion of superannuation or financial assets to them to secure their future financial stability.

The younger spouse, on the other hand, has more years to work and accumulate superannuation, which may influence the division of financial resources.

3. Health and Medical Costs

Age-related health issues may require significant medical expenses and ongoing care, particularly for the older spouse. The court may consider this factor when dividing the property pool.

4. Impact on Spousal Maintenance

If the older spouse has reduced income potential due to age or health conditions, they may have a stronger claim for spousal maintenance.

The younger spouse’s ability to re-enter the workforce or enhance their income may reduce their entitlement to ongoing financial support.

5. Childcare and Parental Responsibilities

If children are involved, the younger spouse may have a longer timeframe for financial obligations related to raising them. This may impact how assets and income-generating resources are divided.

The older spouse’s ability to care for young children may also be taken into account, affecting both property division and parenting arrangements.

Precedents and Case Law

Australian courts have recognized age difference as a relevant factor in several cases:

In JEL v DDF [2000] FamCA 1353, the court made an adjustment in favor of an older spouse due to their limited future earning capacity.

In Fields & Smith [2015] FamCAFC 57, the Full Court considered age disparity alongside other factors in deciding an equitable division of property.

In Marsh v Marsh [2014] FCCA 2459, an older spouse was awarded a greater share of assets due to their diminished ability to generate future income.

Conclusion

While 50/50 property settlements may seem like a fair starting point, Australian family courts consider various factors, including age difference, to ensure a just and equitable division. A 13-year age gap may influence property settlements, particularly if it affects earning capacity, retirement security, health, and future financial needs. Ultimately, the court tailors settlements on a case-by-case basis, ensuring that both parties receive a fair and reasonable outcome based on their circumstances.