What is property settlement?

A property settlement is the process of determining how the parties’ assets, liabilities and financial resources will be divided following the breakdown of a relationship. This may include the family home, other real estate, bank accounts, gold jewellery, shares, investments, businesses, superannuation and debts. The outcome depends on the parties’ individual financial and personal circumstances.

What is spousal maintenance?

Spousal maintenance is financial support paid by one former spouse or de facto partner to the other after separation, where one person is unable to adequately support themselves and the other has the capacity to provide financial support. It is separate from the division of property and may involve ongoing or periodic payments.

Understanding property settlement vs spousal maintenance can help separating couples identify which financial issues need to be addressed and whether both are relevant to their circumstances.

Property Settlement and Spousal Maintenance Serve Different Purposes

Although property settlement and spousal maintenance are often discussed together, they serve different purposes. A property settlement usually involves determining how the parties’ assets, liabilities and financial resources should be divided. Spousal maintenance, on the other hand, involves one former partner providing financial support to the other for a period of time, where the recipient is unable to adequately support themselves and the other party has the capacity to provide support. 

Understanding the distinction is important because the legal considerations, evidence required and time limits can differ. In some circumstances, both property settlement and spousal maintenance may need to be considered as part of the overall financial arrangements following separation.

The difference is therefore not simply how money is paid. The two processes address different financial issues.

What Does a Property Settlement Address?

A property settlement considers how the parties’ financial interests should be dealt with after separation.

The Family Law Act 1975 (Cth) sets out the framework for property matters more clearly. This includes identifying property and liabilities, considering financial and non-financial contributions, assessing current and future circumstances and determining whether the proposed outcome is just and equitable.

A settlement may address matters such as the family home, investments, businesses, superannuation and debts.

Its purpose is not, however, to determine automatically whether one former partner requires ongoing financial support.

When Can Spousal Maintenance Become Relevant?

Spousal maintenance is not automatically payable because one person earns less than the other.

The issue generally involves whether the person seeking maintenance can adequately support themselves and whether the other party has capacity to assist.

Individual circumstances matter. These may include income, reasonable living expenses, age, health, ability to work, financial resources and responsibility for caring for children.

Someone who stepped back from paid work to care for children may find themselves in a weaker financial position once the relationship ends. Whether that results in a maintenance entitlement depends on the broader circumstances rather than the income difference alone.

From 10 June 2025, the Family Law Act codified that the economic effect of family violence may also be relevant when the Court considers an appropriate spousal maintenance order.

Can Both Financial Issues Arise During the Same Separation?

Potentially, yes.

This is one of the most important distinctions when considering property settlement vs spousal maintenance.

A couple may be negotiating how their property should be divided while one person is also experiencing difficulty meeting reasonable living expenses. A maintenance issue may therefore arise before, during or alongside the resolution of property matters.

The existence of a property settlement does not itself establish an entitlement to maintenance. Equally, seeking maintenance does not determine how property should ultimately be divided.

Each issue needs to be considered in light of its own legal requirements and the parties’ overall financial circumstances.

What Happens to Maintenance After Property Matters Are Resolved?

A property settlement does not automatically end or determine spousal maintenance.

The effect of a property settlement on maintenance will depend on the circumstances and how the parties’ financial arrangements have been resolved.

A property settlement may significantly change a person’s financial position. For example, it may affect available assets, liabilities, housing costs or financial resources. Those changes may be relevant when considering whether a person can adequately support themselves or whether the other party has capacity to provide support.

Why the Overall Financial Position Matters

Property settlement and spousal maintenance are legally distinct, but they do not exist in financial isolation.

Changes to property ownership, debts, available resources and living arrangements can affect a person’s broader financial circumstances. Reliable financial disclosure can therefore be important when assessing the overall position and considering proposed financial arrangements.

This is also why separating couples should be cautious about treating one financial agreement as resolving every possible financial issue without understanding exactly what has been addressed.

The Relevant Deadlines Can Affect Your Options

For married couples, applications for property settlement or spousal maintenance generally need to be commenced within 12 months after a divorce becomes final. Parties do not generally need to wait for divorce before addressing these financial matters.

For eligible de facto relationships, applications relating to property settlement or maintenance generally need to be commenced within two years of relationship breakdown.

Court permission may be required to commence proceedings outside the applicable period and is not automatically granted.

How Shan Lawyers Can Assist

Property settlement and spousal maintenance may arise from the same separation, but they involve different legal considerations. Understanding how they interact matters before agreeing to financial arrangements with longer-term consequences.

Shan Lawyers assists clients across Melbourne and Victoria with property settlement, spousal maintenance and related financial matters. Our experienced family lawyers in Melbourne provide practical guidance based on each client’s circumstances and financial position.

If you are uncertain whether property settlement, spousal maintenance or both may be relevant after separation, contact Shan Lawyers for advice about your financial circumstances and the options available.

About the Author

Thirumalai Selvi Shanmugam is the founder, Director, and Principal lawyer at Shan Lawyers and is a leading family law specialist in Australia whose expertise is often sought by organisations and the media.

Disclaimer

This article provides general information only and does not constitute legal advice. Family law matters are fact-specific, and available options depend on the circumstances of each case.

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