Updated October 2026
CM Lawyers’ Ultimate 50 Things You Need to Know About Property Settlement During Divorce — Article 34
Child custody arrangements can significantly impact property settlements during divorce or separation proceedings. In New South Wales, the Family Law Act 1975 requires the court to consider each party’s contributions and current and future circumstances, including care of children and their housing needs. Understanding how these matters affect property settlements can help achieve a just and equitable division of assets.
A parent does not automatically receive the family home or a fixed percentage because the children live mainly with them. The practical effect of caring responsibilities matters, together with the family’s overall financial circumstances.
Understanding the Impact of Child Custody on Property Settlements
When a marriage or eligible de facto relationship ends, separating parties may negotiate their property settlement. If agreement cannot be reached, the Federal Circuit and Family Court of Australia can determine the dispute. Its task is to decide whether, and how, property interests should be adjusted so the outcome is just and equitable.
“Child custody” is a common expression, but Australian family law uses concepts including parenting arrangements and parental responsibility. Where a child lives and spends time is distinct from responsibility for decisions about the child. The child’s best interests are paramount when making parenting orders; property orders involve a separate financial assessment.
Under the property framework operating from 10 June 2025, the court identifies property and liabilities, assesses contributions, considers current and future circumstances, and makes only just and equitable orders. Relevant economic effects of family violence must also be considered.
Primary Caregiver Considerations
The court considers the needs of a parent responsible for the day-to-day care of children. That parent may require a greater share of the available property to provide suitable housing and stability. Section 79(5)(f) expressly addresses care of children under 18 and the need of either parent to provide appropriate housing.
However, retaining the existing family home depends on the broader circumstances, including its value, the mortgage and available funds. A practical proposal should explain how ongoing repayments, rates, insurance and repairs would be met. Both parents’ housing needs should be considered.
Financial Impact of Parenting Arrangements
Parenting arrangements can affect both parties’ financial circumstances. The parent providing more care may face increased living expenses, child care and educational costs. The other parent may also need accommodation suitable for overnight stays and may have child support obligations. It should not be assumed that their living expenses are necessarily lower.
Child support is generally dealt with separately from property division, although relevant child support payments and liabilities form part of the property assessment. A settlement proposal should distinguish assets being divided from ongoing financial support.
Capacity to Earn Income
The court may consider the effect of parenting arrangements on each party’s capacity to earn income. The parent providing primary care might have limited employment opportunities because of caregiving responsibilities, affecting their future financial stability and the division of assets. Relevant considerations include earning capacity, the marriage’s effect on employment, and protecting a continuing parenting role.
Keep practical evidence of work hours, school schedules, child care availability and the children’s additional needs. This helps explain why a proposed return to full-time work may be unrealistic.
For example, a useful budget distinguishes regular child care fees from occasional babysitting and identifies whether work hours fit school or therapy appointments. Record who arranges and attends those appointments, as well as who pays. These details give a clearer picture than simply describing one parent as the primary caregiver.
Does Equal Parenting Time Mean an Equal Property Split
Equal parenting time does not automatically produce a 50–50 property settlement. The court’s assessment also includes contributions, income, financial resources and each party’s circumstances. Parents sharing care may still have different housing costs or earning capacities. Equally, providing more care does not establish a fixed additional percentage. A proposed outcome should be assessed against the complete financial picture, rather than calculated from the number of nights alone.
Common Pitfalls in Property Settlements Involving Children
Failing to Consider the Children’s Needs Adequately
One common mistake is not fully accounting for the children’s needs and how parenting arrangements affect each parent’s finances. Prepare a realistic budget for accommodation, education, health care and transport. Distinguish existing expenses from estimates and explain any expected changes as the children grow.
Overlooking the Primary Caregiver’s Contributions
Another mistake is failing to recognise the primary caregiver’s contributions to the family. Raising children and maintaining a household are recognised contributions, even when they do not generate wages. Keep a clear account of each parent’s role during the relationship and after separation, alongside financial contributions.
Ignoring Long-Term Financial Stability
Parties can underestimate how care arrangements affect their long-term financial stability. Not planning for ongoing child care expenses and reduced earning capacity can lead to financial difficulties. Compare the practical value of a proposed settlement: a larger share of property may still leave insufficient cash for everyday expenses.
Accurate planning also depends on complete financial information. Parties must comply with their ongoing disclosure obligations. Gather relevant bank statements, loan balances, tax records, superannuation information and valuations before assessing settlement options.
Case Study of Kahlon & Ryman
In Kahlon & Ryman [2021] FedCFamC2F 417, the Court considered property arrangements following a de facto relationship of approximately ten years. The mother cared primarily for two autistic children. The judgment recognised that their care demands limited her ability to undertake paid employment.
Although the father’s overall contributions were assessed as slightly greater, the Court found the mother’s future needs substantial. It considered that she could not reasonably be expected to obtain significantly remunerative employment for many years. The case demonstrates why practical caring responsibilities must be assessed alongside financial contributions.
Financial Consequences
The Court ordered the home to be sold. After the mortgage, sale costs and specified relationship debts, the remaining proceeds were divided 70% to the mother and 30% to the father, with provision for an equal superannuation split. The primary carer was not simply awarded the house.
This 2021 decision predates the June 2025 property reforms. It illustrates an individual outcome, rather than establishing a standard percentage for parents with primary care. Current advice must apply the legislation now in force to the particular family’s circumstances.
Statistics on Care Arrangements After Separation
The Australian Institute of Family Studies’ April 2026 report, Care Time Arrangements after Parental Separation: Latest Trends, examines care arrangements. Its analysis of June 2024 data concerning children of Child Support Program payees found:
- 55.4% were in the “mother above primary care” category, meaning 87–100% of nights with their mother.
- 13.2% were in shared care, defined as 35–65% of nights with each parent.
These figures concern the Child Support Program population, not all separated families. Administrative records may also lag changes in actual arrangements. They describe care patterns and do not establish how frequently courts award a larger property share or predict an individual settlement.
Preparing for a Property Settlement in NSW
Start by recording the actual care arrangements, preparing a budget for both households and identifying assets and debts. Gather documents supporting any limits on paid work. Consider whether retaining the home is affordable and what alternatives would provide suitable accommodation.
Before accepting a proposal, compare the amount each parent would actually have available after debts and transaction costs. Consider access to cash, likely accommodation expenses and whether the proposed arrangements can be maintained. Put questions about uncertain valuations or missing documents to your solicitor before committing to an agreement.
Where safe and appropriate, negotiation or mediation can help resolve the financial issues. If agreement is reached, obtain advice about formalising it through consent orders or a binding financial agreement. These options have different legal requirements.
You do not have to wait until divorce to address property. For married parties, a property application ordinarily must be made within 12 months after divorce becomes final. For de facto partners, the ordinary limit is two years after relationship breakdown. Permission to apply late is not guaranteed.
For advice about how parenting arrangements affect your property settlement in NSW, contact CM Lawyers. We can help you assess your financial position, understand the relevance of caring responsibilities and consider a workable settlement.
Key resources
- Family Law Act 1975 — The current legislation governing property division and parenting matters. See sections 79 and 90SM for property settlements.
- Kahlon & Ryman [2021] FedCFamC2F 417 — A case illustrating how substantial caring responsibilities can affect a property outcome. Link opens the full judgment on AustLII.
- AIFS report on care arrangements after separation — April 2026 research supporting the care statistics above. Read the report PDF for the definitions on page 4, limitations on page 5 and figures on page 7.
- Property law changes from June 2025 — The Attorney-General’s Department explains the current property framework.
- Property settlements and time limits — The Court explains property division, relevant factors and application deadlines.
- Formalising a property agreement — The Court explains consent orders and financial agreements.
