How Mediation Works in Property Settlement Disputes

When you are going through a separation, decisions about how to divide property can feel like a lot to carry. Mediation gives you and your former partner a structured, supported way to work towards agreement with the help of a trained, impartial professional. In Australia it is often one of the first steps people take before turning to a court. Understanding how it works can help you feel calmer and more prepared.

This is general information only and is not legal advice. Family law changed in important ways on 10 June 2025, so it is worth reading on with current rules in mind.

What mediation is

Mediation is a confidential process where an independent mediator helps you and your former partner talk through how to divide property, financial assets, and debts. The mediator does not decide the outcome for you. Their role is to help both people communicate, understand the issues, explore options, and reach an agreement you both choose.

A property settlement usually covers everything you own and owe, whether held jointly or in one name. That includes the family home, other real estate, vehicles, bank accounts, investments, business interests, superannuation, and debts such as mortgages, loans, and credit cards.

How property is decided in Australia

Mediation does not happen in a vacuum. Even when you settle privately, fair agreements are shaped by the same framework a court would apply. From 10 June 2025, the Family Law Amendment Act 2024 codified this approach directly in the Family Law Act 1975 (sections 79 and 90SM). In broad terms a court works through these steps:

1. Identify and value the property, including the parties' existing legal and equitable interests and their superannuation.
2. Assess the contributions each person made, both financial and non-financial, including as a homemaker and parent.
3. Consider each person's current and future circumstances, such as age, health, income, earning capacity, and care of children.
4. Check that the overall result is just and equitable.

A few changes from June 2025 are worth knowing about going into mediation:

• Family violence is now expressly relevant. Where relevant, the court must consider the effect of family violence on a party's contributions and on their current and future circumstances. Economic and financial abuse is recognised as a form of family violence under section 4AB. These principles apply to everyone separating, including couples negotiating outside court.
• Add-backs have ended. The court now looks at the property that actually exists at the time of settlement, rather than notionally adding back money already spent. Where relevant, it can still consider the effect of intentional or reckless wastage of property.
• Companion animals (pets) are dealt with separately from other property, with their own considerations.

These are general principles, not a formula. How they apply depends entirely on your circumstances, which is why independent legal advice matters before you finalise anything.

Full financial disclosure is required

Both people must give full and frank disclosure of their financial situation. Since 10 June 2025 this duty sits directly in the Family Law Act (section 71B for married couples and section 90RI for de facto couples), having previously lived in the court rules. The duty starts before any court proceedings and continues until the matter is resolved.

In practice you will usually gather bank statements, payslips and tax returns, property valuations, superannuation statements, loan and mortgage documents, and details of any other assets, debts, or financial resources. Mediation only works well when both people are open. If someone hides assets or debts, any agreement reached can be unfair and may be set aside or revisited later.

Is mediation compulsory?

It is worth being precise here, because a common misunderstanding can trip people up.

For parenting disputes, you generally must attempt family dispute resolution and obtain a section 60I certificate before applying to court, unless an exemption applies (for example, where there is family violence or urgency).

For property and financial matters there is no equivalent compulsory certificate. However, the courts' pre-action procedures expect you to make a genuine effort to resolve the dispute, including through negotiation or mediation, and to exchange relevant documents, before filing. Not following these steps can have consequences, including costs orders. So while property mediation is not strictly mandatory, attempting it is strongly encouraged and often expected.

Finding a mediator

For property matters, mediation is commonly conducted by a nationally accredited mediator under the National Mediator Accreditation System, and often by a family lawyer who also mediates. Family dispute resolution practitioners accredited by the Attorney-General's Department focus specifically on parenting disputes and can issue section 60I certificates, so they are most relevant when children's arrangements are also in play.

You can find practitioners through Family Relationships Online, community legal centres, Legal Aid in your state, or a referral from your family lawyer. Both of you need to be comfortable that the mediator is impartial.

The mediation process, step by step

Intake and preparation

Before any joint session, the mediator usually meets each person separately for an intake conversation. This covers your concerns, what you hope to achieve, how the process works, and confidentiality. It is also where the mediator assesses whether mediation is suitable and safe for both people.

You then prepare your financial information so both sides come to the table with a clear, shared picture of the property pool.

Joint sessions

In a joint session you and your former partner meet with the mediator to work through how to divide property and finances. The mediator keeps the conversation structured and balanced so both people are heard. Sessions often run for a couple of hours, and it is common to need more than one to work through everything. If talking face to face is difficult, the mediator may use shuttle mediation, moving between you in separate rooms to carry proposals back and forth.

Reaching agreement

When you reach agreement, the mediator usually records it in a written document, sometimes called a heads of agreement or memorandum of understanding. This sets out what you have agreed but is not legally binding on its own.

Turning agreement into a binding settlement

To make a property agreement legally effective, you generally use one of two paths, and both call for independent legal advice:

• Consent orders. You ask the court to make orders reflecting your agreement, without needing to attend a hearing. A registrar checks that the orders are just and equitable before approving them. Once made, they are legally binding and enforceable.
• Binding financial agreement. This is a private contract that does not need court approval. For it to be valid, each person must receive independent legal advice before signing, and the agreement must meet strict requirements under the Family Law Act.

Which path suits you depends on your circumstances. A family lawyer can explain the trade-offs and prepare the documents correctly.

If you cannot reach full agreement

Mediation does not always resolve everything, and that is okay. You might reach agreement on some issues and narrow down what is left. Some people try again with a different mediator or use arbitration; others apply to the court to decide the remaining matters. Even a partial agreement can save time and reduce what needs to be resolved later.

When mediation may not be suitable

Mediation is not appropriate for every situation. Where there is family violence, a significant power imbalance, or a refusal to disclose finances honestly, it may not be safe or workable, and a court process may be needed. A mediator screens for these issues during intake, and a family lawyer or Legal Aid can advise on the right path for you.

Where Separately fits in

If you are preparing for mediation, it helps to walk in with realistic expectations. Separately's online assessment gives you a clear, plain-English picture of how a property settlement might be approached in your situation, so you can think things through before you sit down to negotiate. It is a starting point for understanding, not a substitute for legal advice.

Whatever path you choose, getting independent legal advice before you finalise a settlement, whether through consent orders or a binding financial agreement, is the step that protects you down the track.