Broadly speaking, people are allowed to spend their money for usual expenses after separation.

Up until recently, if someone ‘wasted’ money in a reckless, negligent or wanton manner (such as gambling, substance addictions, large cash withdrawals and even legal fees), the Court could notionally ‘add back’ that money when valuing the asset pool in Step 1 of the settlement calculations. Basically, the Court could pretend the money still existed.

On 10 June 2025, there were big changes to property laws in the Family Law Act. Soon after, the Court in the Shinohara case said now, the Court can only divide what still exists. We can’t notionally add back money that’s gone.

So, what happens if someone goes on a wild spending spree after separation? Well, the Court can still factor that in during Step 3 of the property settlement calculations, as a ‘current and future circumstance’. For example, the person who spent the money could (but not always) get a reduced percentage of what is left.