Property – error in treating non-commutable military pension as capitalised asset…

family law casenotes

…rather than income stream – double counting of pension as asset and future income

In Preston [2022] FedCFamC1A 157 (5 October 2022), the Full Court (Alstergren CJ, McClelland DCJ & Austin J) heard a husband’s appeal from final property orders made by a judge of Division 2 of the Federal Circuit and Family Court of Australia.

The trial judge ordered a 58.5:41.5 division in favour of the husband, treating the husband’s military pension as a capitalised asset.

The Full Court said (from [11]):

“It was impossible to commute the military pension … and neither party ultimately sought a superannuation-splitting order in respect of it … so the expert opinion evidence of it having a capitalised value of $638,109 … lost its utility.

[12] …  [T]he primary judge counted it as an asset at the capitalised value … even though she acknowledged neither party sought superannuation-splitting orders. …



[14] … [H]er Honour concluded the husband had a significantly higher income-earning capacity than the wife … which in part stemmed from his indefinite receipt of the military pension …

[15] There was no need to ascribe a capitalised value to the military pension when no splitting order was sought in respect of it …


[17] Having been notionally counted as an asset in the balance sheet … the primary judge’s findings necessarily meant that the husband’s 58.5% share of the assets and superannuation incorporates the military pension at its capitalised value of $638,109, even though he does not and never will have that capitalised sum available for his use.


[20] The primary judge’s methodology caused the military pension to be impermissibly counted twice – first as an asset and then as a source of constant income. …”


The appeal was allowed; the final order set aside, the court re-exercising its discretion ordering a 50:50 division of the asset pool; and costs certificates ordered for both parties.  

Craig Nicol and Keleigh Robinson are co-editors of The Family Law Book. Both are accredited specialists in family law (Queensland and Victoria, respectively). The Family Law Book is a one-volume loose-leaf and online family law service (

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