A more low-level solution using bitwise arithmetic to count subsets that should be easy to translate to Java:
def sublists(xs):
l = len(xs)
for i in range(1 << l):
incl, excl = [], []
for j in range(l):
if i & (1 << j):
incl.append(xs[j])
else:
excl.append(xs[j])
yield (incl, excl)