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De Facto/Domestic Relationships
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There have recently been enacted significant legislative changes in relation to the treatment of assets of separating de facto couples.
Couples who separate after 1 March 2009 will have their property entitlements determined under the Family Law Act 1975 in the Family Court of Australia.
Previously, the division of property of de facto couples was governed by State legislation and determined by State Courts. The inconsistency between legislation meant that separating couples in different States could be subject to different procedures and outcomes in respect of their property division.
The numerous pieces of legislation have some similar elements however there are also fundamental differences between the Acts and it is vital that parties obtain independent legal advice as to their rights and responsibilities in their individual circumstances. The below discussion relates to the treatment of property of de facto couples under the Family Law Act.
What is a de facto relationship?
A de facto relationship is the relationship between two people who have been living together on a genuine domestic basis, irrespective of gender. Whether such a relationship exists is decided by looking at a range of factors which include:
• the duration of the relationship;
• the nature and extent of the common residence;
• whether there was a sexual relationship;
• financial dependency of the parties;
• ownership, use and acquisition of property;
• whether there are children of the relationship and the care arrangements for them; and
• the public aspects of the relationship, how the couple were perceived.
Couples who have been cohabitating for two years or more in a de facto relationship, or have been cohabitating for less than two years but have a child together may be entitled to make a claim under the Family Law Act.
It is important to note that if neither of those requirements are met, a party may still come within the scope of the legislation in the event one party made substantial contributions to the wealth and/or welfare of the family and that to not permit the commencement of proceedings would result in a “serious injusticeâ€.
Time frame for making an application to the Court
Proceedings must be instituted within two years after the day on which the relationship ended. If the relationship has ended more than 2 years ago, leave of the Court needs to be obtained.
Considerations when determining property division
The legislation gives the Court the power to adjust the property interests of one or both of the members of the de facto relationship, taking into consideration the financial and non-financial contributions of the parties during the relationship on one hand and “future needs†on the other hand. The Court’s ability to consider the future and make adjustments to property on that basis is perhaps the most fundamental change imported by the amendments.
When considering “needs factors†the Court looks at income, property and financial resources of the parties, their physical and mental capacity to obtain gainful employment, duties to look after children or others, financial needs and responsibilities of the parties, age and state of health of the parties and any other factor the Court thinks relevant.
Superannuation
Under the Family Law Act, superannuation is treated as property and the Court has the power to make an order dividing the superannuation interest between two parties as it may do with other assets and liabilities of the parties.
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