Defacto Relationships

DE FACTO RELATIONSHIPS

Armstrong Legal are Australian Family Lawyers located in Sydney, specialising in legal matters surrounding de facto relationships.

The legal definition of a “de facto” relationship:

As set out in Section 4 of the NSW Property (Relationships) Act 1984, a “de facto relationship” is a recognized by the law as being a relationship where two adult persons:

• live together as a couple, and
• are not married or related to one another by family.

Since it was amended in 1999, this definition now includes same-sex couples.

Usually, you will need to demonstrate that you have lived together for at least two years. This is overlooked if there is a child of the relationship, or in other exceptional circumstances. Other criteria that can determine de facto status include:

• length of relationship
• co-habitation
• distribution of household duties
• financial interdependence
• joint assets
• the care and control of any children of the relationship;
• whether friends and relatives see you as "de facto";
• whether you intend the relationship to be permanent.

De facto status is not achieved through any formal ceremony, but automatically applies when two people meet the criteria. Unlike marriage, de facto status is not entirely portable. Whilst it is recognised in most states of Australia (except South Australia), Canada and New Zealand, it is not recognised the USA and many other countries.

The rights and responsibilities of de facto partners:

If you are in a de facto relationship, your legal rights and responsibilities are similar to those of married couples. For example, if your partner died, you would be entitled to the following:

• a share of the intestate estate under the Wills, Probate and Administration Act
• receive compensation under workers compensation law (if your partner dies during the course of employment).
• claim financial assistance under the Family Provision Act
• claim social security under the Commonwealth Social Security Act.

However, in the instance of a relationship breakdown, de facto couples are not covered by federal legislation for matters relating to property and spousal maintenance. These issues are dealt with under state law, and are heard in the Local, District or Supreme Court.

De facto relationships are only dealt with by Federal law for issues concerning children. The Family Law Act covers issues related to child support and parenting orders for children of de facto couples, and these are heard in the Family Court.

Property Settlement:

There are a number of property settlement options for de facto couples. Filing for property orders with the courts can be expensive, time consuming and stressful. For this reason it is preferable to try to reach an agreement outside of court.

1. Financial Agreements:

Some de facto couples choose to draw up domestic relationship agreements before or during their relationship, which are similar to the well-known “pre nuptial” agreement. In a similar way, separation agreements can be drawn up in anticipation of, or immediately following a relationship breakdown.

For these agreements to be legally binding, both parties must have signed the agreement and have received independent legal and financial advice before signing.

2. Consent Orders

In the case that there is a dispute, it is always advisable to enter into mediation. If an agreement can be made, it is then possible to apply for Consent Orders through the Court, which formalises the agreement. This is dependent on whether the court is satisfied that the agreement is “just and equitable” to both parties, and that both parties have sought independent legal advice.

If an agreement cannot be reached, you can apply for property orders.

3. Property Orders:

For situations where there has been no prior financial agreement, parties of a de facto relationship or a close domestic relationship can apply for property orders.

Applications for property orders must be made within 2 years of the end of a relationship. Applications are made to the Supreme Court (for large claims), District Court (up to $250 000) or the Local Court (up to $60 000).

The decision is then made through a court hearing. Both parties are expected to fully disclose their respective financial circumstances. A failure to make proper disclosure of a relevant matter is taken very seriously.

The Court considers four key factors in assessing property settlements.

1. The Court will ascertain the net asset pool of both parties.

The net asset pool is the total value of all the assets owned by either or both parties. The net asset pool includes anything acquired before or during the relationship, as well as after separation.

In ascertaining the net asset pool, the Court will also consider other financial resources over which a party has influence, control or prospective entitlements.

Ascertaining the net asset pool can be highly complicated. Accurate valuation of assets requires that many factors are taken into consideration, such as issues regarding taxation, stamp duties, and the appreciation or depreciation of asset values.

2. The Court will assess the contributions from both parties (both financial and non-financial).

There are many types of contributions that may have been made by either spouse. The Court considers all of the following:

1. financial contributions
2. non-financial contributions (as a homemaker or primary carer of children)
3. gifts, bonuses and inheritance
4. initial contributions (assets attained before marriage)

3. The Court will assess the future needs of both parties:

The Court takes into account many factors when deciding on the future needs of both parties. These include:

1. Age and health
2. Capacity to earn money
3. The property and assets of each party
4. New relationships (and new financial circumstances)
5. Future parenting responsibilities (care and support)

4. The Court will consider the practical effect of the proposed property settlement, and whether it is “just and equitable” to both parties. The decision is made taking into account all of these factors.

Generally, superannuation is not included in a property settlement between de facto couples. However, a Court is likely to take it into account when assessing the financial resources of each party.

How we can help you with your property settlement:

Reaching a property settlement can be complex and stressful, whether it is carried out through a financial agreement, consent orders or in a court hearing. Armstrong Legal are Australian Family Lawyers who specialise in property settlements for de facto relationships. The advice you can expect from us is both personal and practical, being tailored to your needs. We will inform you of your rights and obligations in a way that you can understand and at all times put you in a position to make informed decisions about the conduct of your case.

We are able to assist you with both the formalisation of agreements where there is no dispute or in situations where things are hotly contested.

Spousal Maintenance:

Under New South Wales law there is very limited legal obligation on one de facto spouse to maintain or support the other, either during the relationship or after separation.

To be eligible for spousal maintenance, the applicant must show that he or she has lost their earning capacity as a result of the relationship, but that they are prepared to participate in training and further education to increase their ability to earn.

Alternatively, spousal maintenance can be claimed when a party is unable to work because they are the primary carer for a child under 12. This child must be the child of the former spouse. The same applies if the applicant cannot work because they are caring for a physically or mentally handicapped child under 16.

Armstrong Legal experienced in the issue of spousal maintenance, and can provide you with valuable assistance to achieve the best result in making your claim.

De Facto Couples with Children:

Issues relating to the children of de facto couples fall under the Family Law Act, and thus are dealt with through The Family Court and Federal Magistrates Court.

The Family Law Act places parental responsibility on both parents, regardless of whether they separate or enter new relationships. According to sections 61B to 61DB of the Family Law Act, parental responsibility refers to the duties, powers, responsibilities and authority which parents have in relation to their children.

Pre-Action Procedures

Reaching a settlement out of court saves you and your family considerable time, stress and money.

When applications for parenting orders are filed with either the Family Court or the Federal Magistrates Court, both parties are ordered to undergo “pre-action procedures” including participation in a dispute resolution. A court will require a certificate from an accredited family dispute resolution practitioner before an application for parenting orders can be filed with the court. This is a requirement except in circumstances where there is family violence, child abuse or urgency.

Armstrong legal do not only represent you in Court. We are committed to assisting you in the process of dispute resolution outside of court as well as the formalisation of agreements.

Applying for Parenting Orders

If no agreement can be reached then an application for parenting orders must be submitted to either the Family Court of the Federal Magistrates Court. A parenting order may also be applied for by:

• The child
• A grandparent
• Any other person concerned with the care and welfare of the child

The decision is then made through a court hearing. The court bases its decision on what is in the best interest of the child or children. More information about how the court makes its decision can be found Section 60CA, Section 60CC and Section 64B of the Family Law Act 1975.

Child Support:

Under the Child Support (Assessment) Act, the primary carer of children from a de facto relationship can make a claim for child support from the other parent. The Child Support Agency is responsible for administering your child support arrangements, and assessing the amount of support which should be provided. The decision is based on each parent's income, the number of children and their living arrangements.

It is possible to enter into a private child support agreement with your former de facto spouse, without having to go through the Child Support Agency. Armstrong Legal is experienced in the drawing of private child support agreements and can assist you in achieving the best outcome for you and your children.