Family Law and De Facto Relationships
De facto relationships are dealt with under the Family Law Act 1975 as a result in changes to the law in which all states and territories with the exception of Western Australia passed their power in relation to dealing with the division of property between de factos to the Commonwealth Government. The changes to the law also mean that same-sex relationships are dealt with within the act in precisely the same way as all other relationships.
The Legal Definition Of A “De Facto” Relationship
The Act states you are in a de facto relationship with another person if you are not legally married to each other, you are not related by family and you have a relationship as a couple living together on a genuine domestic basis.
In assessing if you are living together on a genuine domestic basis, the court may look to:
- the duration of the relationship;
- the nature and extent of common residence;
- whether a sexual relationship exists;
- the degree of financial dependence or interdependence and arrangements for financial support;
- the ownership, use and acquisition of their property;
- the decree of mutual commitment to a shared life;
- whether the relationship is or was registered under a prescribed law of a State/Territory;
- the care and support of children; and
- the reputation and public aspects of the relationship
The Act recognises that a party could be in multiple de facto relationships, or that a person who is married could be a party to de facto property proceedings (refer to s4AA(5)(b)).
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.
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 all states of Australia, Canada and New Zealand, it is not recognised in the USA and many other countries.
Other jurisdictional requirements for de factos
In addition to meeting the definition of a de facto relationship, a party who makes an application to the court must also satisfy one of the jurisdictional requirements specified at section 90SB of the Act:
- that the period, or the total of the periods, of the de facto relationship is at least 2 years; or
- that there is a child of the de facto relationship; or that:
(i) the party to the de facto relationship who applies for the order or declaration made substantial contributions of a kind mentioned in paragraph 90SM(4)(a), (b) or (c); and
(ii) failure to make the order or declaration would result in serious injustice to the applicant; or
- that the relationship is or was registered under a prescribed law of a state or territory.
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 Succession Act;
- receive compensation under workers compensation law (if your partner dies during the course of employment);
- claim financial assistance under the Succession Act;
- claim social security under the Commonwealth Social Security Act.
There are a number of property settlement options for de facto couples. Filing for property orders with the court can be expensive, time-consuming and stressful. For this reason it is preferable to try to reach an agreement outside of court.
Some de facto couples choose to draw up financial 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 certain independent legal and financial advice before signing.
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.
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 Federal Circuit Court (Federal Magistrates Court) of Australia and the Family Court of Australia.
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.
- 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.
- 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:
- financial contributions
- non-financial contributions (as a homemaker or primary carer of children)
- gifts, bonuses and inheritance
- initial contributions (assets attained before marriage)
- 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:
- age and health;
- capacity to earn money;
- the property and assets of each party;
- new relationships (and new financial circumstances);
- future parenting responsibilities (care and support);
- 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.
Under Australian family 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. 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.
The right to maintenance for married and de facto couples are outlined in section 72 and section 90SF(1) of the Act respectively.
An application for married couples must be made within 12 months of the date of the divorce application being filed. For de facto couples an application must be made within two years of separation. The court may consider granting leave for a party to file an application after this time.
Matters for consideration for married couples are outlined in sub-section 75(2) and for de facto couples in sub-section 90SF(3) of the Act.
Ultimately there is three limbs to the test for spousal maintenance. The three parts to the test are as follows:
- whether or not the person applying for the maintenance is exercising, to a reasonable extent, their ability to support themselves;
- whether or not the person applying for maintenance after exercising their ability to support themselves has a reasonable financial need; and
- whether or not the person that is being asked to provide the maintenance has the financial capacity to do so, having regard to their own commitments and standard of living which is reasonable in all of the circumstances.
Spousal maintenance can be made payable for a specified period such as to allow a person to complete a course of education, or up until the children reach school age, or may be payable indefinitely, until varied by subsequent court order.
The court has the power to vary any existing maintenance order provided there has been a significant change in circumstances since the making of the order. Such variations may be to increase, decrease or cease future payments.
Spousal maintenance can also be payable on an interim basis up until final determination of the matter. Such orders are based upon the same legal criteria as final payments, but are more arbitrary in their making because of the limited way in which evidence is available to the court on an interim hearing. In practical terms, such orders for interim spousal maintenance are made on the basis of needs and maintaining the status quo of the parties up until a final determination.
A court can order urgent spousal maintenance (refer to section 77).
A lump sum and/or the transfer of property can be viewed as payment of spousal maintenance (refer to section 77A).
Parties can contract out of spousal maintenance obligations by signing a financial agreement.
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 Circuit 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.
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 Circuit 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 Act.
Under the Child Support (Assessment) Act 1989, 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 help you achieve the best outcome for you and your children.
Prior to the making of maintenance orders (pursuant to section 90SD of the Family Law Act) or property adjustment orders (pursuant to section 90SK of the Act) the court must be satisfied of the following:
- that either or both of the parties to the de facto relationship were ordinarily resident in a participating jurisdiction when the application for the order was made; and
- that either:
- both parties to the de facto relationship were ordinarily resident during at least a third of the de facto relationship; or
- the applicant for the order made substantial contributions, in relation to the de facto relationship, of a kind mentioned in paragraph 90SM(4)(a), (b) or (c); in one or more states or territories that are participating jurisdictions at the application time; or
- the parties to the de facto relationship were ordinarily resident in a participating jurisdiction when the relationship broke down.
Time Limits On De Facto Applications
An application for property adjustment or maintenance must be made within two years of separation (refer to s.44(5) of the Act).A party may seek leave to make an application after this time if the court is satisfied under section 44(6) that either:
- hardship would be caused to the party or a child if leave were not granted; or
- in the case of an application for an order for the maintenance of the party – the party’s circumstances were, at the end of the standard application period, such that he or she would have been unable to support himself or herself without an income tested pension, allowance or benefit.
Should We Register Our De Facto Relationship?
- By registering a de facto relationship, the document or “certificate” can be used as proof of the existence and duration of the relationship.
- Registration may cause rights and obligations that are similar to marriage.
- These rights and obligations may be created even though the parties have not lived together for a period of two years (refer to s90SB(d)).
De Facto Legislation Changes Overview
- All states except Western Australia have referred their powers to the Commonwealth in relation to dealing with property adjustments after the breakdown of a de facto relationship.
- For the referring states and territories the Act now deals with property and maintenance issues for heterosexual and same-sex de facto couples.
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 can help you with both the formalisation of agreements where there is no dispute or in situations where things are hotly contested, so please contact us.