Over the last decade an increasing number of Australians are living in de facto relationships, while marriage rates have fallen.
Reflecting this societal change, the law was changed in 2009 (2002 in Western Australia) so that the same law now applies to separating de facto couples as applies to separating married couples. That is, any financial dispute arising from the breakdown of a de facto relationship is decided by the Family Court and the Family Law Act (the Family Court Act in WA).
What is a de facto relationship?
The basic test is whether the parties, of the same or opposite sex, lived together as a couple on a genuine domestic basis. In applying that test, the Court will consider factors including:
- the length of the relationship
- how and for how long they lived together
- the existence of a sexual relationship
- the financial arrangements, particularly whether the parties intermingled their finances or if one person financially supported the other
- any joint purchase of property
- whether there were children of the relationship and how they were cared for
- the public reputation of the relationship and the degree of the parties’ commitment to a shared life
- any registration of the relationship.
If a party wishes to apply to the Court for property settlement following a de facto relationship breakdown, one or more of the following criteria must also be met:
- the parties lived together for a total of at least two years
- there was a child/children of the relationship
- the applicant made substantial contributions to the other party’s property.
A de facto relationship can exist even if one or both parties were, at that time, in a relationship or living with or married to someone else. Indeed, a mistress may satisfy the definition of having been in a de facto relationship with her married partner.
De facto property settlement
The laws that now determine a property settlement between a separating de facto couple are substantially the same laws as apply to a separating married couple.
In general terms, if the Court determines that there should be a property division between the parties, the first step is to work out what is in the pool of net assets to be divided. That pool includes all the assets and liabilities in each person’s name and in the parties’ joint names, as well as each person’s share of an asset owned jointly with another person. In Western Australia superannuation is not considered as an asset for separating de-facto couples.
Next, the Court must consider what contributions each partner made and consider their respective future needs, in order to work out the percentages of the net assets they will each receive. Contributions include financial contributions – i.e. who earnt what, who brought what lump sums into the relationship, who bought and paid for what – and non-financial contributions – such as being a homemaker and parent, physically renovating a home or landscaping a garden, managing the parties’ financial affairs, etc. Future needs are things like income, earning capacity, financial resources, ongoing care of children, age, health, etc.
De facto spouse maintenance
Following the breakdown of a de facto relationship, as is the case following the end of a marriage, one party may be entitled to “spouse” maintenance from the other party, although usually only for a limited period of time. Such maintenance will only be ordered if:
- the applicant cannot support her or himself because of childcare responsibilities or if she or he cannot work due to health, age or other incapacity, and
- the other party has the capacity to pay such maintenance once he or she has met his or her financial obligations to any children and his or her own reasonable living expenses.
De facto relationships are an increasingly common part of modern life in Australia.
There are a range of factors of which the Court must be satisfied to find that someone was in a de facto relationship. When such relationships end, the same law regarding property settlement and spousal maintenance substantially applies as applies to separating married couples. Arrangements for children are also decided in the same way, regardless of whether their parents were married, in a de facto relationship or not even living together.
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