Since 1 March 2009, The Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008 has brought significant changes to the way property is divided between de facto couples in New South Wales.
For couples who meet the qualifying tests, their property division will be determined using the considerations established under the Family Law Act 1975 bringing them virtually into line with married couples.
Under the legislation, couples can be opposite sex, same sex or even multi-partnered relationships.
To qualify as a de facto couple under the Family Law Act 1975, a de facto couple must meet three tests, the first being:
- The parties must have a geographical connection to a participating jurisdiction; ie. a state or territory that has referred its power to the Commonwealth
- The relationship must be a genuine de facto relationship and not a merely dependent domestic relationship
- The parties’ relationship broke down after 1 March 2009
The second test assesses whether the relationship is a genuine de facto relationship. The following indicators are a non-conclusive guide:
- Duration of the relationship
- Nature and extent of their common residence
- Existence of a sexual relationship
- Financial dependence or interdependence
- Ownership, use and acquisition of property
- Degree of mutual commitment to a shared lifestyle
- Whether the relationship is or was registered in a state or territory that has a relationship register
- Care and support of children
- Reputation and public aspects of the relationship
The third test requires at least one of the following to apply:
- The period of the relationship is at least 2 years (in whole or in aggregate), or
- There is a child of the relationship, or
- A serious injustice would follow if an order were not made, or
- The relationship is registered; whilst registration is significant, it is not sufficient, by itself, to determine whether a de facto relationship exists.
Under the Family Law Act 1975, a marriage is treated much more as a socio-economic partnership. As time goes by, less weight it given to strict financial contributions made by each person ie. who brought property into the relationship. Non-financial contributions such as contributions as homemaker and parent are also relevant in determining a fair division of property. Superannuation interests are taken into consideration and spousal maintenance can be ordered. This can be quite at odds with the intentions of many people in de facto relationships for whom “what I have is mine and what you have is yours” is the common mantra.
Couples to a relationship that broke down before the commencement day (1 March 2009) may choose to come under the Family Law Act 1975. They are only able to make such a choice if there are no state Court Orders or financial agreements dealing with their financial matters and their choice is unconditional. The choice must be in writing, signed and include certification that both people have received independent, legal advice.