Many Australian couples live together, share finances, raise children and build assets without ever marrying. When one of these relationships ends, a common and understandable assumption is that “de facto” partners have fewer rights than married couples, or none at all. In most cases, that assumption is wrong.
Separating de facto couples generally have access to the same property settlement framework as married couples under the Family Law Act 1975 (Cth). But the path to a settlement comes with its own threshold questions, strict time limits and practical traps. Here is what separating partners need to understand.
What is a “de facto relationship”?
Not every couple who has lived together is in a de facto relationship in the legal sense. The Family Law Act sets out a definition and a list of factors a court weighs up. Broadly, a de facto relationship exists where two people (of the same or different sex) are not married to each other and are not related by family, but have a relationship “as a couple living together on a genuine domestic basis.”
No single factor is decisive. A court can consider things such as:
- the duration of the relationship;
- the nature and extent of the couple’s common residence;
- whether a sexual relationship existed;
- the degree of financial dependence or interdependence, and any financial support arrangements;
- ownership, use and acquisition of property;
- the degree of mutual commitment to a shared life;
- whether the relationship was registered under a State or Territory law (in NSW, under the relationships register);
- the care and support of children; and
- how the relationship was presented publicly.
Importantly, a de facto relationship can exist even where one partner is legally married to someone else, or is in another de facto relationship at the same time. Whether a qualifying relationship existed is often the first battleground in a dispute.
Do you actually have the right to a property settlement?
Establishing that a de facto relationship existed is only the starting point. To bring a property claim, at least one of a set of “gateway” criteria usually needs to be met. In general terms, these are:
- the relationship lasted at least two years in total; or
- there is a child of the relationship; or
- one partner made substantial contributions and it would cause serious injustice not to make an order; or
- the relationship was registered under State or Territory law.
There is also a geographic and residency connection to Australia that must be satisfied.
A note on Western Australia: de facto property matters in WA are dealt with under a separate State regime rather than the federal Family Law Act. This article is written for clients in New South Wales, but couples with a WA connection should seek specific advice.
The two-year time limit, do not lose it
De facto couples face a strict time limit: an application for property orders must generally be made within two years of the date the relationship broke down. After that, a claim can only proceed with the court’s permission, which is not guaranteed and requires establishing hardship.
This is one of the most important practical points on this topic. Because there is no single formal “date of divorce” to anchor a de facto separation, the breakdown date itself can be contested, and the clock may be running from a date earlier than a partner assumes. Anyone contemplating a separation should get advice on timing early.
How is property divided?
There is a widespread myth that assets are simply split “50/50.” That is not how it works. The court undertakes a structured evaluation to arrive at a division that is just and equitable in the circumstances, and there is no presumption of an equal split.
The framework has recently been reformed and codified, so the steps below should be treated as a general guide rather than a precise statement of the current statutory sequence:
- Identify and value the asset pool. This includes assets, liabilities and financial resources of both partners: the family home, savings, vehicles, businesses, investments, inheritances, debts and, importantly, superannuation. Full and frank financial disclosure by both parties is required.
- Assess contributions. These include financial contributions (income, savings, property brought into the relationship), non-financial contributions (renovations, unpaid work in a business), and contributions as a homemaker and parent. Contributions as a parent and homemaker are given real weight and are not treated as secondary.
- Assess future needs and other factors. The court looks forward, considering matters such as each person’s age and health, income and earning capacity, care of children, and financial resources. Reforms now also require express consideration of the economic effect of family violence on the parties.
- Consider whether the outcome is just and equitable overall, adjusting as necessary.
Recent reforms have also addressed matters such as the treatment of companion animals (pets) and the wastage or reckless dissipation of assets; these should be confirmed and, if relevant to the firm’s audience, expanded.
Superannuation
Superannuation can be split between separating de facto partners in the same way as for married couples. Because super is frequently one of the largest assets in the pool, overlooking it is a costly mistake.
Reaching an agreement without going to court
Most separating couples resolve property matters without a contested court hearing. The main options are:
- Informal agreement: quick and cheap, but not legally binding and offers no protection against a future claim.
- Consent orders: an agreement formalised and approved by the court, giving it legal force.
- Binding Financial Agreement (BFA): a private agreement that can be made before, during or after a relationship. A BFA is only binding if strict formal requirements are met, including that each party receives independent legal advice before signing.
BFAs and consent orders both provide certainty that an informal handshake agreement cannot. Given the two-year time limit, formalising an agreement also closes off the risk of a later claim.
Practical steps if you are separating
- Get advice early, particularly given the two-year time limit and the possibility that the breakdown date is disputed.
- Gather your financial documents: bank statements, tax returns, superannuation statements, loan and property records.
- Do not transfer, sell or hide assets. Disclosure obligations are strict, and asset dissipation can count against you.
- Keep communication constructive, especially where children are involved.
- Consider formalising any agreement through consent orders or a BFA rather than relying on trust.
How Owen Hodge Lawyers can help
Property settlements after a de facto separation turn on the specific facts of each relationship, its length, the contributions each person made, and the makeup of the asset pool. Our family law team can advise on whether you meet the threshold to bring a claim, help you understand a likely range of outcomes, and guide you through negotiation, consent orders, a Binding Financial Agreement, or court proceedings if required.
If you are separating or have recently separated from a de facto partner, contact Owen Hodge Lawyers to arrange a confidential discussion about your options.
This article contains general information only and is not legal advice. Laws change and their application depends on your individual circumstances. You should obtain advice tailored to your situation before acting.