The Impact of Amendments on De Facto and Unmarried Same-Sex Couples' Property Settlements

Background

The Civil Law and Justice Legislation Amendment Act 2018, which received Royal Assent in October 2018, introduced a number of changes to the Family Law Act with regard to a wide range of matters. One of these amendments concerns property settlements for de facto and unmarried same-sex couples.

De facto couples are entitled to much the same rights and claims as married couples with regards to family law matters, including financial settlements and arrangements for any children of the relationship. However, in one particular respect de facto and unmarried sex same couples were, until recently, treated differently compared to married couples.

Prior to the 2018 Amendment Act, de facto and unmarried same-sex couples were not in the same position as married couples if they had not started proceedings in Court for a property settlement within the applicable time limit following the end of their relationship.

While the situation has always been that married or de facto couples could consent to the Court making orders outside of the applicable time limit, the provisions of the Family Law Act allowed married couples to do so using an Application for Consent Orders. This fast track process only requires the parties to file forms with the Family Court, whereas de facto couples were required to make a formal application and appear before a judge to obtain leave even if they both consented to a settlement.

Key Issues

The concept of a de facto relationship has been recognised in Australian law for many years so it may come as surprise to many Australians that such relationships are not recognised in most countries, including large common law jurisdictions such as the USA or the UK. Within Australia, however, the legal rights and responsibilities for de facto couples are similar to those who are married. For example, if one partner dies the surviving partner would be entitled to a share of an intestate estate and claim financial assistance under the Succession Act.

According to the Family Law Act a de facto relationship is present if the parties are not legally married to each other, are not related by family and there is a relationship involving living together on a genuine domestic basis as a couple. Usually, the couple would need to demonstrate they have lived together for at least 2 years, but this requirement may be overlooked if there is a child of the relationship or other exceptional circumstances apply. This status applies automatically when two parties meet the necessary criteria and not as the result of a specific ceremony.

Married couples, following the breakdown of their relationship, are required to commence proceedings for a property settlement within 12 months of their divorce becoming final. Couples that are “out of time” could then use a process involving an Application for Consent Orders. This is a comparatively straightforward process, only requiring the parties to file forms with the Court without it being necessary to appear in Court before a judge. 

By way of contrast, unmarried same-sex couples and de facto couples were required to make a formal application to the Court and appear before a judge to obtain the leave of the court even if they both consented to a property settlement. If leave was not granted by the Court, previously the only and potentially costly recourse was to the state courts.

Just as with separating married couples, if a de facto relationship breaks down, the couple can come to an agreement outside of the Court system through alternative dispute resolution. If an agreement cannot be reached the couple can apply for property orders within 2 years of the end of the relationship. Applications are made to the Federal Circuit Court and the Family Court of Australia. A decision is then made through a Court hearing, in which both parties are expected to make full disclosure of their financial circumstances.

What does it mean?

Before the amendment made in the Civil Law and Justice Legislation Amendment Act 2108, de facto and unmarried same-sex couples, whose relationship had come to an end, were not in an equal position compared to married couples if they had not started proceedings in Court for a property settlement within the applicable time limit of 2 years.

Married couples are expected to start proceedings within 12 months of finalising their divorce. Both married and de facto couples were able to consent to the Court making orders out of time but the process was different.

The change contained in the Amendment Act will allow unmarried same-sex and de facto couples to use the Application for Consent Orders process in the same way as married couples. It will result in cost savings for couples that have not been able to finalise their property settlement within the time limit but need to have a property settlement to finalise matters.

De facto and same-sex couples have been recognised in the Family Law Act for many years so the recent amendment can be regarded as an important, if overdue, step towards granting the same rights as married couples where a relationship has broken down.

The amendment will also allow de facto couples, who reach an agreement using alternative dispute processes such as mediation or collaborative practice, to formalise the end of their relationship with a legally binding agreement while avoiding attendance in the Federal Circuit Court or Family Court.

Where the parties have chosen to resolve matters in an amicable way it was unreasonable to expect them having to go to Court to resolve matters which can be a costly, stressful and potentially uncertain experience.

Contact Us

Szabo & Associates, Solicitors, can provide you with expert advice on a wide range of family matters, including property settlements, divorce and separation, domestic violence, prenuptial agreements, child custody, child support and spousal maintenance. Please call us today on 02 9281 5088 or fill in our online contact form.