Significant Changes to the Family Law Act – Part 1 – Changes to Property Settlement Framework

On 10 December 2024, the Family Law Amendment Act 2024 received Royal Assent and became law changing significant aspects of the Family Law Act 1975 which is the governing legislation for family law matters.  The changes are far-ranging. This is Part 1 in a series of articles explaining those changes.

The most significant changes in the amendment will be to how property settlement matters are determined. Parliament has now inserted further considerations that the court must take into account when determining the division of property in cases involving de facto or married couples.

Firstly, the Court is codifying previous decisions about what is called the 5-step process for determining property settlement matters which in summary is:

1. Identifying the parties’ legal and equitable interest;
2. Determining whether it just and equitable to make a property settlement order;
3. Considering the parties’ contributions to the property pool and to the welfare of the family; and
4. Considering the parties’ future needs; and
5. Ultimately making Orders that are just and equitable.

In determining whether it is just and equitable for a property settlement to occur, the Court is now expressly required under Section 79(3) (married couples) or 90SM(3) (defacto couples) to:

1. Identify the existing legal and equitable rights and interests of the property of the parties in any existing liabilities of the parties; and
2. Take into account:

1. the considerations set out in subsection (4) (considerations relating to contributions); and
2. the considerations set out in subsection (5) (considerations relating to current and future circumstances).

Parliament has now helpfully amalgamated all of the previous future needs factors also known as Section 75(2) factors (married couples) or 90SF(3) factors (de facto couples) under the new Section 79(5) (married couples) and Section 90SM(5) (de facto couples).  

This list has been expanded but you can find further details regarding those factors in my article “The Forgotten Considerations In Family Law Property Settlements”.

The new factors are:

Section 79(5)(a) or Section 90SM(5)(a)- Family violence

This reads “the effect of any family violence, to which one party to the marriage has subjected or exposed the other party, on the current and future circumstances of the other party, including on any of the matters mentioned elsewhere in this subsection.”

Whilst this is a new subsection, and it is unclear how the Court will interpret such a subsection, there is substantial case law about the Court’s treatment of family violence in property matters and I have also written about this in my article “Relevance of Domestic Violence In Family Law Property Settlements”. Consideration of family violence has also been inserted into Section 75(2) and Section 90SF(3) which are the list of the factors the Court must consider when determining whether an order for maintenance should be made.

However, what has changed is the definition of family violence in Section 4AB of the Family Law Act 1975.

The section now significantly expands upon the definition of economic or financial abuse of a family member and provides examples of such conduct, including:

• Unreasonably denying the family member the financial autonomy that the family member would otherwise have had such as by forcibly controlling the family member’s money or assets, including superannuation or sabotaging the family member’s employment or income or potential employment or income, or forcing the family member to take on a financial or legal liability or status or without the family member’s knowledge of the accumulation of debt in the family member’s name.
• Unreasonably withholding financial support needed to meet the reasonable living expenses, of the family member or the family member’s child, coercing of a family member to give or seek money, assets or other items as a dowry or to do or agree to do things in connection with the practice of dowry.
• Hiding or falsely denying things done or agreed to buy the family member, including hiding or falsely denying the receipt of monies, assets or otherwise in connection with the practice of dowry.

Section 79(5)(d) or Section 90SM(5)(d)- Wastage

This reads: “The effect of any material wastage, caused intentionally or rigorously by a party to the marriage, of property or financial resources of either of the parties to the marriage or both of them”.  

Again, this largely codifies the case law regarding wastage which in summary is that property wasted by virtue of one party acting recklessly, negligently or wantonly to the overall effect which has reduced or minimised the value of the property pool. This should be added back into the property pool as property already received by the offending party.

Section 79(5)(e) or Section 90SM(5)(e)- Liabilities

This reads: “Any liabilities incurred by either of the parties to the marriage or both of them, including nature of the liabilities and the circumstances relating to them.”

The aim of this factor is to permit the Court to consider the nature of liabilities incurred during the relationship or after the relationship and the impact those liabilities may have on the financial future of either party.

Section 79(5)(f) or Section 90SM(5)(f)- Housing needs

This reads: “The extent to which either party to the marriage has the care of a child of the marriage who has not yet attained the age of 18 years, including the need of either party to provide appropriate housing for such a child”.

This amendment potentially has some wide implications for arguments that sometimes result when both parties have the borrowing capacity to retain the home and pay out the other.

Companion Animals

An interesting addition to the provisions regarding property settlements is an exception that those provisions do not apply to any dispute regarding a companion animal.  

Currently, disputes regarding pets or companion animals are treated in exactly the same way as a dispute over an item of property/chattel, and you can read more about the current law regarding disputes regarding pets in my article entitled “Pets and Family Law Proceedings”

Now there is a separate framework for companion animals contained within the property settlement provisions.  In summary, a companion animal is defined as an animal kept by the parties to a marriage or a de facto relationship. Its primary purpose must be for companionship, and therefore does not include assistant animals, working dogs or an animal kept for agricultural or laboratory testing purposes.  The Court is empowered to make three types of orders in relation to such an animal:

1. that the parties to have ownership of that animal; or
2. that the companion animal be transferred to another person who has consented to the transfer; or
3. that the companion animal be sold.

In considering which of those orders to make, the Court is to take into account the following considerations:

1. The circumstances of which the companion animal was acquired.
2. Who has ownership of possession of the companion animal.
3. The extent to which each party cared for and paid for the maintenance of the companion animal.
4. Any family violence to which one party has subjected or exposed the other party.
5. Any history of actual threatened cruelty or abuse by a party towards a companion animal.
6. Any attachment by a party or a child of the de facto relationship/or marriage to the companion animal.
7. The demonstrated ability of each party to care for and maintain the companion animal in the future without support or involvement from the other party; and
8. Any other fact or circumstances which, in the opinion of the Court, the justice of the case requires to be taken into account.

There are further amendments that the Court has made, so please look out for the second part of our article relating to the other changes which include changes as to how evidence is received in property matters, changes to arbitration, changes to case management and procedure, changes made to the provision of subpoena information, and changes made to divorce hearings.

Significant changes are coming into force so it is crucial to obtain accurate, up-to-date advice when those amendments take place and also to obtain advice about how those amendments may affect any ongoing family law matter that will not be resolved by 11 June 2025.  

If any of that applies to you, please contact Baker Love Lawyers on (02) 4944 3322, to make an appointment with our Accredited Specialist and Family Law, Hayden Carr.