The Federal Government has put forward proposed changes to parts of the Family Law Act 1975 (Cth) (the Act) that will influence how property settlements between separated couples are determined, introducing the Family Law Amendment Bill 2024 (the Bill) on 24 August 2024.

The Bill’s aim is to clarify the court’s process when defining the parties’ property entitlements and codifying principles decided in case law for family violence, debts and wastage. The ultimate goal is to create a simpler, safer and fairer family law system, especially where family violence is present.

What are the key family law areas the proposed changes apply to?

  • Decision-making framework:Aligning legislative principles with existing case law for better understanding and application.
  • Ensuring a fair and equitable distribution of property.
  • Codifying family violence as a factor in property settlement and spousal maintenance orders.
  • Recognition of pets as companion animals rather than mere property.
  • Promoting a more cooperative and streamlined approach rather than an adversarial trial process.
  • Ensuring that the care and housing needs of children are considered in financial and property decisions.
  • Emphasising the importance of transparent financial disclosure at the earliest opportunity.
  • Regulating Children’s Contact Services and ensuring the provision of safe and child focused services for children whose families are unable to safely manage contact arrangements on their own and providing a neutral location where children can be safely transferred between parents for scheduled unsupervised visits.

The Main Changes:

Family Violence

Currently, the Act does not set out how the financial impact of family violence can be considered in property settlements. This is left to case law, which has provided that it only be taken into account where there is evidence demonstrating that the violence has a substantial impact on their capacity to contribute to the relationship.

The Bill introduces new principles that would enable the court to consider the effect of:

  • family violence, economic or financial abuse on each party’s ability to contribute to the property pool, and
  • family violence on the current and future circumstances of a party (such as the need for a party to access ongoing medical care or therapy, or limited income earning capacity).

If these principles become law, it will mean that the financial impact of conduct involving family violence, economic abuse and financial abuse may more likely be considered in the process of determining how property should be divided between the parties. It does not mean that family law courts will punish the conduct, rather that they may account for the impact of the conduct in determining a just and equitable property split.

Collation of Property Principles

The current property decision-making principles are scattered across different sections in the Act and in case law. The Bill aims to makes sure all these principles are located together in the Act to make it easier for separated couples to read and understand the law. The proposed amendments also identify how debt is treated in a property settlement, consistent with existing case law.

Streamlined & Co-operative Process

The Act currently contains Less Adversarial Trial (LAT) principles to help the Courts manage children’s cases safely, fairly and with reduced delay and reduced legal formality.  However, currently there is no equivalent LAT principles for non-child related proceedings.  The Bill establishes new LAT principles in property and other non-child related proceedings.  It is up to the Court to decide which matters will benefit from the proposed LAT principles.  These principles require the Court to actively direct, control and manage proceedings in a way that supports parties to safely raise family violence risks and ensure the safe and efficient conduct of proceedings.

Full and Frank Disclosure

The current family law framework provides that parties need to make full and frank financial disclosure of their financial circumstances and of information relevant to the issues in dispute.  To ensure that parties know how important this is to the property settlement process, the Bill proposes to include in the Act an explanation of the duty of disclosure and the possible consequences that might apply if a party does not disclose their financial information or documents in a timely manner.

The amendments to the Act aim to ensure that separating couples can better understand the decision-making framework used in family law to resolve their property and financial matters confidently and safely.

The Bill passed through the House of Representatives in August 2024 and is now being considered by the Senate.  It is likely that the Bill will pass through Parliament in the near future and will become law in around 6 months thereafter.

If you have any questions, or if you would like to discuss your own family law property matter, you can contact our Family Law Team including Accredited Specialist Lisa O’Leary on (02) 9525 8688.