From 10 June 2025, amendments will come into effect to the Family Law Act 1975 (the Act) which will change the way property settlements are determined between separating couples. The changes will place a greater focus on the impact of family violence on a party to the relationship, and provide some financial benefit to victims.
The current law as to property settlement
There is, broadly speaking, a four-step process required to determine how assets are to be divided between parties:
- Identify the property, liabilities and superannuation of the parties;
- An assessment of each party’s contributions to that property and to the family;
- Consider the current and future circumstances, such as age, health, earning capacity, care of children and various other matters;
- Assess whether the proposed property settlement is just and equitable in all the circumstances.
The family violence changes
This four-step process will remain, even after the amendments coming into effect on 10 June 2025. However, the second step of an assessment of each party’s contributions will also include consideration of the extent and degree of family violence, which may have made a victim’s contributions more difficult or burdensome.
While the impact of more difficult or burdensome contributions has been a relevant factor in many cases since around 1997, this was not reflected in the legislation and generally only featured in extreme cases.
Examples of the impacts of family violence which may be considered to have made a party’s contributions more burdensome or difficult include a victim incurring medical or counselling costs due to family violence, limited employment prospects, or ability to have financial freedom during a relationship due to the family violence.
The level of family violence and impact on the victim’s contributions which will be necessary to impact a property settlement is not defined by the legislation. This will become clearer once cases are decided after the legislation comes into effect.
The dynamics of each relationship are different, and it is therefore to get individual and specialised advice in relation to the proposed changes.
