De Facto Relationships De Facto Relationships

De Facto Relationships – The Basics

A de facto relationship exists where two people, who are neither married nor related to each other, live together on a genuine domestic basis and includes same-sex relationships.

In determining whether a de facto relationship truly exists, the court will consider several factors, including but not limited to: the duration of the relationship, whether a sexual relationship exists, the degree of financial support, and your reputation and public aspects of your relationship. If you have engaged in a de facto relationship for at least two years, you are entitled to similar relief upon separation that you would be entitled to if you had chosen to marry.

In 2008 major changes were made with regard to the way the law treats de facto couples that subsequently separate. Now, de facto relationships fall under the purview of the federal law and are discussed in The Family Law Act of 1975. The 2008 amendment basically allowed for de facto couples to be entitled to nearly identical relief as married couples in terms of property settlement, maintenance, and financial agreements.

The bottom line is that the law awards some protection for de facto couples even though you and your partner chose not to get married. If you were party to a de facto relationship and have since separated, be sure to contact your lawyer and learn about the types of relief that are available to you.

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De Facto Relationships – The Details

In Australia, the law affords some protection to couples that have chosen not to get married, yet lead the life of a married couple, including same-sex relationships. Whether you chose not go get married out of convenience, or for religious reasons, you can take comfort in knowing that should you separate, you are entitled to similar protection under the law as if you were married.

It is worth noting that the rules regarding de facto relationships may vary slightly depending on the state or territory, so this article will focus on the federal law laid out in the Family Law Act of 1975.

A de facto relationship exists when two people are not legally married to each other, not related by family, and regarding the circumstances of their relationship, they carry on as a couple living together on a genuine domestic basis. In determining whether a de facto relationship exists, the court will look at a myriad of factors laid out in the Family Law Act, including:

  • the duration of the relationship;
  • the nature and extent of their common residence;
  • whether a sexual relationship exists;
  • the degree of financial dependence or interdependence, and any arrangements for financial support;
  • the ownership, use and acquisition of their property;
  • the degree of mutual commitment to a shared life;
  • whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;
  • the care and support of children;
  • the reputation and public aspects of the relationship.

In order to receive the benefits awarded to de facto relationships under The Family Law Act, the parties must have engaged in a de facto relationship for at least two years (except if there is a child of the relationship or one party made substantial financial contributions).

Recent Changes – Family Law Amendment Act 2008

The Family Law Amendment Act was given Royal Assent in November of 2008 and greatly impacts de facto couples. The amendment brought these relationships under the purview of the federal law and allows them to be treated the same as married couples. The major change brought about by the amendment is that the financial settlement regime was extended to both same sex and heterosexual de facto relationships.

The amendment allows parties to a de facto relationship to seek declaratory relief in relation to their relationship and property, seek maintenance orders, seek property adjustment orders, and the amendment allows de facto couples to enjoy superannuation splitting and financial agreements.

The amendment does not affect de facto couples whose date of separation came prior to March 1, 2009; those relationships are not subject to the laws of the federal system, and are limited to relief awarded under state and territory laws. The date of separation is the sole determining factor as to whether a de facto relationship is governed by state or federal law. Should your de facto relationship have ended prior to this 2009 date, there is one way you may still have access to the federal law. If you and your partner make an unconditional choice to opt in to the federal legislation, and you satisfy the following elements, your separation can fall under the purview of the federal law.

  1. There must be no current order about property or maintenance.
  2. There must be no agreement between the parties enforceable under the state law in existence.
  3. The parties must consent in writing.
  4. The parties must have received independent legal advice as to the advantages and disadvantages of making the choice.
  5. The parties must have received a signed statement confirming the advice from their lawyer.

Generally, this exception is no longer applicable because The Family Law Act has placed a two-year limitation on the institution of matrimonial causes. So, had your de facto relationship ended before March 1, 2009, but no legal action was filed within two years then you would not be eligible for any relief.

Each of the following subsections highlights the relief available to de facto couples thanks to this 2008 amendment.

De Facto Relationships and Property Settlement

The Family Law Act makes little difference between property settlement amongst formerly married couples, and those who were in a de facto relationship. For all intents and purposes, the courts are to treat property settlement issues for married and de facto couples the same, and the language under the Family Law Act is nearly identical.

For an in depth analysis regarding property division, please see the articles in our property settlement centre. With regard to property settlement issues, just know that there is no real distinction between the way the law treats married couples and those who were in de facto relationships. The way that creditors, bankruptcy trustees, and property orders are treated is practically identical.

De Facto Relationships and Maintenance

Similar to property settlement issues, the way in which de facto relationships are treated with regard to maintenance is identical to the way in which married couples are treated. There are provisions in the Family Law Act that discuss the right to maintenance, power to order maintenance, factors to look at, urgent maintenance, and modification of orders that are almost verbatim for both married and de facto couples. You can find an analysis of all of the rules regarding maintenance in our maintenance center.

De Facto Relationships and Financial Agreements

As you may have guessed, the provisions of the Family Law Act that discuss financial arrangements for married couples is largely the same as the provisions that apply to de facto couples. Parties to a de facto relationship are permitted to enter into financial agreements; the only major distinction being that the agreement will be no longer be binding if a de facto couple later marries. Again, for a more detailed look at the law surrounding financial agreements, please see our property center.

De Facto Relationships and Superannuation

Superannuation splitting is available to de facto couples to the same extent that it is available to married couples. The only noteworthy distinction is that there are more complex provisions regarding the separation declaration for de facto couples than there are for married couples.

As you can see, thanks to the 2008 amendment, if you are involved in a legally recognised de facto relationship, and you subsequently separate, you are entitled to nearly the same relief you would be entitled to had you and your partner married.

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When Does a De Facto Relationship Begin and End?

The law in Australia clearly outlines the criteria of a de facto relationship.   Section 4AA(1) of the Family Law Act, 1975 says that two people are in a de facto relationship if they “have a relationship as a couple living together on a genuine domestic basis”. Section 4AA(2) helps the courts determine if indeed a de facto relationship exists by allowing the judge to consider a number of factors, including the duration of the relationship, whether a sexual relationship exists and the degree of mutual commitment to a shared life.

In a recent court case, Kale & Karmel, the Family court was asked to determine exactly when the relationship began and ended, in order to divide the joint property fairly.   In this case, the applicant, Kale, was a 58 year old man with two grown children from a previous marriage.   He received a PhD in 1997.  Until about 2005, he was also caring for his two children on a more less equal basis with his ex-wife.   The respondent, Karmel, completed a law degree in 2000, worked for several years in business and in law and in April 2005 opened her own law practice.   There were various questions of property – a shared home, superannuation, cars – but the larger disagreement centred around when the de facto relationship between the applicant and the respondent started and when it ended.

Kale argued that the relationship started in mid-2002 and ended in October 2009, after their physical separation.  Karmel, on the other hand, argued that the relationship commenced four years earlier in 1998 and ended only in January 2010.  The court was forced to look at a number of criteria in order to determine just how long the relationship actually did last.

The court reference earlier cases, concluding that for the purposes of property issues, it must be shown that the parties lives have merged to the point that for all intents and purposes, they are living together as a married couple.   Based on this understanding, the magistrate in Kale & Karmel found that the de facto relationship commenced in late 2001.

The magistrate considered a number of factors which indicate that the de facto relationship did not begin until late 2001.  First, although the relationship started in 1998, the parties maintained separate homes until March 2002.  Kale lived in a home he had purchased some years earlier and Karmel continued to rent elsewhere.

Second, while Kale resided in this original home, he maintained equal care of his children.  The magistrate accepted that this meant that a central part of Kale’s life, mainly his children, did not yet become a part of his relationship with Karmel.

Third, the couple kept separate finances until March 2002, maintaining financial independence.   Proof of this independence was a loan which Kale gave to Karmel and which was paid back shortly after it was given.   The magistrate found this act “contrary to the notion of financial interdependence”.

Fourth, throughout 2000, Karmel pursued a job opportunity which would have required a move to Canberra.  Since Kale’s children remained in Brisbane, there was no question of his relocating.  The respondent also told the applicant that she hoped to find an overseas posting.  The magistrate held that Karmel’s decision to consider and pursue such a professional move ran “contrary to the existence of a de facto relationship”.

Taken together, these factors indicate that the parties were indeed in a relationship, but not a de facto one, since their finances remained separate, they each lived in a different home and they had no other mutual assets.

The court held that the de facto relationship actually did begin in late 2001 because at that time the couple decided that Kale would help Karmel financially so she could acquire a home large enough to accommodate him and his children.  For the magistrate, this was a mutual decision to jointly acquire property, indicating a real merger of their lives.  Significantly, the magistrate did not consider when the property was actually acquired – early 2002 – but when the parties made the decision to buy the property, late 2001.

The termination of the relationship was simpler for the magistrate – it took place when the respondent left the joint home in October 2009.  In total, the magistrate found that Kale and Karmel had maintained a de facto relationship for a period of some eight years, from late 2001 through late 2009.

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Binding Financial Agreements between de facto partners

Parties to a de facto relationship can make binding financial agreements. A financial agreement can be made either before the relationship begins at any time during the relationship or on separation. The agreement can cover matters such as:

  • responsibility for expenses,
  • classification of property owned by the parties as either joint or individual property,
  • the categorization of property acquired during the relationship as either joint or individual,
  • responsibility for debts and
  • the division of property and maintenance if the couple  separates.

If you have come to an agreement without legal advice, you should obtain advice before you sign anything. Mathews Family Law & Mediation Specialists can provide you with the advice needed to make an informed decision before you enter into a binding financial agreement. We can also assist by drafting the agreement for you to ensure that it covers all the legal requirements that you may not have thought of.

Mathews Family Law is a leading family law firm in Australia. Please contact us on 1300 635 529 to speak with our family and divorce lawyers today. You can also send through your enquiry online now and we will contact you shortly.