The Family Law Amendment (De Facto Financial Matters and other measures) Act received Royal Assent on 21 November 2008.

This much-awaited piece of legislation will see de facto financial matters dealt with by the Family Court and Federal Magistrates Court in the same way as those courts presently deal with financial matters involving married couples. Where agreements are reached, de facto parties will have the ability to negotiate and enter into financial agreements. For married and de facto couples alike, orders or agreements may be made in respect of property settlement, superannuation splitting or spousal maintenance. This represents a huge change in the benefits available to de facto parties, particularly with respect to spousal maintenance and superannuation splitting.

Over the past few years, various States and Territories have handed over jurisdiction to the Commonwealth with respect to de facto financial matters. The Act will apply to all people ordinarily resident in New South Wales, Victoria, Queensland, Tasmania, the Australian Capital Territory, Northern Territory or Norfolk Island. Western Australia, with its own Family Court, already had provisions within its Family Court Act 1997 for there to be financial agreements and proceedings between parties to de facto relationships. South Australia also is yet to relinquish its state-based jurisdiction in this area.

Some of the changes to the Family Law Act resulting from the amending Act commenced on 21 November 2008. However, these were not the major amendments which create new law for de facto financial matters and put in place some transitional provisions. Those major amendments are due to commence on a date to be claimed but no later than 22 May 2009. Government websites (such as the websites of the Commonwealth Attorney General and the Child Support Agency) advise that the new laws are expected to commence on 1 March 2009.

From the commencement date of the new legislation, parties to a de facto relationship will be able to enter into binding financial agreements and commence proceeding in financial matters under the Family Law Act just as the parties to a marriage have been able to do for many years. The Family Law Act will apply to all de facto parties who separate on or after the commencement date.

By agreement, de facto couples who separated prior the commencement date of the Act can elect to utilise the new provisions rather than the existing state-based legislation. Arguably, the Family Law Amendment (De Facto Financial Matters and other measures) Act marks the greatest change on the Australian Family Law landscape since the commencement of the Family Law Act itself in 1975.

Already in effect are a number of smaller changes which are important to note. With particular regard to Financial Agreements, some of the changes include:

• Third parties can now be party to a financial agreement between married parties. Section 4(1) of the Act (as amended) defines spouses as “spouse parties” and any other parties to a financial agreement as a “third party”.
• The definition of “a financial agreement” under section 90B, 90C and 90D of the Family Law Act now includes that spouse parties can make an agreement with one or more persons and that the agreement can be terminated only if all of the parties to it make a new agreement.
• Section 90K now provides an additional ground for setting aside a binding financial agreement, namely if the purpose of the third party entering into the agreement was to defeat a creditor.

If you have any queries regarding this issue or would like to discuss any other matters related to family law, please feel free to contact a member of our Family Law team on (07) 3231 2444.