Since 1 December 2002 Part 5A of The Family Court Act covers the financial rights and obligations of defacto couples in Western Australia. These financial rights and obligations are now substantially the same as married couples. The law applies equally to same sex and heterosexual relationships. Unlike married couples however, the superannuation interests of defacto couples cannot be split but this will change.
In a case concerning a de facto relationship an application to the Family Court of Western Australia for a property settlement or for maintenance must be made within 12 months of the end of the relationship. In some cases this time limit may be extended by special leave of the Court if you are able to show exceptional circumstances.
It is simple to determine if a couple are married – they have a wedding ceremony, their marriage is registered and they receive a marriage certificate. However, sometimes it can be difficult to determine if the relationship between an unmarried couple is a de facto relationship.
For an outline of the criteria which determine if a relationship is a de facto relationship see the Information Sheet – What is a defacto relationship?
When a defacto relationship breaks down either party can apply to the Family Court of Western Australia for maintenance for themselves or for a share of the other party’s property or both. There is no formula which applies to a division of property and a party may or may not be entitled to maintenance. Each case is decided on its own facts, having regard to specified criteria set out in Part 5A of the Family Court Act.
For an outline of the criteria which the Family Court of Western Australia applies to determine how to divide assets see the Information Sheet – How is property divided upon the breakdown of a relationship?
For an outline of the criteria the Family Court of Western Australia applies to determine whether or not to order a payment of maintenance see the Information Sheet Will I have to pay to/can I get maintenance from my ex-partner?
It is possible to avoid the Family Court of Western Australia imposing on you its decisions about how your property is to be divided, or whether or not maintenance should be payable, after your de facto relationship ends.
For an outline of how you can avoid the Family Court of Western Australia see the Information Sheet – Financial Agreements for Defacto Couples
1. It is generally understood that your relationship becomes a defacto relationship when you have cohabited together in the same residence for more than 2 years.
2. It is possible however that you may be deemed to be in a defacto relationship even though you have not lived with your partner in the same residence for 2 years. The sorts of factors which might cause your relationship to be regarded as a defacto relationship before you have cohabited for 2 years are:
(a) the length of time you have been together in a relationship;
(b) the degree of financial dependence, or the financial arrangements, in place between you and your partner during your relationship;
(c) the extent to which your relationship with each other has demonstrated that you are committed to sharing your life with the other person;
(d) whether your friends and others regarded you and your partner like a “married couple”;
(e) how you describe each other in official documents such as tax returns and social security forms concerning Centrelink benefits;
(f) whether there is a child of your relationship, and, even if your relationship is less than 2 years, a serious injustice would be caused to the parent having the responsibility to care for and support the child if the Court did not make orders for maintenance and property division;
(g) whether you or the other party has made a significant contribution to property in the other’s name and a failure to make orders dividing property would cause serious injustice. For example, it may be that you or your partner have expended a lot of time, energy or money investing in the other’s assets and it would be unjust for that contributionnot to be recognised.
3. Defacto relationships need not be monogamous. It is possible for a person to be married, in a heterosexual defacto relationship and a same sex defacto relationship all at the same time. A potentially very expensive arrangement.
Before, during or after your relationship
1. You and your partner are able to enter into a written agreement called a financial agreement which determines the way your assets will be divided and what maintenance, if any, would be payable if there is a separation.
2. Such a financial agreement entered into before or during your relationship with your partner will avoid a potentially costly dispute about your property and maintenance issues if the relationship ends.
3. It is generally easier to reach an agreement with your partner before or during your relationship, when you are on good terms, than after the end of your relationship, when you are less likely to be on good terms with your former partner.
4. At O’Sullivan Davies we recommend that couples who are in or contemplating entering into a marriage or a relationship which they believe may be a defacto relationship seek legal advice about the preparation of a financial agreement. If you do not have a financial agreement and your relationship has ended we recommend that you seek legal advice to determine the extent of your rights and obligations concerning division of property and maintenance.
There is no formula by which the division of property is calculated.
The division of property between separated, married or defacto spouses is decided by a 4 stage process.
1. All of the assets and financial resources of you and your partner, from whatever source and whether or not that property was owned by you before your relationship, are available to be divided by an order of the Family Court of Western Australia. The first stage therefore is the determination of the net value of all of the assets and financial resources of you and your partner. If you are married, superannuation is treated as an asset.
2. The second stage is to assess the contributions you and your partner have made to the assets identified in stage one. Contributions are generally assessed in percentage terms. You and your partner will each receive “credit” for the financial and non-financial contributions made to the acquisition, conservation and improvement of assets by each of you or on your behalf. You will also receive “credit” for your financial or non-financial contributions to the welfare of the family comprised of you both and your children (if any).
3. The third stage is to give consideration to the current and likely future incomes, earning capacities and future needs of you and your partner.
It may be that even though one party made a greater financial contribution to the assets, the other party is going to be disadvantaged in the future because of a lower income and earning capacity and/or the responsibility for the care and support of children of the relationship.
4. The fourth stage is to ensure that any property division is just and equitable overall.
1. Not only does the Family Court have the power to order division of property, it also has the power to order that one person in a defacto relationship or marriage that has ended pay maintenance for the other person. The payment of any maintenance is in addition to any payment of Child Support.
2. Generally, a party will be entitled to receive maintenance if:
(a) He or she is unable to support himself or herself from their own income or financial resources for good reason such as genuine incapacity for employment because of the care of a young child, a child with special needs or lack of employment opportunities; and
(b) the other party can afford to pay maintenance;
3. Consideration of whether or not maintenance is payable by one party to the other requires an assessment of the income, property and resources of both parties together with a review of their reasonable needs. If the party seeking maintenance establishes a need then the other party’s excess of income over reasonable needs is then available for payment to the other partner as maintenance.