Family Law (property) changes are coming – what you need to know
Published on May 29, 2025 by Paul Lewis
The biggest changes to property settlements in family law since the introduction of pre-nuptial and other financial agreements (2000) and the introduction of superannuation-splitting (2002), begin on 10 June 2025.
What is happening?
While the changes to Part VIII of the Family Law Act are not revolutionary, they are important. The most significant changes are:
- Family violence is now expressed as a factor, among many others, to consider when evaluating the contributions made by each spouse and their present and future needs. It is also an express factor in spouse maintenance cases. Importantly, the definition and examples of family violence under section 4AB are expanded to include coercive and controlling behaviour in relation to finances, including dowry abuse and other financial abuse-related conduct.
- Pets, or companion animals as pets are described in the amended Act, can be the subject of a property order. The media might describe these as pet custody orders. That description is ambiguous because an order cannot require a companion animal to be shared between households or parties. Family violence can be a relevant factor to the making of a pet ownership order.
- Courts are to consider the housing needs of children when deciding on a final property settlement order.
- The list of factors relevant to an assessment of the current and future circumstances of the parties (replacing the old list known as “the future needs factors”) is expanded to include evidence of waste by a party. Note that it is the effect of any material wastage, and not merely the waste itself, that matters.
Missed opportunities or gaps?
The government decided against introducing a statutory tort of family violence to allow the Court under the Family Law Act to award compensation for family violence. Some might view that as a missed opportunity. The Australian Law Reform Commission recommended the introduction of a new tort of family violence in its final report, which would have allowed a perpetrator of family violence to be liable to pay damages including general damages, special damages, aggravated damages and punitive damages. The ALRC recommended that any award of damages be omitted from the calculation of the parties’ net worth when making orders relating to the property settlement between the parties (married or de facto.)
Nevertheless, compensation claims in cases of family violence can still be pursued in State and Territory Courts. In an appropriate situation, a compensation claim might be considered a superior alternative to a victim of family violence as compared to how the impact of the violence may be evaluated in a property settlement.
Regrettably, the architecture of the new property settlement provisions suggests that credit for caring for stepchildren can no longer be given. This can only be an unintended consequence of the redesigned provisions and hopefully it may be remedied in the next round of amendments to the Act.
Business as usual?
There is usually a flurry of litigation after changes to the Family Law Act as lawyers try to obtain the best outcomes for their clients and when the meaning or application of new provisions is unclear. It is likely to take 12 to 18 months for primary judges and ultimately the Full Court of the Federal and Circuit Court of Australia to interpret and apply the changes, and for the redesigned law to become quite clear.
In terms of predicting whether the most significant of the changes will create less or more uncertainty for clients and their lawyers, the reference to considering the housing needs of children is the change most likely to be controversial. That controversy will run until appeal court judges provide guidance through appealed cases on the interpretation of that new factor in practice. Until then parties will have to rely on the common sense and wisdom of their lawyers to try and settle their cases.
Note that the changes from 10 June 2025 have a retrospective operation other than for cases where the final hearing started before that date.
Court is a last resort for most people going through separation or divorce. The rules of Court require parties to try and negotiate agreements away from the Courts, other than in cases of urgency, family violence or where there are other risk factors that excuse the operation of the pre-action and “genuine steps” requirements.
Mediation, family dispute resolution, conciliation, parenting coordination and other dispute resolution processes are available for clients wherever they may live. Most dispute resolution processes can be provided online for clients that live in regional or remote areas. Settlement, ideally early settlement, remains the goal.
Please note that this article does not constitute legal advice. If you are seeking professional advice on family law matters, you can contact Carroll & O’Dea Lawyers on 1800 059 278 or via our Contact Page and one of our lawyers will be able to assist you.
