Many individuals may not recognize that they are in a de facto relationship, yet the implications of this status can be significant if the partnership ends. Kira Duggan, the research director of Systems and Services at the Australian Institute of Family Studies (AIFS) in Melbourne, emphasizes the importance of understanding the threshold where a relationship is classified as de facto. She notes, “Once it crosses that crucial threshold, it essentially equates to marriage.”
A recent publication from AIFS highlights a notable decrease in the national marriage rate alongside a rise in couples opting for de facto living arrangements. Duggan points out that the prevalence of de facto relationships has nearly tripled in recent years, expanding from six percent of all couples in 1986 to approximately 20 percent in the present day.
However, the AIFS report indicates that the common perception of de facto relationships may not align with their legal definition, which can lead to unexpected outcomes during a breakup.
So, what does ‘de facto’ actually signify? Under Australian law, a relationship is deemed de facto when both partners, who are not married or related, maintain a genuine domestic partnership as a couple living together. Ella Hickman, principal and director at Hickman Family Lawyers in Perth, observes that many individuals are unaware that their relationship qualifies as de facto. “Relationships often develop naturally over time,” she explains.
A de facto relationship typically includes elements akin to a marriage, such as shared finances, raising children, and division of domestic responsibilities. These factors contribute to the assessment of the relationship status. If recognized as de facto, couples gain legal rights similar to those of married individuals.
How does being classified as de facto alter the dynamics of a breakup? Legislative changes to the federal Family Law Act in 2009 aligned the legal treatment of de facto relationships with that of marriages. Nonetheless, unlike married couples, those in de facto relationships must provide evidence of their partnership’s existence. Married individuals need to be separated for at least 12 months to file for divorce and must initiate property or financial proceedings within 12 months following the issuance of the divorce order.
Hickman notes that de facto couples must also commence any proceedings within a two-year timeframe, although determining the date of separation can be more ambiguous. She recounts a case where partners who had been together for an extended period debated whether their de facto status applied to the entire duration of their relationship or only a portion of it. The perceived duration of the relationship can significantly influence how their shared assets, liabilities, and contributions are divided.
“For many, marriage is easier to conceptualize; there are clear start and end dates,” she states.
Can an ex-partner request asset division? Hickman observes an increasing number of individuals navigating the complexities of de facto relationship breakdowns. A former partner indeed has the right to request asset division. “Your asset pool includes everything owned individually, everything the partner owns, and jointly owned assets,” she clarifies.
Similar to married couples, de facto partners must engage in discussions or court proceedings regarding asset and liability division, which can often lead to disputes. The regulations governing de facto relationships are generally uniform across Australia, with the exception of Western Australia, where different state laws apply. Consequently, former de facto couples in WA only gained the ability to divide superannuation as part of property settlements starting in 2022.
What occurs when one partner owns a home? Even if a property was purchased prior to the commencement of a de facto relationship, it is likely to be included in the asset pool in the event of a breakup. “If a house is registered in one person’s name and they are in a de facto relationship, it becomes part of the asset pool,” Hickman explains. The key issue then revolves around each partner’s contributions and how the equity in the property should be handled.
It’s increasingly common for the owner of the home to argue that the other partner was merely paying “rent,” while the other may assert contributions such as maintenance or shared expenses for holidays. Beyond informal rental agreements, Duggan asserts that the only reliable method to safeguard assets during a separation in a de facto relationship is through binding financial agreements. Although this option may seem “unromantic,” it is not widely utilized.
Hickman advises that individuals need not incur significant costs to obtain guidance, suggesting resources such as community legal centers as valuable tools. “I always believe that being informed is empowering, so acquiring knowledge upfront can prove beneficial,” she concludes.
This article provides general information and is not a substitute for independent professional advice tailored to your specific situation.
