Family Law Property Settlements: June 2025 Reforms
From June 10, 2025, significant changes to Australia's family law system will come into effect that aim to enhance fairness, clarity, and responsiveness in the division of property and financial matters during relationship breakdowns.
Separating couples can make their own arrangements regarding what happens to their finances and property when a relationship ends. For those couples who are unable to reach an agreement themselves or through dispute resolution, they have an option to apply to the Federal Circuit and Family Court of Australia (FCFCOA) to determine a property settlement. The June 2025 reforms will apply to all separating couples, whether their property settlement is determined by the FCFCOA or they are negotiating outside of the court system.
What is the Process for Determining a Property Settlement?
The reforms introduce a more structured approach to property division.
Courts are required to:
- Identify all of the property and liabilities or debts of the parties involved;
- Assess each party’s contributions to the property pool (both financial and non-financial contributions) and to the welfare of the family;
- Assess each party’s current and future circumstances, taking into account factors such as age, health, income, and child care responsibilities; and
- Only make orders that are just and equitable in all circumstances.
This process aims to provide greater predictability and transparency in property settlements, assisting separating couples in understanding how decisions are made.
Clarifying the Impact of Family Violence
From 10 June 2025, the economic effect of family violence will be considered when making decisions about property and finances after separation. The Act broadens the definition of family violence to encompass behaviours that coerce, control, or cause fear, and specifically includes financial and economic abuse. These changes may be relevant in family situations where one party has controlled all of the household finances and spending, or someone has not been permitted to work. The amendment ensures that victims of family violence are not financially disadvantaged in the future as a result of their past experiences.
Importantly, the changes to the law only relate to the impact of family violence on property settlements, they do not permit the family law courts to:
- Sentence someone for engaging in family violence.
- Order compensation for harm caused by family violence.
- Make a family violence order to protect one of the parties from family violence
Family Pets and Companion Animals in Settlements
Recognising the emotional significance of pets, the changes to the family law act now establish a specific framework for determining the ownership of companion animals following a separation.
Courts must now consider factors such as:
- Any history of animal abuse or threats thereof.
- The attachment of each party, and any children, to the pet.
Notably, the courts are prevented from ordering joint ownership or shared possession of pets, which aims to minimise ongoing conflict between parties.
Duty of Financial Disclosure
When trying to determine a property settlement, separating couples have a duty to provide all relevant information and documents outlining their financial situation to each other, and to the Court when required. To promote transparency, the duty of financial disclosure has now been elevated from the family law rules into the Family Law Act itself.
This change underscores the importance of full and frank disclosure of financial information during property and financial dispute resolution process. Non-compliance can lead to serious consequences.
Existing Cases Before the Court
The changes will commence on June 10, 2025, and will apply to both new and existing proceedings, except where a final hearing has already commenced. Parties who are already in the Court system regarding a family law property settlement and do not have a lawyer are encouraged to seek legal advice regarding the changes and how they may impact their situation.
If you are currently negotiating a property settlement with a former spouse/partner, or would like further information on these changes to the family law act, contact the experienced family law team at CDQ Solicitors on ph: 02 8556 0130.
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