Family Law Property Division Update <br><span>After the 2024–2025 Reforms- Part 2</span>
What Has Changed in Family Law Financial Matters?
Over the last few years there have been major changes to the way Australian courts deal with financial separation after a relationship breaks down. These reforms affect how property is divided, how spousal maintenance is assessed, and how superannuation is valued and split.
The key changes include the Family Law Amendment Act 2024 (most financial changes commenced on 10 June 2025), new superannuation regulations in 2025, and earlier reforms that allow parties to obtain information about a former partner’s superannuation directly from the ATO via the family law courts.
How Property Settlements Are Now Decided
The traditional four‑step approach that family law practitioners have used for years has effectively been written into the Family Law Act. The court must now move through a clearer, codified framework and, at every stage, ask whether it is just and equitable to make any property orders at all.
Step 1 – Identify the property pool and contributions.
The court identifies each party’s legal and equitable interests in all assets and liabilities, and considers each party’s financial and non‑financial contributions, including contributions as homemaker and parent.
Step 2 – Assess contributions overall.
Based on those contributions, the court comes to an overall percentage division of the asset pool. This is not a mathematical exercise but a broad assessment of who has contributed what over the course of the relationship.
Step 3 – Consider current and future needs.
The court then considers the parties’ current and future circumstances, including their earning capacities, age, health, the care of children, and other factors that may justify adjusting the contribution‑based percentages to reach a fair outcome.
Step 4 – Make orders only if just and equitable.
Finally, the court decides what actual orders should be made (who gets which asset or liability) and only does so if it would be just and equitable to alter property interests at all. The court is not required to make an order simply because parties are before it.
Family Violence, Economic Abuse and Financial Outcomes
The reforms significantly strengthen how the law deals with family violence, including economic or financial abuse. The definition of family violence now expressly includes conduct such as restricting access to money, incurring debts in the other party’s name, or using dowry‑related abuse to control a spouse.
This has real financial consequences. When assessing contributions, the court can consider how family violence limited a person’s ability to work or contribute. When looking at current and future circumstances, the court can take into account the long‑term economic impact of the violence, including disrupted careers, poor health and reduced earning capacity. These factors can lead to the victim of family violence receiving a larger share of the existing asset pool or more generous maintenance.
Wastage, ‘Add‑Backs’ and Misused Assets
Historically, courts sometimes used “add‑backs” – treating money that had been wasted, spent or moved by one party as if it were still part of the asset pool. That notional amount was then added back to the balance sheet for division. Recent reforms and case law have moved away from treating this notional property as part of the pool.
Instead, the Act now includes an express focus on wastage. The court can consider whether one party has engaged in wasteful or reckless conduct (for example, gambling, extravagant spending, or deliberate dissipation of assets), and what impact that has on the parties’ financial circumstances at the time of trial.
Rather than “adding back” a dollar‑for‑dollar figure, wastage is dealt with holistically: it may affect the assessment of contributions, or be weighed in the “current and future needs” stage to arrive at a just and equitable overall result. The practical message for clients is that preventing wastage before and during separation is far safer than hoping the court will fix the problem later.
Pets, Less Adversarial Processes and Disclosure Duties
Companion animals.
Companion animals (family pets) are still technically treated as property, but courts now have specific guidance on how to deal with them. The court can consider any history of abuse or threatened abuse of the animal, the bond between the animal and either party or any children, and who is best placed to care for the animal. The court can order that a pet be transferred to one party, but it will not order shared “custody” of pets.
Less adversarial processes.
The “less adversarial” approach, which was previously used mainly in parenting cases, can now be applied more readily to financial matters. Judges have greater flexibility to manage evidence and procedure in a way that reduces conflict and cost, including encouraging settlement and focusing on the real issues in dispute.
Stronger and earlier disclosure duties.
The duty of full and frank financial disclosure is now written directly into the Family Law Act. It begins when a party is preparing to start property or maintenance proceedings and continues until the dispute is finally resolved. Parties must disclose all relevant financial information and documents, including bank statements, tax returns, payslips, business records and details of trusts and companies.
Non‑compliance can result in serious consequences: costs orders, the court adjusting the division of property against the non‑disclosing party, or even findings of contempt in extreme cases. Lawyers are specifically required to warn clients about these duties and the risks of non‑disclosure.
Superannuation: Information, Valuation and W.A.
Reforms from 2022 allow a party to apply to the family law courts to obtain superannuation information about their former partner directly from the ATO. This makes it much harder for a person to hide superannuation.
From 2025, new superannuation regulations modernise the way super interests are valued for family law purposes. Updated actuarial factors and valuation methods are designed to reflect current economic conditions and the wider range of retirement‑income products now available.
In Western Australia, de facto couples now have access to superannuation splitting under the Family Law Act, bringing them into line with married and de facto couples in the rest of Australia.
Your Next Step: Practical Planning Tips for Clients
The new legal landscape makes it more important than ever to plan ahead and protect your position, both before and after separation.
- Protect against wastage early.
Where safe to do so, consider how joint accounts are used, set reasonable limits on access to shared funds, and keep good records of significant expenditures. In high‑risk situations involving gambling or other reckless behaviour, you should seek legal advice about how best to safeguard key assets.
- Consider separate accounts and clear records.
Maintaining some separate savings, tracking any gifts or inheritances, and keeping copies of financial documents can make it easier to prove contributions and protect assets if the relationship ends.
- Take family violence and economic abuse seriously.
If you are experiencing controlling or abusive behaviour around money, seek advice early. The law now recognises economic abuse as a form of family violence and allows the court to respond to its financial impacts in property and maintenance outcomes.
- Think about asset protection and Binding Financial Agreements (BFAs).
Before marriage or entering a de facto relationship, or even during the relationship, you may wish to consider a Binding Financial Agreement to clarify how property will be divided if you separate. This can be part of a wider asset protection strategy that considers both creditors and risks posed by a spendthrift or wasteful partner.
- Get early legal advice.
Every situation is different. Early, tailored advice can help you understand your rights, gather the documents you will need, and make informed decisions about negotiation, mediation or court proceedings.
