Is this the end of equal sharing?

Tuesday 30 July, 2019

The Law Commission Report on the Property (Relationships) Act 1976 was tabled in Parliament on 23 July 2019. The Report makes 140 recommendations on a wide range of topics, but the most significant one relates to the family home. At the moment, the family home is always treated as relationship property and the starting point is that it is divided equally. This means that currently if your partner moves into your home, after three years, then are entitled to half of it. The Law Commission considers this can lead to unfairness when the home was owned by one partner before the relationship or was received by one partner as a gift or inheritance during the relationship.

Family Home

The Law Commission has recommended that if the family home was owned by one partner before the relationship began, or was received by one partner as inheritance, the separating parties should only share the increase in the value of the home during the relationship. The Report also recommends giving courts more powers to divide trust property if the trust owns property that was produced, preserved or enhanced by the relationship.

Sharing of Family Income

To replace both economic disparity and maintenance, the Report recommends introducing Family Income Sharing Arrangements (FISAs) to recognise economic disadvantages suffered or economic advantages gained. A partner is eligible for a FIFA if the partners:

• Have a child together
• The relationship was longer than 10 years; or
• During the relationship:
  • That partner did not work or worked less in order to contribute to the relationship; or
  • The other partner was able to undertake training, education, or other career-enhancing opportunities due to their partner’s contribution to the relationship.

Under a FISA arrangement, the partners will continue to share their income for up to five years after they have separated (and up to ten years in certain circumstances). Partners can contract out of the FISA rules.

Child support will remain in place.

Other Recommendations

The Report also recommends giving children’s interests a higher priority in relationship property matters, including granting the partner who is the principal caregiver the temporary right to occupy the family home and requiring courts to postpone vesting if it would cause undue hardship to children of the relationship.

The Report recommends repealing the provisions providing a limited exception to equal sharing for short-term marriages and civil unions, so that the ordinary rules of division will apply to all marriages, civil unions and qualifying de facto relationships. A de facto relationship that is less than three years will be subject to the ordinary rules of sharing if there is a child of the relationship, or one party has made substantial contributions, and the court thinks it’s fair to make a division order.

If you have any questions about how you might be affected by these proposed changes, contact our Relationship Property team or complete your online Family Law Initial Assessment for some initial advice about your situation.