Family Law
Need help negotiating or formalising a Family Law agreement or resolving a dispute?
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Nothing is more important than family and nothing is more devastating than a family breakdown. It can have a lasting effect on your life.
The Family Law system may be your first contact with the legal system. It doesn’t have to be daunting and confusing. We will support and assist you through this difficult and emotional period, working with you to achieve your best possible result in the shortest possible time.
We explain in plain English the legal process and your options to help inform your decisions. Our empathetic, caring approach combined with a client-centric ethos and unshakeable determination serves to protect your interests.
Divorce
Living separately and apart under one roof
A spouse who wishes to divorce can only file after 12 months’ separation.
A couple may be deemed to have separated when they cease living together as a couple. They are not required to live apart after separating and can continue to live separately under one roof.
In those circumstances, you may need to support your divorce application by filing an affidavit:
- setting out changes in the marriage showing that you and your spouse have separated; and
- explaining why you and your spouse nonetheless continued living together.
A separated couple living under one roof must convince the court that, although they live under the same roof, they live and act independently and no longer like a married couple.
The court considers all relevant information regarding a spouse’s separation and circumstances.
If the court considers that the parties stopped acting like a husband and wife, separation will have taken place.
Resolving a dispute - what are my options?
An amicable agreement involves ex-partners formalising an agreement about division of property or parenting arrangements.
Agreement may be reached by a combination of Family Dispute Resolution (FDR – a form of mediation), negotiation, and collaborative law.
Agreement can be formalised by preparing:-
- for property:
- an application for proposed consent orders and the proposed orders filed in the Federal Circuit and Family Court of Australia or (provided both parties are legally represented) a local court exercising Family Law jurisdiction; or
- a financial agreement or a superannuation agreement drafted in accordance with the Family Law Act 1975 (Cth);
- for parenting arrangements – either:-
- filing proposed consent orders in the Federal Circuit and Family Court of Australia or (if both parties are legally represented) in a local court exercising Family Law jurisdiction; or
- signing a parenting plan;
- for child support – signing a binding child support agreement then liaising with Child Support before registering it with Child Support.
An amicable settlement is faster, less costly, and less stressful than litigation. However, if despite your best efforts, negotiation reaches a stalemate or the other party commences litigation, your only options may be:-
- re-negotiating; or
- agreeing to the orders the other party seeks; or
- filing court documents and entering into litigation in the Federal Circuit and Family Court of Australia.
What is Family Dispute Resolution?
In mediation, a mediator assists parties to negotiate a mutually satisfactory resolution and avoid court proceedings. In Family Law, mediation is called Family Dispute Resolution (FDR) and mediators are called Family Dispute Resolution Practitioners (FDRP). We will use the more familiar terms ‘mediation’ and ‘mediator’.
The mediator works with you and your ex-partner (and possibly your lawyers) to reach agreement.
What to expect
There is no fixed process although the mediator may initially meet with each party separately for an intake session.
If the parties’ lawyers are present, the mediator may invite them to summarise the background, their client’s concerns and desired outcomes. The mediator may then invite a party to make an offer. Offers are exchanged until agreement is reached about the issues in dispute.
The goal is to identify the issues about which the parties disagree.
Negotiations can be in a joint session or separately, in person or by video or telephone conferencing. If the mediation is ‘by shuttle’, each party is in a room or in a phone or video call (possibly with their lawyer). The mediator conveys offers between the parties.
Can I bring a support person?
If you want to bring a support person, to the mediation, the mediator is likely to need to obtain the other party’s agreement to their inclusion in advance.
Your support person must not obstruct the prospects of a settlement or inflame the dispute.
What is my lawyer’s role?
Your lawyer’s role is to work with the other lawyer and the mediator to problem solve.
What is my role?
You decide whether to accept or reject an offer and whether to make a counter-offer. Reaching agreement generally requires both parties to compromise.
What if we reach agreement?
If you reach agreement, the lawyers set out the terms of the agreement in writing and the parties and their lawyers sign the documents. If the matter is in court and the next hearing is imminent, proposed consent orders may be emailed to the court to be considered at the hearing. Otherwise, the documents are filed electronically through the Commonwealth Courts Portal. The agreement is final only after a final Order is made.
What is an Offer to Settle?
An offer to settle is a way to end a case without going to trial where the parties agree to settle the case with less or no court involvement.
An offer to settle must be in writing, is not filed in court, and may be made at any time before the court makes final orders.
An offer to settle may be accepted at any time before:
- the other party withdraws it; or
- the court makes final orders.
An offer may be withdrawn:
- if it is not compulsory, by giving the other party written notice; or
- if it is compulsory, making another offer.
Making a counter-offer does not prevent the maker from accepting the original offer.
What are pre-action procedures?
To comply with the court’s pre-action procedures, a prospective party must make an offer to settle before going to court .
What does “Without Prejudice” mean?
An offer to settle is not acceptable as evidence in the family court if it is related to the case and is a genuine offer. The header “without prejudice” in an offer indicates that the offeror need not fear that the offer will later be used in court as evidence against them.
What is a Calderbank Offer?
A party can make an offer to settle a dispute through a Calderbank offer, which can help resolve a dispute early and potentially reduce costs.
A Calderbank offer is a formal offer to settle a dispute made by one party to the other which states that the offer will be disclosed to the court for the issue of costs. The name and idea of Calderbank offer was taken from the English case Calderbank v Calderbank [1975] 3 All ER 333.
The Calderbank offer must be ’genuine’ and be open for a reasonable time period. It is made ‘without prejudice save as to costs’ meaning that it cannot be used as evidence in court against the other party. However, if it is unreasonably rejected it can be used by the court when assessing the question of indemnity costs.
How does a Calderbank Offer Work?
Either side of a dispute can make a Calderbank offer before the dispute goes to trial through a Calderbank letter. If the offer is rejected and the dispute goes to court, when the issue of costs arises the court may take into account the Calderbank offer.
The usual rule is that costs are paid by the unsuccessful party. However, if the Calderbank offer was unreasonably rejected, the court may make an indemnity cost order instead: the party that made the offer may be able to recover a portion of the costs. The court issues indemnity cost orders because the rejecting party had the option to settle the matter for a reasonable sum of money but instead took the matter to trial incurring further legal costs. When assessing the costs the court will consider whether the offer offer was genuine and whether rejecting the offer was unreasonable.
Benefits of a Calderbank offer
A Calderbank offer can potentially help to reduce the costs of litigation by creating an incentive to settle. It also, if rejected, can allow the party that made the offer to recover part of the costs. However, although a Calderbank offer permits you to present the offer to the Court, it does not guarantee that an indemnity cost order will be made.
What are Consent Orders?
Agreement about parenting arrangements and/or property settlement can be formalised by consent orders. Proposed consent orders setting out the agreement reached are electronically filed in the Federal Circuit and Family Court of Australia. No court hearing is required. Once approved by the court, they become legally binding Court Orders.
Consent orders are a fast and inexpensive method of resolving family law disputes.
Steps:
Negotiation
Discussions, either directly between the parties or through their lawyers, aimed at reaching agreement.
Drafting
Preparing documents to be filed with the Federal Circuit and Family Court. After giving third parties written notice, file electronically filed via the Commonwealth Courts Portal:
- an Application for Consent Orders;
- proposed consent orders;
- (for parenting matters) Annexure to proposed consent parenting orders (current case).
Why consent orders?
Benefits of consent orders include:
- It is extremely difficult for one party to vary a Court Order;
- The court can enforce Orders;
- obtaining a stamp duty exemption on a transfer of real property to a party or their child.
Time limit to file?
Application for parenting orders: none.
Application for property orders: within 1 year after divorce if married, within 2 years after separation if de-facto. An application can only be made after the time limit in exceptional circumstances.
If you want to file an application after the time limit, you must seek the court’s leave (i.e. permission) to do so.
What if I don't comply with Orders?
A Federal Circuit and Family Court of Australia Order is legally binding. Non compliance (also known as a contravention or a breach of Orders) is a serious offence.
Orders may be parenting or financial (also known as property) orders. Both types of Orders are legally binding on all parties to the Orders.
What are the consequences of non compliance with Orders?
Non compliance with Orders can lead to severe penalties if the court finds that the breach occurred without a reasonable excuse.
If a party has a reasonable excuse to not comply with the Order, there will be no legal consequences.
“Reasonable excuses” are set out in section 70NAE of the Family Law Act 1975.
If the court finds that an order was contravened without a reasonable excuse, it will impose penalties.
The Family Law Act (1975) (sec 70NFB) sets out the consequences of breaching a court order.
What if my ex has breached a Court Order?
If a party has breached a court order, an aggrieved party must file a contravention application and an affidavit.
If the aggrieved party does not want the other party to be punished or penalised, but wants only the resumption of arrangements of the earlier Order, they must also file an Application – Enforcement.
What are pre-action procedures?
Before taking your property or parenting issue to court, you must fulfil the “pre-action procedures”. The court requires parties to make a “genuine effort” to resolve a dispute before going to court, including:
- participation in FDR;
- meeting disclosure obligations; and
- giving the other party a written Notice of Intention that you intend to take the matter to court.
Family Dispute Resolution
For parenting matters, parties are required to attend Family Dispute Resolution (FDR) and obtain a “section 60I Certificate” from an accredited FDR practitioner.
Exemptions to participating in dispute resolution
If an exemption applies, you are not required to participate in FDR or to obtain a section 60I Certificate.
Exemptions include:
- If your matter is urgent;
- If the court is satisfied that the other party has perpetrated child abuse or family violence.
- If a delay in having the matter heard by a court risks family violence;
- If a party cannot participate in dispute resolution due to physical remoteness or incapacity;
- If your application relates to a contravention of a court order made within the last 12 months, and party who has allegedly contravened the order is behaving in a way that shows serious disregard for their obligations under the order.
To apply for an exemption from participating in FDR, you must file an affidavit with the court.
Disclosure in family law matters
Parties have a duty of disclosure requiring them to exchange all relevant information and documents.
For financial matters (related to property), parties must disclose the following:
- A schedule of assets, income and liabilities;
- Documents in your possession relevant to the dispute; and
- A copy of a document required by the other party that would be considered relevant to disclosure.
For parenting matters, parties should determine whether they have any relevant information to the issue in dispute.
Written notice of an intention to start proceedings
If dispute resolution is unsuccessful or unavailable, you must notify the other party that you are considering applying to the court to resolve your dispute. This letter must include:
- issues in dispute;
- the orders you seek from the court;
- a genuine offer to resolve the issues; and
- a period (normally 14 days) within which the other person must reply.
Family violence and child abuse
If you are experiencing family violence from the other party or there is a risk of child abuse, you may be exempt from the pre-action procedures. If you are seeking an exemption on one of these grounds, the Family Relationship Advice Line on 1800 050 321 may be able to assist.
If you have ongoing concerns about accessing legal services, contact the Family Violence Law Help crisis line on 1800 737 732.
If you are concerned about your immediate safety, call the police.
Property Distribution
How does the Court distribute assets?
Separated parties can apply to the Federal Circuit and Family Court of Australia for Court Orders about the division of their assets. A Judicial Officer assesses the couple’s financial circumstances, including the asset pool and each party’s contributions.
There is no set formula to calculate how much each party should receive. The court decides what is ‘just and equitable’ for both parties.
Filing an application with the Court
The terms of agreement reached can be outlined in proposed consent orders, which are filed with the court. If the Judicial Officer determines that the agreement is fair, it will be approved and the proposed orders will become binding and enforceable.
Both parties must to provide full and frank disclosure of all their assets and liabilities. The duty to disclose endures until the case is finalised, and failure to disclose can result in an order being set aside.
How does the Court divide assets?
Once all the marital assets have been identified, the court considers the financial and non-financial contributions made by each party in the acquisition, maintenance and conservation of the marital assets. It also considers the future needs of both the parties. The court determines how much weight to attribute to each of these factors.
What is the asset pool?
The asset pool incorporates all earnings received during the relationship, everything purchased with those earnings and any debts acquired during the relationship. It includes assets in the name or control of one party, jointly owned assets, and assets held at separation, except where such asset was used to purchase a new asset.
Is superannuation a marriage asset?
Superannuation is part of the asset pool. The contributing member can retain the whole benefit, but receive a lesser share of other assets. Or the court can make a “splitting order”, where a fund is divided between the parties in a specified amount or percentage. Or the court can make a “flagging order”, so that when the superannuation fund matures, an agreed amount will be distributed to the other partner.
Is a trust a marriage asset?
The court views assets held in a trust much like any other marriage asset, in that they will be considered shared assets unless one spouse has maintained total control over the trust.
Are inheritances marriage assets?
The timing of the bequest is the most important factor in deciding whether an inheritance is a marriage asset.
An inheritance received by one party before separation may be seen as their financial contribution. An inheritance received early in a relationship may be irrelevant in light of other contributions made over the life of the relationship. An inheritance received later in a relationship may be treated as a contribution made by the party who received it. An inheritance received after separation is seldom included in the asset pool, unless the pool is too small to assure a fair settlement for both parties.
How are windfalls treated?
If either spouse receives money through a windfall, such as a gambling win, it is usually considered joint income and part of the marriage asset pool.
What is full and frank disclosure?
“Full and frank disclosure,” means the obligation (in both financial and parenting matters) that parties to a Family Law matter disclose to each other anything relevant to their position that the court needs to consider .
Disclosure is an ongoing obligation commencing when parties start negotiating before the start of court proceedings and continuing until proceedings have ended.
You should disclose any major change to your assets or parenting arrangements as soon as possible.
If your matter is in court, you will have to file an undertaking confirming that you are aware that you owe the court a duty of disclosure and have, to the best of your knowledge and ability, complied with that duty.
At any time during your matter, you can ask another party:
- to update figures already disclosed but which have changed;
- for disclosure of information or documents of which you are aware relating to proceedings; or
- to disclose information about an asset.
If they do not provide the necessary disclosure, you may be entitled to ask the court to issue a subpoena compelling a person or organisation to produce documents or give evidence at a hearing.
Failure to disclose financial information can result in the court setting aside an application or Court Order.
Lawyers have an obligation to the court to ensure that their client complies with their duty to disclose. If you do not provide full and frank disclosure, your lawyer may have to cease acting for you.
If you think a request is irrelevant and made to create delays or stress or to pressure you, you can request further information as to it’s relevance and possibly object to it.
If the court finds that you have not provided full and frank disclosure, it can make cost orders against you, impose fines, and even order imprisonment.
How are assets valued?
The court’s usual approach is to value the assets as at the date of trial (not at separation). That date may be long after separation and the value of assets may have significantly changed. If the court considers a change in value as a party’s contribution, that would change their entitlement.
If a party attempts to remove an asset from the pool by disposing of it after separation, the court may notionally “add back” the asset’s value to that party’s share.
Some examples of how different types of matrimonial assets are valued:
Real estate
Land and homes are usually the largest value shared assets. Parties may use real estate agents market appraisals to agree on a property’s market value. If that doesn’t result in agreement, they may have to jointly engage an independent expert valuer.
Business Interests
Parties should jointly instruct an independent expert such as a forensic accountant to value a business.
Motor vehicles
Websites such as Carsales or Redbook can be used to reach agreement on a market value of a vehicle. If that doesn’t result in agreement, they may have to jointly instruct an expert valuer.
Furniture and Jewellery
The second-hand value of furniture and jewellery is generally preferred to insured or replacement value. Joint expert valuers can be used for high value items.
What are Financial Resources?
The way in which the Federal Circuit and Family Court of Australia categorises assets in a separated couple’s asset pool can significantly impact the way in which they are split.
If the court categorises something as property, it is included in the asset pool for division between the parties.
Unlike property, what constitutes a financial resource is not defined in the Family Law Act 1975 and is a fairly broad concept.
Typically, a financial resource is something which is not considered to be property. Although it is not included in the asset pool, the court takes it into consideration if it offers one party future financial benefit.
A financial resource has the potential to generate future income or assets, while property does not.
A financial resource is an asset that can be used for the purpose of generating income .
An item classified as property can be divided between the parties, but an item classified as a financial resource cannot.
What are contributions?
The family courts evaluate different types of contributions each party made to the asset pool. The percentage split of the property pool is affected by parties’ contributions.
Contributions made by or on behalf of a party to (or a child of) the relationship, to the acquisition, conservation or improvement of the parties’ property may be financial or non-financial.
Contributions may also be made to the welfare of the parties (including children) as a homemaker or parent.
The weight attaching to initial financial contributions can reduce over time.
If one party substantially adds to their assets between separation and the trial or settlement date, they may have to share their increase in wealth with their ex-partner.
Post-separation contributions may be financial or non-financial or parenting and homemaker contributions.
Gifts or contributions by third parties
Contributions may be made:-
- directly or indirectly by or on behalf of a party to or a child of the relationship to the acquisition, conservation or improvement of their property; or
- by a party to the relationship for the welfare of the family.
Contributions made by someone who is not a party to the relationship must be attributed to one or both of the parties to the relationship.
The issue is often whether the contribution was intended to be a gift or a loan to be repaid.
In determining the weight given to a gift to one party the court may choose to:
- credit the recipient with the value of the gift at the trial date; or
- credit the recipient with the gift’s initial value; or
- If it has been mixed with other contributions over a long period, take it into account but not give it a particular value.
If the gift by one party’s relative is made to both parties, the court may treat it as:
- a contribution by the party related to the donor; or
- an equal contribution if it was clearly intended for both parties.
A third party can make a non-financial contribution.
Gift or Loan?
Parents who give de facto or married partners financial support during the relationship or marriage can find themselves enmeshed in family law proceedings when, after the breakdown of the relationship or marriage, there is a dispute as to whether monies received by one or both parties was a repayable loan or a gift.
The dispute often arises because there was an informal agreement between one party and their parents regarding the advancement of monies. Parents and their children may not consider it necessary to document or formalise the terms of the loan as there is an ‘understanding’ that the money will be repaid and a breakdown of the relationship or marriage is not considered.
Even if the ‘loan’ is documented and secured by a mortgage, it can still be challenged in the Supreme Court of NSW or the Federal Circuit and Family Court of Australia.
If the court considers the money to be a loan, it considers whether the loan is repayable and, if it is, the likelihood of it being repaid. If the loan is repayable and is likely to be repaid, the court may order the parties to repay the loan from the asset pool. Such an order is unlikely to be made if the loan is uncertain and unlikely to be enforced.
If the court is not satisfied that the monies constituted a repayable loan, it may determine the monies were a gift to the parties. In that event, the money is is likely to be treated as a contribution made on behalf of the party whose parents gifted the money, which may increase that party’s property settlement entitlements.
Special skills vs non-financial contributions
Partners to a relationship often adopt “traditional” roles: one party works and brings in income and one party stays at home to raise and care for children and to manage the household.
If the spouse working outside of the home earns more income or accumulates more assets than “average”, how does the court weigh and consider these different types of contributions?
Before 2015, in high wealth cases it could be argued that, as the entrepreneurial ability and “special skills” of one spouse were largely responsible for the accumulation of assets, they should receive a higher percentage of the asset pool.
However, this line of reasoning undervalued the contributions made by the other spouse with respect to homemaking and parenting and the court has now rejected the doctrine of “special skills” or “special contributions”.
In the 2015 case of Fields & Smith, the Full Court of the Family Court determined that the Family Law Act 1975 (the Act) does not impose any principle making direct financial contributions any more special or important than other contributions.
What does this mean for me?
when making orders to alter property interests:
- the court has a wide discretion to weigh up the parties’ contributions.
- Section 79(4) of the Act empowers the court to have regard to various categories of contribution including:
- Direct financial contributions to the acquisition of property;
- Indirect financial contributions to the conservation or improvement of property;
- Non-financial contributions; and
- Contributions to the welfare of the family.
When making a property settlement order, the court has discretion to assess each of the above categories of contribution.
What is Severing a Joint Tenancy?
How your property is owned can impact property settlement negotiations. If you and your ex-partner own property together, your solicitor will order a title search to ascertain if the property is held as joint tenants or tenants in common.
Joint tenants vs tenants in common – what’s the difference?
If you and your ex-partner hold your property as:
- joint tenants, there is a right of survivorship. On the death of a joint tenant, their interest in the property automatically transfers to the remaining joint tenant;
- tenants in common, ownership of the deceased’s share of the property passes as per their Will or, if there is no Will, per the intestacy rules in the Succession Act 2006 (NSW).
Should I sever a joint tenancy during family law proceedings?
The main reason for severing a joint tenancy after separation is to protect your interest in the property if you pass away before your property settlement is finalised, as you can include your interest in your Will.
To sever a joint tenancy, your solicitor completes and electronically lodges a Transfer Severing Joint Tenancy with NSW Land Registry Services, which advises the other party that you have done this. They have 30 days to object.
What is a Transfer Severing Joint Tenancy?
If you own property with your ex-partner as a joint tenant, you should consider lodging a Transfer Severing Joint Tenancy as a precaution in the event of your death before your family law property settlement is finalised.
Each party will then hold a 50% share in the property as a tenant in common. You can then direct in your Will who receives your share of the property.
Whether you and your ex-partner each hold 50% of the property as tenants in common or as joint tenants does not represent your entitlement under the Family Law Act 1975.
Superannuation Splitting
Property settlements under the Family Law Act 1975 can divide superannuation along with other assets.
One partner of a de facto relationship or marriage can split an amount from their superannuation fund into their ex-partner’s superannuation fund.
The Family Law Act 1975 treats superannuation as if it were property, although it differs from other types of property as it is held in trust.
Splitting superannuation does not convert it into a cash asset. The non-member spouse can not access the superannuation they receive until retirement or on hardship grounds.
In a long relationship, where neither party had much superannuation at the start of the relationship, a superannuation split will often equalise their superannuation interests.
The court applies the four step process to superannuation splits.
The value of an accumulation fund is usually determined by a recent member statement or by sending the fund a completed Superannuation Information Request form (and the fund’s application fee).
How can I get information about my or my ex’s superannuation?
You can apply to the trustee of the superannuation fund for information about a member ‘s superannuation interest if you:
- are an ‘eligible person’ (e.g. the member or their spouse); and
- have a genuine reason for needing the information.
If you are a party to court proceedings you may send a request to the ATO via the Commonwealth Courts Portal.
To value a defined benefit fund, a Superannuation Information Request Form must be sent to the fund. These funds are difficult to precisely value. The information provided by the fund may have to be valued by an actuary. Defined Benefit valuation formulas are usually based on factors such as:
- the member’s age
- their length of employment
- their salary at retirement; and
- the value of their super at retirement.
Self-managed super funds (SMSFs) are private superannuation trust funds managed by the parties. A SMSF is established under a trust structure with each SMSF member also a trustee. The sole purpose of the trust is to provide its members with retirement benefits.
An expert is generally required to value a SMSF and splitting it’s assets can be complex.
There may be tax implications dependent on the nature of the assets to be split.
Splitting a SMSF usually requires the fund to be restructured to comply with superannuation regulations and laws.
A SMSF interest may be split by a Financial Agreement or by a court order. It can be split as a dollar amount (called a base amount) or as a percentage of total entitlements. A base amount payment guarantees the amount that a non-member spouse receives, while the amount of a percentage split will vary depending on the interest’s value at the relevant time.
Once the superannuation interest has been split, the non-member spouse can generally opt to:
- create a new interest in the same fund (provided the SMSF Trust Deed allows this); or
- transfer or rollover the interest into another fund; or
- if they have met the conditions of release under superannuation laws – receive the amount as a lump-sum payment.
How do I formalise a super splitting agreement?
An super splitting agreement can be formalised by parties:
- entering into a Financial Agreement; or
- applying to the court for Consent Orders.
An Application for Consent Orders with proposed Consent Orders is filed electronically in the Federal Circuit and Family Court of Australia. Court approved Orders are legally binding and enforceable on the parties and on the superannuation fund trustee.
A Financial Agreement (FA) is not filed with the court, but each party must receive independent legal advice for it to be binding and enforceable.
Before finalising a FA or filing proposed consent orders you must provide the trustee of the superannuation fund with ‘procedural fairness’ by providing them with the member’s number and date of birth, and the orders sought.
The trustee has 28 days to object to the proposed orders. A letter from the trustee agreeing to the proposed orders is filed with an application for consent orders.
A party then serves the Orders or signed FA on the trustee of the super fund. The trustee arranges for a payment from the member spouse’s interest to a super fund nominated by the non-member spouse.
Is there a time limit?
If you were:
- married – within 12 months after divorce;
- in a de facto relationship – within 2 years after you separated.
You may seek the court’s leave (permission) to apply for a superannuation splitting order after the limitation period if you can establish hardship. However, there is no guarantee that leave will be granted.
How is an inheritance treated?
An inheritance is not a protected asset. The family courts exercise a wide discretion about how an inheritance is treated.
Will an inheritance be included in the property pool?
The mere expectation of a future inheritance is not sufficient to include it in the property pool. An inheritance will be considered only where it has already been received or where evidence convinces the court that a party is likely to receive an inheritance in the very near future.
What will the court consider?
How an inheritance is dealt with depends on the circumstances. The court will consider what, if any, weight to place on an inheritance.
If an inheritance is received about the time the parties started co-habiting, it is generally considered an initial contribution by the person who received it. Its impact on the recipient’s entitlements depends on its size and other contributions made.
Treatment of an inheritance received during the relationship depends on the deceased’s intentions regarding the inheritance and how it was applied.
In certain circumstances (e.g a large inheritance received late in a relationship and an otherwise small asset pool, significant contributions by the non-recipient) an inheritance may be included in the asset pool to give the non-recipient a just settlement.
An inheritance received after separation is not usually treated part of the asset pool for distribution between the parties.
Property Settlement and Business Ownership
How are business assets divided if you separate?
Whether business assets need to be divided will depend on whether your ex-partner’s entitlement can be funded in another way.
Can you lose your business in a separation?
Yes. Selling the business or its assets may be necessary to pay the other person their entitlement if there are insufficient funds to fulfil the terms of the financial agreement or court Orders.
Can you sell your business before you separate?
You can sell your business at any time. However, that will not disentitle your ex-partner to any of the proceeds of the sale.
Information to gather early
Parties with business interests need access to:
- The financial position of the business; and
- How funds are being taken out of the business.
Does my business have to be valued?
How do I get a business valuation?
Where there are doubts as to the accuracy of the business’ valuation, a business valuation should be performed by an impartial forensic accountant with specialised business valuation knowledge based on their training, study or experience. The valuer should be instructed as to factors they are to take into account and the preparation of the report in case it has to be used in court.Can I choose my own valuer?
It can save time, money and further dispute if the parties jointly appoint an agreed valuer. If the parties do not agree on a joint valuer, separate valuations can be obtained. However, the court generally only allows separate valuers if there is a good reason.How much does a business valuation report cost?
A valuation report for a small business to be used in court costs about $10,000 to $20,000 . You may be able to obtain a preliminary report (which cannot be used in the family courts but may assist with negotiations) for less than $10,000.Who pays for a business valuation report?
Parties agreeing to appoint a joint valuer usually equally share the cost of the report. A party instructing their own valuer pays for the report.What are add-backs?
- the parties’ current assets and liabilities; and
- “add backs” or “notional assets” or “notional property”.
- should share financial losses they incur during co-habitation; and
- are entitled to incur reasonable living expenses after separating.
- acted recklessly or negligently resulting in the loss of or reduction in the value of assets of the relationship; or
- distributed joint monies or assets to themselves to the detriment of the other party
Reluctance in granting add backs
The court is increasingly reluctant to add back the value of treat dissipated funds lost assets to the pool. It is increasingly likely to instead award to the other party a higher percentage of the pool.What if one partner has lost or wasted money?
A loss must be significant in relation to the size of the asset pool before the family courts will make any adjustment. One party’s waste of relationship assets may be found to be merely a recreational activity without extreme loss or diminution in the pool of property for distribution. Such behaviour must significantly reduce the value of the parties’ assets and financial resources.How about negative contributions?
The family courts have generally rejected concept of negative contributions with one possible exception being if one party’s negative behaviour creates a greater burden for the other party.What are future needs?
The court determines what (if any) further adjustment should be made based on your “future needs”. The court looks to the future and decides whether to make an adjustment based on relevant matters in section 75(2) of the Family Law Act 1975
Evidence which may be relevant to future needs factors includes:
Parties’ age and state of health;
Care and control of children of the relationship under 18 years of age; and
Earning capacity.
What does "Just and Equitable" mean?
What is a Financial Agreement?
When can parties enter into a FA?
A FA can be entered into:- before the start of a relationship; or
- during a relationship; or
- after separation or divorce.
Is a FA binding on the Court?
A FA is binding provided it has been correctly drafted and executed. Each party’s solicitor must give them independent legal advice and sign a certificate attached to the FA to that effect. If a FA does not meet certain requirements, it may be set aside or void.What can a FA cover?
A FA can specify how the parties agree to divide the asset pool if the relationship fails. It can deal with property, financial resources and spousal maintenance.What are the advantages of a FA?
A FA can be a cost-effective way to protect your assets and safeguard your future income or inheritance. It can ensure you are financially secure in the event that your relationship breaks down. A FA can provide a degree of certainty to a couple. If a relationship ends, they can avoid unnecessary arguments, prolonged court battles, and the associated emotional and financial stress.What are the disadvantages of a FA?
The court can set aside a FA on the grounds of poor drafting or inaccurate advice.When is a FA binding?
To be enforceable, a FA must comply with the requirements of the Act. A FA is binding if:- it is in writing and signed by both parties;
- it includes a statement from each party acknowledging that they obtained independent legal advice;
- a court has not terminated it or set it aside;
- The parties are contemplating entering or are in a marriage or de facto relationship or have separated or divorced;
- A legal practitioner gave their client a signed statement confirming the provision of legal advice;
- the other party is given a copy of the statement; and
- It includes a separation declaration (if relevant).
When can a FA be overturned or set aside?
A FA can be overturned by the parties or through a Court order. An existing FA can only be updated by the parties creating a new FA that explicitly overturns the previous FA. Alternatively, the FA can be terminated by a termination agreement, which is only binding and enforceable if both parties sign the agreement after receiving independent legal advice as to their rights and the impact of terminating the agreement.Can the Court set aside a FA?
The grounds on which a Court can set aside a FA include:- the FA is not properly drafted and executed;
- A party:-
- acted fraudulently;
- signed under duress;
- acted unconscionably;
- intended to defraud a creditor;
- The FA included a superannuation interest that is “unsplittable” or operating under a “payment flag”; or
- a change in circumstances makes the FA impractical or inequitable and a party will suffer hardship if it is not set aside.
Is a FA worth the cost?
Former partners generally need to negotiate a property settlement. If the relationship ended on less than friendly terms, both parties may have to resort to stressful, expensive and prolonged court proceeding to settle their disagreements. A FA reduces uncertainty, enhances the potential for an amicable separation, and saves expensive legal fees.Arbitration in Family Law
Family law litigation is a lengthy, time-consuming and expensive process. Alternative dispute resolution mechanisms such as family law arbitration and family law mediation can speed up the resolution of disputes.
The benefits of family law arbitration are that:
- the costs are generally less than going to a final hearing; and
- matters can be finalised within weeks or months.
What is the difference between family law arbitration and mediation?
In arbitration and mediation, an impartial third person assists the parties to resolve a dispute.
A mediator assists the parties to communicate about a settlement by filtering negative communication and delivering messages between the parties so they can focus on reaching a resolution. The mediator can help to clarify outstanding issues and suggest solutions.
An arbitrator can determine a property dispute on a final basis. The arbitrator reviews evidence and submissions and gives the parties a decision called an arbitral award.
Only property matters can be arbitrated.
What is the process?
Both parties must consent to arbitration. The arbitrator may hold a Directions Hearing where they will make directions about documents the parties are to file in preparation for a hearing.
Arbitration usually produces a binding decision quickly and efficiently. Simple matters can be heard in one day.
The scope and the processes involved in arbitration can be determined by the parties. If the parties do not wish to present any oral submissions, then the decision can be based on written submissions only.
The parties are given an arbitral award setting out the arbitrator’s reasons for making the award and the findings of fact in the matter. The award can then be registered with the court. Section 13H of the Family Law Act 1975 provides that the award once registered has the effect of a decree made by the court.
What if I am not satisfied with an arbitral award?
If both parties are unsatisfied with the award, they may agree not to register it. In that case, it does not take effect.
If one party has registered the award but the other party is unhappy with it, they have 28 days to apply to the Court giving reasons why the award should not be registered.
A party seeking variation or reversal of an award must generally prove there has been an error of law.
It is important to ensure procedural fairness and the absence of bias. Arbitrators avoid private meetings with parties or their solicitors and maintain the formality of proceedings.
What is a de facto relationship?
- the degree of financial dependence between the partners;
- ownership, use and acquisition of the parties’ property;
- whether the parties had a sexual relationship;
- whether there are children of the relationship;
- the length of the relationship;
- the extent and nature of shared residence;
- whether the relationship is registered in an Australian state or territory;
- the degree of mutual commitment toward a shared life; and
- public aspects of the relationship.
Registering a de facto relationship
A de facto relationship may be registered with the NSW Registry of Births, Deaths and Marriages. The certificate issued can be used as proof of the existence and length of the de facto relationship and may create rights for property division, even if the parties have not lived together for two years.What is Spousal maintenance?
Spousal maintenance is an agreement in a family law property settlement that one former spouse or de facto partner will provide the other with continuing financial support after the breakdown of their relationship.
Generally, spousal maintenance is payable where:
- One party needs financial support; and
- the other party has the capacity to provide that support; and
- the family courts determine that providing the support is appropriate.
Spousal maintenance can be paid:
- by periodic monthly monetary payments; or
- as a lump sum cash payment as part of a final property settlement.
By filing an Initiating Application and supporting evidence.
The time limits to file an application are:
- for a marriage – within 12 months after a divorce Order.
- for a de facto relationship – within two years after separation.
After the expiry of the time limit, a party must seek the court’s leave (permission) to file an application by filing a preliminary application demonstrating hardship.
A party is liable to maintain the other party to the extent that they reasonably can only if the other party is unable to support themselves adequately.
The duration for payment is assessed case by case. Payments can be for an indefinite or specified period.
The court applies a threshold test of need versus ability to pay.
You can defend a spousal maintenance application by filing a Response to an Initiating Application and supporting evidence.
Tax and property settlements
An important but often overlooked aspect of family law property settlements is the tax and duty consequences of parties retaining or disposing of assets.
Capital gains tax
The Income Tax Assessment Act 1997 (ITAA) provides that capital gains tax (CGT) is payable on the profit from the sale, transfer or disposal of an asset to another person or entity. It applies to all assets with exceptions including the parties’ main residence.
Is our former family home exempt from liability for CGT?
You and your former spouse or de-facto partner’s family home is an exception and selling, transferring or disposing of it will not attract CGT for the period during which it was your main residence.
Is CGT payable on profit from the sale of investment properties?
Yes. If the sale is part of a family law property settlement, negotiations should take into account the payment of CGT.
If the property is in your joint names (or an entity controlled by you both), you will each be assessed to pay CGT on your share of the profit. If the property is in the name of only one of you (or an entity controlled by one of you), that person will be assessed to pay the CGT.
What is CGT rollover relief?
Where a CGT-liable asset is transferred between the parties (rather than sold) then normally CGT would apply to the transfer. However, if the transfer of the asset is a consequence of the breakdown of a relationship, then the ITAA (section 126-5) provides “rollover relief” on the transfer. CGT is disregarded until the party receiving the asset sells, transfers or otherwise disposes of it. The cost base or reduced cost base is that of the transferor partner on the transfer to the transferee partner.
Rollover relief only applies if:
- the asset is transferred between parties to a marriage or a de facto relationship or from a company or a trust to one of the parties (but be wary of Division 7A of the Income Tax Assessment Act 1936 [see below]); and
- The transfer is made in accordance with a court order, an arbitration award, or a financial agreement under the Family Law Act 1975.
CGT is payable when the investment property is later sold.
Will CGT be included in the property pool?
The case of Rosati and Rosati set out the principles as to whether CGT should be taken into account in valuing an asset in a family law property settlement.
Capital losses
Capital losses (when what you receive from the sale, transfer or disposal of an asset is less than what you paid for it) can be claimed against income.
Calculating CGT obligations
If and how much CGT you will have to pay or how much loss you may incur is a question for your accountant or tax lawyer.
The court can take future CGT liabilities or losses into account if certain factors are present (e.g. how the asset was acquired, the intentions of the parties at that time, and whether the asset sale is inevitable or part of a Court Order).
Transfer duty (or stamp duty)
Generally, properties and motor vehicles in New South Wales are not subject to transfer duty if the transfer from one party to the other is pursuant to a Court Order or FA under the Family Law Act 1975.
Income tax – deemed dividends
In some cases, a party to a family law property settlement may be treated as having received a dividend. This can happen if a shareholder receives an asset from a private company. The party who is treated as having received the dividend may be liable to pay tax on the dividend.
Goods and services tax (GST)
Where a company, owned by one party, transfers a car to the other party, the party receiving the car will not pay GST on the transfer (because it is not made during the course of the business).
However, if the company claimed the GST on the purchase of the car as a credit, it may have to pay GST on the transfer because the car changed its “purpose” from a private use asset to a company asset.
What is transfer (a.k.a. stamp) duty in NSW?
Transfer duty (also known as stamp duty) is a government tax that applies to certain transactions including the transfer of property ownership.
Is stamp duty payable on property settlement?
Traditionally, the purchaser of real property pays stamp duty. However, the Duties Act 1997 (NSW) provides that a breakdown of a marriage or de facto relationship exempts the transferee from having to pay stamp duty.
When one party transfers ownership of their interest in real property to their former spouse or de facto partner or to a child of the relationship pursuant to a family law court order or a binding financial agreement, the party receiving the property is exempted from paying stamp duty.
How can I get an exemption from liability to pay stamp duty?
- get a copy of your sealed court order or the original or a certified copy of your binding financial agreement containing the transfer of property;
- engage a solicitor who subscribes to an ELNO and:
- show them sufficient identity documents and sign a client authorisation form;
- complete a Revenue NSW Purchaser/transferee declaration form;
- complete an ‘exemption or refund – breakup of a marriage or de facto relationship’ form.
Your lawyer either processes the exemption in-house or (if they are not registered for Electronic Duties Returns) provides the documents to a law agent for processing.
Revenue NSW (or the law agent) provides your lawyer with a duties assessment number, which they enter in the ELNO’s workspace.
Bankruptcy
What is bankruptcy?
Bankruptcy occurs when a person is unable to pay their debts as and when they fall due. A person can be declared bankrupt if:- Someone to whom they owe money (a creditor), makes an application to the court; or
- they owe money and file a debtor’s petition (voluntary bankruptcy).
What is the effect of bankruptcy?
When someone is declared bankrupt, they lose control and possession of assets other than excluded asset types and their assets go into the control of (vest with) the trustee in bankruptcy.What if my ex-spouse is declared bankrupt?
Bankruptcy does not prevent a non-bankrupt spouse from pursuing a property settlement. The Family Law Act 1975 (Cth) protects the non-bankrupt spouse’s interests in matrimonial property. The non-bankrupt spouse can also share in the bankrupt spouse’s vested assets. The court balances:- the benefit of making an order in favour of the non-bankrupt spouse against
- the effect of an order on the creditor’s ability to recover debts from the bankrupt spouse.
What are the bankrupt party’s rights and restrictions?
The bankrupt party requires the court’s permission to make submissions to the court in relation to property vested in the trustee in bankruptcy.What are the clawback powers?
If a person who believes they are about to go bankrupt tries to prevent the trustee in bankruptcy having a claim on the property by transferring their property to their spouse, the trustee in bankruptcy can claw back any such transfer made up to 6 months before bankruptcy. Property clawed back is part of the bankrupt estate.Sole Use and Occupation Orders
What is a sole occupancy order?
A sole occupancy Court Order stipulates that the other party must vacate the property within a short period. As ordering someone out of their own home is a big decision, the family courts make these orders cautiously only in exceptional situations including where:- one partner is perpetrating family violence on or making threats against the other;
- the children are adversely affected by the parents residing together; or
- works have been done on the house to accommodate someone’s disability.
How do I get a sole occupancy order?
File an application with the court for a sole occupancy order to be in place until property settlement matters have been resolved.Family violence in NSW
If you are the victim of family violence, you should apply to the Police for an apprehended domestic violence order (ADVO) which may include an exclusion order removing a family member from your home.Property Settlements and Cryptocurrency
Cryptocurrency in property settlements
Each party’s obligation to fully and frankly disclose their financial circumstances to the other is not always observed. If one party holds but does not disclose significant assets in cryptocurrencies, it is difficult to prove its existence.
The preferred method for hiding assets is shifting from off-shore accounts to cryptocurrency. There is currently no efficient way to establish the existence of a cryptocurrency asset if the owner has taken even rudimentary measures to cover their tracks.
If the currency was bought through a deep net account or a third party and stored in a hard wallet, it is difficult to uncover possession of this currency. The funds used to purchase the currency must be forensically traced, which takes a lot longer with high accounting and legal costs.
What is cryptocurrency?
Cryptocurrency is a virtual or digital currency that is protected by cryptography, making it less vulnerable to counterfeiting. Most cryptocurrencies are decentralised networks based on blockchain technology, enforced by a widespread computer network. Cryptocurrency is a non-government issued currency, effectively making it immune to government interference or manipulation. Bitcoin is the most popular form of cryptocurrency, but there are others including Litecoin, Zcash, Ethereum and Ripple.
Is cryptocurrency legal?
Cryptocurrency was declared legal in Australia in 2017.
Valuing cryptocurrency for a family law property settlement
Cryptocurrency has an exchange rate and can be converted into dollars. The value of cryptocurrency fluctuates, making valuing it difficult for a property settlement.
To provide a greater degree of certainty, it may be preferable for crypto assets to be converted into cash and contributed to the asset pool in a more stable form. But this will not always be desirable or appropriate. The volatility of the asset value may need to be taken into account in considering the asset division.
Parenting
Equal Shared Parental Responsibility vs Equal Time
The term “equal shared parental responsibility” is often confused with the term “equal time”. Equal shared parental responsibility is not the same as equal time
There is a presumption in the Family Law Act 1975 (Cth) (subject to some exceptions) that it is in a child’s best interests for their parents to have equal shared parental responsibility. Parental responsibility is defined as all of the duties, powers, responsibilities and authority which parents legally have in relation to their children. This presumption relates solely to how parents make decisions for their children: it does not mean there is a presumption that children spend equal time with their parents.
Parents who share parental responsibility equally must make a genuine effort to consult each other about decisions about long-term issues concerning a child’s care, welfare and development. This includes decisions relating to a child’s health, education, cultural upbringing and living arrangements.
The presumption of equal shared parental responsibility can be rebutted (meaning there are circumstances where it does not apply). If for example:-
- there are reasonable grounds to believe that a parent (or someone living with that parent) has perpetrated child abuse or family violence, or
- it would otherwise not be in the child’s best interests
then the court will not apply the presumption of equal shared parental responsibility and will allocate parental responsibility between parents as it deems appropriate.
There is no presumption that children must spend equal time with each parent
The Act does not provide that a child must spend equal time with each parent after their parents separate.
Even where parents have equal shared parental responsibility, an order will only be made for equal time if the court finds that it is in the child’s best interests and reasonably practicable. If the court finds that equal time is not appropriate or practicable, it must instead consider making an order that the child spend “substantial or significant time” with both parents.
In considering how much time a child should spend with each parent, the child’s best interests are the court’s paramount consideration.
Consent Orders vs. Parenting Plans: What’s the difference?
Parents wanting to formalise their care arrangements for children after separation can choose to either:
- enter into a parenting plan or
- apply to the court for consent orders.
What is a parenting plan?
It is a written and signed voluntary agreement between parents under the Family Law Act 1975 dealing with aspects of the care, welfare and development of a child and may include:
- who the child lives with;
- time the child spends with parents or other persons;
- practical considerations of a child’s daily life; and
- consultation between parents on parenting issues.
Parenting plans can be changed at any time by both parents agreeing in writing.
A parenting plan under the Family Law Act 1975 must be between two parents, but can include other persons (e.g. step-parents and grandparents).
Are parenting plans legally binding?
No. If one party does not uphold their side of the agreement, the complying parent has no immediate legal recourse.
If court proceedings are later initiated, the court must consider the terms of a parenting plan but it is not bound by the terms. It will make the orders it considers to be in the child’s best interests.
Parenting plans allow parents to avoid entering the court system while still maintaining control over their parenting arrangement.
Should I enter into a parenting plan?
Separated parents should consider entering into a parenting plan if they can freely communicate about issues relating to the child and want structure in their co-parenting arrangement.
What is a Consent Order?
An alternate option to formalising your parenting arrangement is to enter into Consent Orders.
The Federal Circuit and Family Court of Australia makes consent Orders. Parties can file an Application for Consent Orders with the family courts. If a Registrar considers the proposed orders to be in the child’s best interests, they will ‘seal’ them and they will become legally enforceable Court Orders.
Consent Orders may be preferable where there is a possibility that a party may stray from the agreement.
If a court finds a parent has contravened an Order without reasonable excuse, it may impose penalties ranging from “make-up” time to (for severe breaches) imprisonment.
How do I apply for Consent Orders?
Complete and file electronically with the filing fee:-
- Proposed Consent Orders;
- Application for Consent Orders; and
- Notice of Child Abuse, Family Violence or Risk
Interaction between ADVO s and Parenting Orders
Parenting Orders generally require separated parties to co-operate around sharing the care of children. How does an Apprehended Domestic Violence Order (ADVO) impact on the arrangements under Family Law parenting orders?
Inconsistency between orders
Parenting orders are made in the Federal Circuit and Family Court of Australia, which has federal jurisdiction. In New South Wales, ADVOs are made by the Local Court, which has state jurisdiction. In Australia, as Commonwealth court orders override State and Territory court orders, parenting orders override any inconsistent obligations of an ADVO.
What if there are no parenting orders?
When the parties to an ADVO have children and the ADVO places a restriction on contact, the ADVO usually includes a condition that:
- allows for communication between the parents through a lawyer regarding parenting matters; and
- allows the parents to attempt to reach agreement on parenting arrangements by attending counselling, mediation or conciliation. If the parents reach a written agreement regarding parenting arrangements, even with no orders in place, contact between them pursuant to that agreement does not breach the ADVO.
Parenting plans are written agreements about parenting arrangements that are not court orders. Parenting plans are not legally enforceable and do not override an ADVO.
If a parenting plan is in place and the ADVO allows contact between parties as agreed in writing concerning contact with the children, if the protected person revokes their agreement to the parenting plan, any contact taking place thereafter will be a breach of the ADVO.
What if there is an ADVO when family law proceedings are commenced?
Federal Circuit and Family Court of Australia Orders override ADVOs. If an application is made to the family courts for parenting orders, the Court’s decision will be consistent with the child’s best interests. The Family Law Act 1975 requires the court to consider allegations about family violence.
What now?
If you are unsure about your obligations under an ADVO or under Family Law Orders, you should seek legal advice. The penalties for breaching an ADVO are severe including up to two years imprisonment.
What is relocation?
In this context, relocation refers to you moving with the children to another town, state or country.
If you are the children’s primary carer and you want to move, you should first talk to the other parent to try to agree to change the time the children spend with them.
If you cannot reach agreement, you should attend family dispute resolution. You should formalise any agreement reached by signing a parenting plan, or by applying to the Federal Circuit and Family Court of Australia for parenting orders.
If you cannot agree then the court may intervene. A relocation order sets out conditions of relocation.
If moving is going to limit the time the children spend with the other parent, the family courts may make orders stopping you from moving. If you move without a Court order or the other parent’s consent, the family courts may order that the children be returned until final orders are made. If you break a current court order not to move, the other parent can ask the Court to order that the children be located and recovered to their care.
You must show the Court how relocation would be in the best interests of the children and how the other parent might still have a relationship with the children.
What are location and recovery Orders?
When you are prevented from spending time with your child because the other parent has taken them and not disclosed their whereabouts you can file a recovery order and/or a location order in the Federal Circuit and Family Court of Australia.
What is a Commonwealth Information Order?
Commonwealth Information Orders may be made requiring the Secretary of a department or authority such as Centrelink, Medicare, the Australian Tax Office and Child Support to provide the family courts with information about a child’s location, or disclose the other parent’s whereabouts.
What are Publication Orders?
The family courts can also make publication orders, which enable the media to report limited details and publish photos of missing children and the person they are thought to be with.
How do I apply for a Recovery or Location Order?
An applicant for a A Recovery Order or a Location Order must have:
- existing parenting orders;
- proceedings on foot in the family courts; or
- filed an application seeking parenting orders.
If they only have a parenting plan or a verbal agreement about who the children live with and spend time with, when applying for a recovery or location order they must also apply for parenting orders.
What if there is family violence?
Where:-
- family violence has been alleged, or
- there is a risk of family violence, or
- the court has made a family violence intervention order
and the applicant is
- alleged to have committed family violence; or
- is the respondent to an intervention order where the other parent and/or children are an affected family member or a protected person
the family courts may not give the applicant information divulged to under a location order. The information will be provided to persons such as the applicant’s lawyer, court officials, the process server, or a police officer. If the applicant is unrepresented, the family courts would either:-
- provide the information to a marshal who can arrange for service to occur, or
- appoint an independent children’s representative to contact the other party.
What is a recovery order?
The family courts can also make a recovery order requiring the return of a child, which authorises or directs another person (usually the Australian Federal Police [AFP]) to find, recover and deliver the child.
The family courts may authorise the AFP to stop and search any vehicle, vessel or aircraft in which the child is suspected to be. If the AFP lacks the resources to retrieve the child, they may ask the state police to become involved.
Who will execute the recovery order?
The AFP will normally execute a recovery order only if the applicant is with them at or near the place from which the child is to be recovered. If the child was taken interstate, the applicant will have to travel interstate at their own expense.
If a parent removes a child from the Commonwealth of Australia without the other parent’s consent or the court’s authorisation, then the Hague Convention on the Civil Aspects of International Child Abduction (the Hague Convention) may apply. The Hague Convention is an international treaty providing for the return of children from a member country to which they have been taken to the country of their origin. These applications are dealt with by the Australian Government Attorney-General’s Department.
Do I have a right to see my grand-children?
Grandparents can apply to a court under the Family Law Act for orders that their grandchildren live with or spend time with them.
It is important for children to have a relationship with their grandparents, but this does not give grandparents an automatic right to spend time with their grandchildren. It depends on what is in the best interests of the children.
A grandparent can ask separated parents to include them in a parenting plan or consent orders. If you and the parents cannot agree on or when your grandchildren will communicate with or spend time with you, you can apply to the family courts for parenting orders about your grandchildren.
Child Support
Binding child support agreements - Advantages and Disadvantages
When a separated couple has children, one parent is usually required to pay the other child support. The amount can be determined by either:-
- a specific calculation; or
- a detailed formal document that both parties agree to (a child support agreement).
How does child support work?
There are alternative child support options:
- pay child support as assessed by Services Australia (formerly the Child Support Agency); or
- Parents negotiate an informal agreement as to what their arrangements are; or
- parents enter into a limited child support agreement:-
- which is in place for up to three years; and
- at least the amount of child support assessed by Services Australia must be paid; or
- obtain child support departure orders from the Court that someone should be paying more or less than the assessed amount provided:-
- a child support assessment is in place; and
- the applicant satisfies certain criteria.
When are Binding Child Support Agreements made?
Often when parents are negotiating regarding property matters, they will also agree to enter into a binding child support agreement.
What are advantages of a binding child support agreement?
Having a binding child support agreement give parents a sense of security and certainty and allows them to make arrangements to suit their family circumstances.
The agreement can outline things such as who pays private school fees, medical payments, private health insurance and extracurricular activities, or if a child has significant medical or educational needs.
Once the agreement is registered with Services Australia, it can be registered with and enforced by the Federal Circuit and Family Court of Australia.
What are the disadvantages of a binding child support agreement?
An agreement is in place until there is a terminating event (e.g. a child turning 18 or finishing secondary school).
The agreement can be ended by the parents entering into a termination agreement, which requires both parties to get legal advice.
If one parent refuses to enter into a termination agreement, the other parent must apply to the court to get the agreement terminated.
What should I do when considering a binding child support agreement?
- work out what your children’s expenses are;
- consider what it is you want the agreement to cover;
- get some financial advice about budgeting, how much on average you spend weekly on your children, and how you will manage your funds;
- take into consideration both of your financial circumstances and work out what is achievable you both running two households.
A child support agreement may be conditional on several elements. It may be part of a package deal in that it comes into effect when the property settlement is finalised.
Independent Legal Advice
For a child support agreement to be binding, you must get independent legal advice about the effect of the agreement on your rights and the advantages and disadvantages of entering into the agreement at the time.
What is a Child Maintenance Order?
When parents separate, child support is generally assessed and collected through the Child Support Scheme, which is part of the Commonwealth Department of Social Services.
A parent is generally obliged to financially maintain their child until the child turns 18. When child maintenance orders are required to provide financial support to a child over 18, a parent can apply to the Federal Circuit and Family Court of Australia (FCFCOA) for a child maintenance order.
What are child maintenance orders?
The FCFCOA’s role in determining financial support payable for children is limited.
A child over 18 is not covered by the Child Support Assessment Act 1989 and their parent can apply to the court for a child maintenance order where the child:
- with a significant physical or mental disability needs ongoing care; and/or
- needs financial support to complete their education.
The court can make an order requiring a parent or step-parent to pay child maintenance.
Who can apply?
A parent, grandparent, the child, or anyone involved with the child’s care, welfare or development can apply.
How do I apply?
Where parents reach agreement as to the amount of child maintenance to be paid, they can apply to the FCFCOA together for an order.
If the parents cannot agree, one parent may file with the FCFCOA and have served on the other parent an application and evidence in support. The other parent then files and serves their response and evidence.
Each parent must disclose all information relevant to assessing their financial capacity and the merit of their application.
How much child maintenance is payable?
The court has discretion as to how much is payable and whether payment is by instalments or lump-sum payments.
To determine the amount payable, the court considers each parent’s income-earning capacity and financial position and the child’s ability to seek employment and their necessary (but not discretionary) expenses.
For applications relating to a child’s tertiary education, the court considers:
- the likelihood of the the child continuing and succeeding in their studies; and
- hardship the child would suffer if they had to abandon their studies for financial reasons.
The amount a parent is required to pay depends on their capacity to contribute.
How are payments collected?
Once child maintenance orders have been made, the receiving parent must notify Child Support of the order. The receiving parent can choose to receive payments directly from the other parent, or Child Support can collect them on their behalf.
When does the obligation end?
An end date is often specified in the court order.
Where to now?
If the difficulties in your relationship have become insurmountable, contact us for free telephone legal advice and representation in your Family Law matter.
We can also assist you with legal issues arising after settlement of your Family Law matter, including:
- property sales and transfers including obtaining an exemption from transfer duty, removing a caveat or priority notice, discharging a mortgage on title, and re-financing; and
- drafting a new Will.
