Just because a couple is living together it does not automatically mean they are in a de facto relationship. There are many different factors in determining whether two people are living in a de facto relationship, such as whether they share bank accounts, are in a sexual relationship, and whether they are known as a couple to family and friends.
If you are moving in with your partner and intend to form a de facto relationship, it’s important to understand your rights and responsibilities under the Family Law Act 1975 (Cth).
What is a De Facto Relationship?
Contrary to popular belief, there is no fixed timeframe required to be legally considered de facto. However, under the Family Law Act, a person may apply to the court for financial orders after the breakdown of a de facto relationship if:
- the relationship lasted for at least two years;
- the couple has a child together;
- the relationship has been registered under a prescribed law of a State or Territory; or
- one party made significant contributions (financial or otherwise) and would suffer serious injustice if an order were not made.
To determine whether a de facto relationship exists, courts consider several factors, including:
- Whether the couple lives together, and for how long;
- The nature of their sexual relationship;
- Whether they share joint finances or property;
- Shared responsibility for living expenses (e.g. utility bills);
- Whether they present publicly as a couple;
- Whether they have children together.
There is no single deciding factor – the existence of a de facto relationship is assessed on the totality of the circumstances.
How Do I Protect My Assets in a De Facto Relationship?
One of the most effective ways to protect your assets is by entering into a Binding Financial Agreement (BFA) – commonly referred to as a “pre-nup”. A BFA outlines how property, superannuation, and financial resources will be divided in the event of separation. It is especially useful where one party has significantly more assets than the other.
However, a BFA must be carefully drafted and executed. Courts can set aside a BFA if it was not entered into properly, involved undue pressure, or fails to comply with legal requirements. Each party must receive independent legal advice for the agreement to be enforceable.
If you do not have a BFA, you can still take steps to reduce legal and financial entanglement:
- Maintain separate bank accounts;
- Avoid joint property purchases;
- Ensure each partner remains responsible for their own debts;
- Avoid naming each other as beneficiaries in superannuation or insurance policies;
- Avoid financial planning or gifting between parties that could imply a shared future;
- The non-owner of a shared residence should pay rent/board, not contribute as a co-owner.
How Does the Law Treat a De Facto Relationship?
Under the Family Law Act, parties in a de facto relationship that meets the legal criteria can apply for:
- Property settlements;
- Spousal maintenance;
- Superannuation splitting.
These rights mirror those of married couples. To make such an application, the relationship must have ended after 1 March 2009, and the application must be filed within two years of separation. If this deadline passes, a party must seek special permission from the court to proceed.
What Are My Rights if My De Facto Relationship Ends?
If your relationship breaks down, and you meet the criteria under the Family Law Act, you can seek financial orders through the Federal Circuit and Family Court of Australia. This includes property division and spousal maintenance.
To qualify:
- You must prove that a genuine de facto relationship existed;
- The relationship ended after 1 March 2009;
- The application is filed within two years of separation;
- One or more of the legal thresholds (e.g. length of relationship, shared child, substantial contributions) is met.
Conclusion
De facto couples in Australia generally have the same legal rights as married couples when it comes to financial matters under the Family Law Act. However, because there is no single rule that determines whether a relationship is de facto, it’s important to understand how your lifestyle, finances, and commitments may be interpreted legally.
To protect your assets and reduce the risk of future disputes, consider entering into a Binding Financial Agreement – particularly where one party has significantly greater wealth or property.
This article is for general information only and does not constitute legal advice. For personalised assistance, please contact our office on (02) 9466 5189 or email [email protected].