AN OVERVIEW OF AUSTRALIAN FAMILY LAW

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1 AN OVERVIEW OF AUSTRALIAN FAMILY LAW For the information of clients and prospective clients of Kennedy Partners The breakdown of a marriage or de facto (including same sex) relationship can give rise to various matters which need to be attended to and resolved. These may include: Divorce Property adjustment Spousal maintenance Parenting arrangements Child support Adult child maintenance All of these issues except child support come under the Family Law Act This is federal legislation and operates in all states and territories. The jurisdiction is exercised by the Family Court of Australia and the Federal Magistrates Court. Western Australia has its own Family Court but applies federal law in these areas. Child support is dealt with separately under the child support scheme. DIVORCE Divorce is the formal dissolving of a failed marriage. Australia has a no-fault divorce regime. The only ground for dissolving a marriage is that it has broken down irretrievably. This is established by the parties separating and living apart for at least a year. There is no provision for a quick divorce on fault grounds. The divorce can be granted provided that the ground is established after a twelve-month separation period (which may include a separation under the one roof) and in most instances is automatic. The Court may however refuse a divorce when it is not satisfied that proper arrangements have been made for the children, unless there are special circumstances why the decree should become final despite this. The divorce is quite separate from the other aspects of the marriage. Issues like parenting arrangements, property settlement, spousal maintenance and child support can be worked out independently of divorce at any time, and are not dependent on the grounds for divorce being established or an application being made /198027

2 2 PROPERTY ADJUSTMENT Australia has a discretionary regime for division of property on marriage breakdown. This regime also extends to the breakdown of de facto relationships, including same sex relationships, as from 1 March 2009, subject to some jurisdictional requirements. Jurisdictional considerations include the qualifying duration of a relationship (at least 2 years), whether there are any children of the relationship, the date of separation, and certain geographical requirements. The Court has a broad, general power to alter the interests of parties in their property and to make such order as it considers appropriate. That discretion is restricted only by the requirement that any order made must be just and equitable in the particular circumstances of the case. In considering what orders to make the Court is required to take into account:- The contributions of each party to the acquisition, conservation of improvement of the property. These contributions may be financial or non-financial; direct or indirect; or made by a party or on behalf of that party. Contributions to the welfare of the family constituted by the parties and any children (including contributions made in the capacity of homemaker or parent). These contributions do not have to be tied to any specific asset and are to be recognised in a substantial and not a token way. The effect of any proposed order on the earning capacity of either party. The factors set out below in relation to the determination of maintenance (to the extent that they are relevant to the property division). Any liability which either party may have for child support. The property division process is really a four-step one which requires the Court to:- 1. Identify and value all of the assets and resources and quantify the liabilities of the parties (regardless of whose name they are in or where they are located). Each party has an absolute duty to make full and frank disclosure of all information concerning their financial affairs to the other party and to the Court. 2. Assess the extent of the contribution of each party to those assets. 3. Consider the respective financial resources, means and future needs of the parties (and any other matters which justice and equity require to be taken into account) to ascertain whether any additional adjustment is required in favour of either party by reference to the same menu of factors as apply to spousal maintenance (see page 3 below). 4. Step back and consider whether the orders which are proposed to be made on the basis of the contributions and the needs of the parties are just and equitable (or fair ) in all the circumstances. A fifth step, to give consideration to whether either party is entitled to receive spousal maintenance, may be required if the property division does not enable a party to support themselves adequately.

3 3 SPOUSAL MAINTENANCE Each party to a marriage or a de facto relationship (including a same sex relationship) has an obligation to help maintain the other party to the extent that:- One party is unable to support himself or herself adequately; and The other party has a capacity to contribute to the maintenance needs of the party requiring assistance. In looking at whether a party can support himself or herself the Court must disregard any income-tested pension to which that party may be entitled. In exercising its jurisdiction the Court has to take into account a menu of factors specified in the Act including:- The age and state of health of each of the parties; Their respective income, property and financial resources; Their capacity for appropriate gainful employment; Responsibilities for the care and support of any children or other persons; The extent to which one party may have contributed to the income, earning capacity, property or financial resources of the other party; The length of the marriage or relationship and its impact on the earning capacity of each party; A standard of living for each party which is reasonable in the circumstances. If either party is cohabiting with another person, the financial circumstances of that cohabitation. The eligibility of either party for a pension, allowance or benefit. The superannuation entitlements of either party. The need to protect a party who wishes to continue the role of parent. Liability for child support. The effect of any order on the earning capacity of a party. Any other fact or circumstance which the justice of the case requires to be taken into account. The maintenance provisions are non-gender specific. They apply equally to men as to women (although maintenance orders in favour of men are, for obvious reasons, less usual) and to same sex couples. They are also subject to a general clean break provision which requires the Court, as far as practicable, to make Orders which will finally determine the financial relationship between the parties so that wherever possible, lump sum adjustments tend to be made in preference to periodic payments.

4 4 BINDING FINANCIAL AGREEMENTS It is possible for parties to a marriage or a de facto (including same sex) relationship to enter into a binding financial agreement detailing how property and maintenance matters will be dealt with upon the breakdown of a relationship, in substitution of their rights under the Family Law Act. Such an agreement can be entered into:- Prior to and in contemplation of a marriage (often referred to as a prenuptial agreement ); Before commencing a de facto relationship; During a marriage or de facto relationship; At the end of a marriage or de facto relationship. The effect of a valid agreement is to extinguish the power of the Family Law Courts to make orders in relation to the matters covered in the agreement. However there are very specific statutory requirements that must be met in order for such an agreement to be binding, including (amongst other things) the need for both parties to the agreement to obtain independent legal advice. PARENTING ARRANGEMENTS The Court is empowered to make parenting orders in relation to children. These orders may deal with any of the following:- The person or persons with whom a child is to live; The time a child is to spend with each parent or other persons; The allocation of parental responsibility for a child; Consultation about decisions to be made about a child; Communications a child is to have with a parent or another person; The process to be used for resolving disputes about the terms or operation of parenting orders; and Any other aspect of the care, welfare or development of a child or of parental responsibility. Reforms to the Family Law Act which took effect from 1 July 2006 have resulted in a change in approach to parental responsibility, parenting orders and court procedures in parenting cases. The reforms are commonly referred to as the "shared parental responsibility" or "shared parenting" reforms. Parental responsibility In the absence of any Court orders, each parent of a child under eighteen has parental responsibility for the child and that responsibility is not affected by any change in the parents relationship such as separation, divorce or remarriage.

5 5 In Court proceedings there is a presumption (subject to some exceptions) that "equal shared parental responsibility" is in the best interests of a child; and equal shared parental responsibility is conferred by a court order unless the order expressly provides otherwise. Equal shared parental responsibility requires parents to make joint decisions about major long-term issues for a child including education, religious and cultural upbringing, health, name, and any changes to a child's living arrangements that make it significantly more difficult for the child to spend time with a parent. Objects of the Family Law Act relating to parenting orders In making orders in relation to children the Court must have regard to the objects of that part of the Act dealing with children matters and its underlying principles. The objects are to ensure that the best interests of children are met by:- (a) (b) (c) (d) Ensuring that children have the benefit of both of their parents having a meaningful involvement in their lives; Protecting children from physical or psychological harm, including from the exposure to abuse, neglect or family violence; Ensuring that children receive adequate and proper parenting to help them achieve their full potential; and Ensuring that parents fulfill their duties and meet their responsibilities concerning their children. The principles underlying the objects are that, except when it would be contrary to a child's best interests:- (a) (b) (c) (d) (e) Children have the right and know and be cared for by both of their parents, regardless of whether their parents are married, separated, have never married or have never lived together; Children have a right to spend time on a regular basis with both their parents and with other people significant to their care, welfare and development (including grandparents and other relatives); Parents jointly share duties and responsibilities concerning the care, welfare and development of their children; Parents should agree about the future parenting of their children; and Children have a right to enjoy their culture (including with other people who share that culture). Time spent with parents Importantly, following the 2006 amendments to the Family Law Act, if a parenting order provides that a child's parents are to have equal shared parental responsibility, the court must consider whether the child spending equal time with each of the parents would be in the child's best interests and reasonably practicable; and if it is, consider making an order to achieve that. If parents are to have equal shared parental responsibility and the court does not make an order for a child to spend equal time with each of the parents, it must consider whether the

6 6 child spending "substantial and significant time" with each parent (including on weekends, school days, and holidays, at times enabling each parent to be involved in the child's daily routine, and for special occasions and events of significance) would be in the child's best interests and reasonably practicable. Whilst joint and shared parenting outcomes are regarded by the Family Law Act to be preferable, in deciding whether to make a particular parenting order the Court must regard the best interests of a child as the paramount consideration. In determining the child s best interests it must consider a range of primary and additional considerations:- The primary considerations are:- The benefit to a child of having a meaningful relationship with both parents; and The need to protect children from physical or psychological harm, including exposure to abuse, neglect or family violence. In applying the primary considerations, the court is required (as a result of new family violence provisions in the Act which commenced on 7 June 2012) to give greater weight to the second of these considerations. The additional considerations include:- Any views expressed by a child and any factors (such as the child s maturity or level of understanding) that the Court thinks are relevant to the weight it should give to the child s views. The nature of the relationship of a child with each parent and with other persons (including grandparents and other relatives). The extent to which each parent has taken or failed to take the opportunity to participate in making decisions about major long-term issues for the child, and to spend time with and communicate with the child. The likely effect on a child of any changes in the child s circumstances including any separation from:- either of his or her parents; or any other child, or other person (including a grandparent or other relative) with whom he or she has been living. The practical difficulty and expense of a child spending time with and communicating with a parent (and whether that difficulty or expense will substantially affect the child s right to maintain personal relations and direct contact with both parents on a regular basis). The capacity of each parent, or of any other person (including a grandparent or other relative), to provide for the needs of a child, including his or her emotional and intellectual needs. A child s maturity, sex, lifestyle and background (including culture and traditions) and any other characteristics of the child which the Court thinks are relevant. If a child is an Aboriginal or Torres Straight Islander child, other specific considerations, including the right to enjoy his or her culture.

7 7 The attitude to a child, and to the responsibilities of parenthood, demonstrated by each of the child s parents. Any family violence involving a child or a member of the child s family, including any family violence order (past or present) and any relevant inferences that can be drawn from the order. Whether it would be preferable to make the order that would be least likely to lead to the institution of further proceedings in relation to a child. Any other fact or circumstance that the Court thinks is relevant. The Court must also consider or have regard to: The extent to which each of a child's parents has fulfilled, or failed to fulfill, responsibilities as a parent (including participating in making decisions about major long-term issues in relation to the child, spending time and communicating with the child and maintaining the child) and the extent to which each of the child's parents has facilitated, or failed to facilitate the other parent doing so. If a child's parents have separated, events that have happened and circumstances that have existed since the separation occurred. Child's views Children are not required to express wishes. However the views of a child may be ascertained by way of a report prepared by a family consultant or other expert for the purposes of the proceedings, or by other means which the Court considers appropriate. The weight to be given to wishes expressed by a child will depend upon the particular child's age and level of maturity, amongst other things. In cases where the Court takes the view that a child ought to be separately represented, an Independent Children's Lawyer may be appointed to advocate the child s best interests. Alternative Dispute Resolution Alternative dispute resolution is encouraged by the Family Law Act and Court Rules. It is compulsory (other than in cases of urgency or abuse or family violence) to obtain a certificate from a registered Family Dispute Resolution Practitioner stating that there has been a "genuine effort" to resolve issues before parenting proceedings can be commenced in a Court. CHILD SUPPORT In most cases, support for children under 18 is determined outside the Court system by administrative assessment of the Australian Child Support Agency (CSA) under the Child Support (Assessment) Act The amount of support is determined in accordance with a fixed legislative formula based on an "income shares" approach, taking into account the income of each of the parents, the child's age, the time spent by the child with each parent and whether there are any other relevant children. However a one size fits all approach does not always lead to a just result, and the child support scheme provides for departure from administrative assessment in a range of circumstances such as where:-

8 8 The capacity of either party to provide financial support for the child is significantly reduced because of:- A duty to maintain another child or person. The special needs of another child or person who the parent has a duty to maintain. Commitments for necessary self-support. The high cost of contact (access). The costs of maintaining a child are significantly affected by:- The special needs of the child; or The child being cared for, educated or trained in the manner expected by the parents. The normal application of the formula provides an unjust and inequitable determination of child support because of:- The income, earning capacity, property or financial resources of either parent. Any payment or transfer or settlement of property by the liable parent for the benefit of the child. In those cases a parent is generally required to first seek a change of assessment by making application to the CSA and following the agency's internal administrative review process. Certain decisions of the CSA can be reviewed independently by appealing to the Social Security Appeals Tribunal (SSAT), the Administrative Appeals Tribunal (AAT) or a Court, as appropriate in the circumstances of a particular case. Parents can also enter into private child support agreements, either "binding" or "limited" child support agreements, which can be lodged with, and given effect to, by CSA, in place of an administrative assessment. For more information about the child support scheme the CSA web-site provides useful and easy to read facts sheets for parents: ADULT CHILD MAINTENANCE Parents also have an obligation to support their adult dependent student children where support is required to enable them to complete their education. There is also an obligation to support any adult child needing support by reason of a mental or physical disability. The amount payable will depend on the needs of the child and the child s own income and earning capacity, as well as the capacity of each parent to contribute to that support. Updated to October 2012 NOTE: This overview is for information purposes only and does not constitute legal advice. Any reader requiring legal advice should contact Kennedy Partners. Kennedy Partners 2012