The End of “Add-Backs” in Australian Family Law: What Shinohara & Shinohara [2025] Means for Property Settlements

In a landmark ruling on 23 July 2025, the Full Court of the Federal Circuit and Family Court of Australia delivered Shinohara & Shinohara [2025] FedCFamC1A 126, a decision that fundamentally changes the approach to property settlements in family law. One of the biggest shifts: the long-standing practice of notionally “adding back” to the asset pool property or money that no longer exists has been legally ended.

What Were “Add-Backs”?

Traditionally, “add-backs” or “notional property” allowed courts to notionally restore into the asset pool certain amounts of money or property that had already been spent, wasted, or disposed of, under the logic that one party should not benefit from dissipating the pool of property before the final settlement. Examples included:

• Legal fees paid from joint or individual assets.

• Premature distribution of property.

• Wastage – that is, reckless or negligent dissipation of assets.

These amounts could be “added back” to the balance sheet at Step 1 under section 79 of the Family Law Act, even if the property no longer physically existed. This practice has been controversial and complex.

The Family Law Amendment Act 2024 came into effect on 10 June 2025. One of its key changes was to Section 79 of the Family Law Act 1975 (Cth), in particular clarifying what property can be “identified” and divided. Under the amended s 79(3)(a)(i), only existing legal and equitable rights and interests in property at the time of trial can be part of the divisible property pool. In short: the law now clearly restricts courts to consider only what still exists at the hearing, not what once existed but has since been spent, wasted, or disposed of.

What It Means for Clients (Separating Couples)

• Collect and preserve evidence early. Transaction histories, receipts, valuations, proof of where money went are more important than ever. If money was spent, you’ll need to show how and why.

• Understand your contributions. Both financial (income, assets) and non-financial contributions (care, homemaking, raising children etc.) are still very important. Dissipation or wasted assets will be factored into these, but under different legal sections.

• Be aware of current/future needs. The Court will look more closely at each party’s future circumstances: financial capacity, caring responsibilities, health, etc.

• Act with care during separation. Because property that is spent or disposed of cannot be “added back,” decisions made in the separation period (even before final court orders) can have lasting impact.

The Shinohara & Shinohara decision represents a turning point in Australian family law. The abolition of “add-backs” from the asset pool under Step 1 of property division clarifies the law, making property settlement more focused on what remains, rather than what once was. While some fairness mechanisms around contributions, wastage, and current/future circumstances remain, the landscape has shifted.

At Kennon Lawyers, our family lawyers in Melbourne have extensive experience in:

• Navigating complex property settlements under the Family Law Act 1975 (Cth).

• Advising on the impact of the Shinohara decision and the end of “add-backs.”

• Protecting your rights in divorce, separation, and family law disputes.

We provide clear, compassionate, and strategic guidance to help you move forward with confidence.

Contact us today to arrange a confidential consultation and get clear, practical guidance about your next steps.