Understanding the Key Changes to Family Law Property Settlements Effective June 2025

From 10 June 2025, important changes to the Family Law Act 1975 will affect how property settlements are decided after separation.

These reforms will apply to all separating couples – whether they are negotiating privately, using dispute resolution, or having their matter determined in the family law courts.

This article provides general information to help you understand the new rules. It is not legal advice. If you have a current or upcoming property matter, you should seek advice from a qualified family lawyer.

What Is a Property Settlement?

A property settlement is the process of deciding how property, finances, and debts will be divided after a relationship ends.

Most couples reach their own agreement, sometimes with the help of mediation or negotiation. If agreement is not possible, the family law courts have the power to make orders about:

• Property (e.g. the family home, investments, superannuation)

• Liabilities (e.g. mortgages, loans, credit card debts)

Key Changes to the Law

The amendments to the Family Law Act 1975 affect:

1. How the court determines a property settlement – including a clearer process for identifying property, assessing contributions, and considering future needs.

2. Consideration of family violence – the court must now take into account the economic impact of family violence, where relevant.

3. Treatment of companion animals – new specific rules for deciding disputes about family pets.

4. Duty of financial disclosure – now set out in legislation, with the same obligations but clearer enforcement powers.

The New Property Settlement Process

When deciding a property settlement, the court will:

1. Identify all property and debts of both parties.

2. Assess each party’s contributions to the property pool and to the welfare of the family.

3. Consider each party’s current and future needs, such as age, health, earning capacity, and care arrangements for children.

4. Make orders only if they are just and equitable in all circumstances.

Even if you are negotiating outside of court, following this process can help ensure a fair and lasting agreement.

Family Violence and Economic Impact

From 10 June 2025, the court must consider the economic effect of family violence when deciding property matters. This includes recognising that economic or financial abuse may be family violence – for example, controlling all household income or preventing a partner from working.

This may affect:

• How contributions to the property pool are assessed (e.g. if one partner’s ability to contribute was reduced)

• Future needs considerations (e.g. if a partner requires ongoing medical or counselling support)

Importantly, the court cannot use these property settlement changes to:

• Criminally sentence a person for family violence (this is handled in state/territory criminal courts)

• Award compensation for harm (compensation may be available under other schemes)

• Make or change a family violence protection order (these are dealt with in state/territory courts)

Companion Animals in Property Settlements

Disputes over pets can be deeply emotional. From 10 June 2025, the court must consider specific factors in deciding who keeps a family pet, including:

• Any animal abuse (including threats involving the animal as part of family violence)

• The attachment of each party or any children to the animal

The court can make orders about ownership, but cannot order joint ownership or shared possession of pets.

Duty of Financial Disclosure

Separating couples have a continuing obligation to fully disclose all relevant financial information and documents to each other and the court. From 10 June 2025, this duty will be in the Family Law Act 1975.

Failing to comply may lead to serious consequences, including:

• The court taking non-compliance into account in its decision

• Cost orders against the non-complying party

• Punishment for contempt of court, including fines or imprisonment

• Deferral or dismissal of proceedings