Published on 15 December 1987. Last modified on 29 July 2010.

The ALRC received Terms of Reference to review laws relating to matrimonial property on 16 June 1983.

The final report (ALRC Report 39) examined Australian community attitudes to questions of matrimonial property law. The emphasis was on assessing the contributions of the spouses to property and welfare of the family, which was impractical and inappropriate, especially with regard to superannuation benefits.

The report concluded that there were serious shortcomings in the Family Law Act 1975 (Cth) and proposed various recommendations for reform.

Key recommendations

  • A strict rule of equal division is not the most appropriate test for whether a property re-allocation is just. The proper test is whether the economic hardship arising from the breakdown of the marriage has been distributed as fairly as possible having regard to:
    • the equal status of spouses;
    • any disparity, arising from the marriage, in the capacity of the spouses to achieve a reasonable standard of living after separation; and
    • the shared responsibility of the spouses for the future welfare of any dependent children of the marriage.
  • The Commission supported changes to the law which upheld general agreements made before or during marriage concerning property and maintenance rights.
  • The law should clarify the way in which prospective superannuation entitlements are taken into account, and to specify what proportion of the value should be included in the value of the property of the marriage.

Implementation

The Family Law Reform Act 1995 (Cth) included some features of the draft Bill provided by the Commission in its report, especially with regards to the recognition of non-financial contributions to the marriage, which are to be considered in the break up of matrimonial property and spouse and child maintenance. These reforms included placing a larger emphasis on the best interests of the child rather than treating the child as 'property'.

In March 1999, the Government released a discussion paper, Property & Family Law - options for change, which sought views on issues of matrimonial property reform. However neither option in the discussion paper (including a proposal for equal division as a starting point) gained significant support with the government reporting that the submissions overwhelmingly supported the retention of the status quo, with some minor modifications.

These minor modifications, passed in the Family Law Amendment Act 2000 (Cth), include allowing couples to enter into binding financial agreements before, during and upon separation of the marriage (as recommended by ALRC Report 39), as well as the provision of private arbitration to resolve property disputes within the marriage without going to court.

Superannuation

In 1998, the federal government announced reform of the treatment of superannuation in the context of family law so as to provide greater certainty and equity for separating couples' property settlements.

The government published a position paper, Superannuation and Family Law, in May 1998 in which it proposed reforms based on the premise that husband and wife are each entitled to share equitably in superannuation built up during their life together. Following consultation, the Family Law Legislation Amendment (Superannuation) Act 2001 (Cth) was passed. The Act (which commenced operation on 28 December 2002 ) allows couples to make binding superannuation agreements that enable them to divide their superannuation interest in the agreed proportions if their relationship fails. Where parties cannot agree, the legislation gives the court power to order that any accumulated superannuation be divided equitably. Superannuation trustees are required to divide the superannuation between the parties in accordance with the agreement or court order.

Continuing issues

The Commission again revisited the issue of women's unequal bargaining power and reiterated its findings in its reports on Equality Before the Law (ALRC 69) and Multiculturalism and the Law (ALRC 57).

The reform of family law is an ongoing issue that the federal Government continues to pursue. Work in the area of matrimonial property is regularly undertaken by the Family Law Council.