When a relationship ends, the Property (Relationships) Act 1976 normally requires the partners to divide their relationship property equally.
But different rules apply if the relationship did not last for three years. In those cases, the way the partners must divide their property depends on whether they were married, in a civil union or in a de facto relationship.
For marriages or civil unions of less than three years (including any time they spent in a de facto relationship beforehand), each partner will normally be entitled to half the relationship property. But they must divide the family home and household items (like furniture and appliances) differently if:
- One partner owned them before the relationship started;
- One partner acquired them by a gift or an inheritance from a third party; or
- One partner has contributed much more to the relationship (by contributing money or property or non-financial contributions like childcare).
In those situations, the partners must divide that property in proportions that reflect their contribution to the relationship.
Rita and Penny
Rita and Penny are civil union partners. They live in a house that Penny owned before the relationship started. During the relationship, Rita starts a veterinary practice. She works long hours to make a success of the business. Penny helps by doing unpaid administration work. Penny also does most of the housework to allow Rita to work longer hours. Rita and Penny separate 18 months after entering their civil union. Rita’s veterinary practice has no value because it has big debts. Penny’s lawyer says this is probably a case where equal sharing will not apply. Instead, Penny has provided the couple’s most valuable asset, the home. She has also made what looks like greater contributions to the relationship than Rita, by supporting Rita at work and at home. Penny’s lawyer says it is likely a court would order that Penny should take a greater share of the home.
If the partners to a de facto relationship have been together for less than three years the rules of division in the Property (Relationships) Act 1976 will not apply. The only exceptions are if the couple have a child or if one partner has made substantial contributions to the relationship. Even then, the Property (Relationships) Act 1976 will not apply unless the court thinks there would be a serious injustice.
If the court thinks that the Property (Relationships) Act 1976 should apply, the partners must divide their property in proportions that reflect their contribution to the relationship.
Miles and Glenda
Miles and Glenda are in a de facto relationship. Glenda owns a house. The house is subject to a mortgage debt. Miles’ only asset of any value is his car. One year into their relationship, Miles and Glenda have a child together, Sally. Glenda provides full-time care for Sally. Miles has a good job and earns all the family’s income. He and Glenda use this income to pay for their living costs and the mortgage. He also accrues valuable superannuation benefits during the relationship. Miles and Glenda separate after being together for two and a half years. Miles sees his lawyer to find out how he and Glenda must divide their property. Miles’ lawyer says there is a good chance the Property (Relationships) Act 1976 will apply because Miles and Glenda have a child. They have both made contributions to the relationship and acquired property during the relationship. The lawyer says when the court looks at what proportions of the property each partner should get, it is relevant that Glenda has contributed the equity in family home and provided childcare. But it is also relevant that Miles has earned income and acquired superannuation benefits.
We want to know what you think about the rules that apply when a relationship lasts less than three years.
- How long should a relationship last for before the general rule of equal sharing applies?
- When should the special property division rules for short-term relationships apply to de facto relationships?
- What property division rules should apply to short-term relationships?