What Is a de Facto Relationship? Classification, Obligations & Entitlements

• You are want to know if your relationship is classified as a de facto relationship;
• You wish to understand what a de facto relationship means for you now or could impact you in the future; or
• To learn your obligations and/or entitlements, if your de facto relationship has ended.

One of the more common reasons people wish to understand if they are in a de facto relationship is either to protect assets from the start of the relationship or to determine the entitlements of themselves or a previous partner to a property settlement. A property settlement is only possible if a relationship is legally considered to be a de facto relationship.

Importantly, for a relationship to be considered legally recognised as a de facto relationship varies from country to country. So, more accurately, the question we answer for you below is ‘What is a de facto relationship in Australia?’ 

What Is a De Facto Relationship in Australia Determined By?

In Australia, a de facto relationship is treated the same as a marriage. That means that upon the relationship ending, most people will be required to go through the financial disclosure and property division process, otherwise known as a divorce settlement or finance/property settlement. 

The determination of relationship status in a legal sense, will impact on what may need to occur and what you should consider. As explored in a number of other articles written by our team (and listed at the bottom of this article), if your relationship is legally classified as a de facto relationship, then there are genuine financial implications that can arise upon the de facto relationship ending.

The status of a de facto relationship falls under an area of the law known as family law and there are three key elements the Court considers when determining if a couple has been in a de facto relationship. Broadly speaking, the Court considers the length of the relationship (typically 2 years or more in duration) as well as taking into account the following information about the nature of the relationship:

• What the living arrangements were during the relationship
• How finances and assets were managed during the relationship
• Whether there were children from the relationship

If there is disagreement about whether the relationship was in fact a de facto relationship then the Court will consider the following when making a determination as to whether the relationship is to be legally considered a de facto relationship.

Historically, as soon as there are children born from the relationship, then the relationship is considered to be a de facto relationship, even if this is before the two year time period. However, as we’ll unpack later, this is not always the case.

In the end, if you are in disagreement about whether you were in a de facto relationship, you will need to demonstrate to a Court whether or not you were together on a ‘genuine domestic basis’. This is a phrase from the Family Law Act 1975, that means you had an intention to build a life together, that you lived together and had a romantic relationship, with a genuine commitment to each other. The following three elements are taken into consideration.

1. The Nature of the Relationship & Living Arrangements

One element in determining if a couple has been together on a “genuine domestic basis” takes into account how long and under what circumstances you have lived together or had a romantic or sexual relationship. Factors that are examined include whether:

• There has been a shared address
• There are additional properties involved (e.g. a second home, or separate properties but regularly sleeping at each other’s home)

When Living Arrangements Are Unclear

It can be difficult to define the exact nature of your living arrangements. Some instances include:

• Relationships where one party works away and is only at the shared home for a limited number of days across a year. 
• Where someone is in two concurrent relationships and therefore they have two residences. 

If your relationship started as two friends living together and grew to be a romantic relationship, a start date for the purposes of defining a de facto relationship can be difficult to discern.

Roommates are not considered to be in a de facto relationship so evidence of a romantic or sexual relationship is also required if looking to prove there has been a de facto relationship. 

You will be required to provide evidence of your claims if you do end up in Court. 

To prove or disprove your living arrangements will require information such as: 

• Your official postal address at the time of the relationship
• Your address on your driver’s licence
• Your listed address for tax purposes
• Your name detailed on a rental agreement, mortgage agreement or rates

The Court will also look at whether there were other properties involved. For example, did one person in the relationship have a second home? How frequently did they stay at each house? There might be factors which complicate the duration of time spent living together such as those who work away for an extended time, or maybe even two concurrent relationships where there are two family homes. 

Generally speaking, if your friends knew you to both be in a romantic relationship for a period of 2 years or more, your relationship would likely be considered to be a de facto relationship.

2. Financial Aspects of the Relationship 

Financial interdependence or the intermingling of your finances is also examined when determining de facto status. The Court will seek evidence of whether bank accounts were shared or kept separate as well as review expense types and how they were paid.  This includes smaller regular costs such as rent, groceries and bills or larger expenses such as home loans, car loans etc.

There are often times in relationships where one party bears greater financial responsibility. This could include one person’s inability to work due to: 

• Child raising responsibilities
• Illness
• Disability (amongst other reasons).

Evidence of responsibilities or issues like these can be used to demonstrate why you or your former partner were less involved in the financial aspects of a de facto relationship than the other.

3. Children Together

If you and your former partner had children together, this can be brought forward as evidence of a de facto relationship. In fact, having children in common is often what contributes to a Court’s determination that the relationship was a de facto relationship, negating the need to demonstrate that it had lasted the minimum 2 year period, among other determining factors.

That being said, recently in Queensland, there was a case that went through the Courts where two parties who shared two children from their relationship were declared to not have been in a de facto relationship. This is a significant result, as children have largely been a clear determining element of evidence of a de facto relationship. In this particular case, the Judge ruled that insufficient evidence had been provided to support the Application to the Court to prove that there had been a relationship on a genuine domestic basis. This case is an important reminder that all factors need to be taken into account, and that historical decisions made by the Court are not always followed in this highly discretionary area of law.

What Can A De Facto Claim Upon The End of the Relationship?

 If you are in a de facto relationship that comes to an end, then you may need to follow the property settlement process that divorcing couples undertake. This means that you or your former partner will need to go through the financial disclosure and property settlement process (often referred to as a divorce settlement). 

While we have explored what is involved in that process in previous articles, in short, this means looking at the assets and finances of both people, taking into account the contributions both have made including to superannuation, investments, inheritances, gifts and any interest you or your former partner has in businesses or trusts.

Defining Your Relationship

If you are at the beginning of your relationship and want to protect your assets or to ensure that the relationship will not be classified as a de facto relationship at a later date, you can organise to have yourself and your partner sign a ‘Binding Financial Agreement. When drafted by specialist family lawyers, a Binding Financial Agreement can allow you to intermingle some aspects of your finances but not others. For example, co-owning a piece of property, without it being able to be used as evidence of a de facto relationship at a later date.

Speaking with a trusted family lawyer can help provide direction about your first steps. The earlier advice is sought, as with all legal matters, the better the chance of people getting to an outcome, sooner.

Proving or Disproving A De Facto Relationship

If you wish to prove or disprove a de facto relationship, it is best to seek legal advice as early as possible. This is essential to help you adequately prepare and collate evidence in support of the Court proceedings. Early legal advice is especially important if you have limited time and resources. 

Importantly, an initial appointment with a lawyer is not an obligation to engage a lawyer and engaging a lawyer does not mean that your case will go to Court. If you have sufficient evidence to prove your relationship was or was not a de facto relationship, going to Court may be able to be avoided.

Getting the outcome determined earlier rather than later is critical.