Twelve Months On: What the 2025 Family Law Reforms Mean if You Are Separating in Victoria

Crownmark Lawyers | Family Law Reforms Victoria 

The most significant changes to family law property settlements in roughly half a century took effect on 10 June 2025. A year is long enough for the early uncertainty to settle and for the courts to show, through their decisions, how the new rules actually work in practice. For anyone living in Victoria now, the picture is clearer than it was, and in several respects it is materially different from the law that applied to friends or family who separated only a couple of years ago.

The reforms came through the Family Law Amendment Act 2024 (Cth), which amended the Family Law Act 1975. They apply to most current matters, not only new ones. If your settlement has not yet reached a final hearing, the new framework applies to your case, whether you are litigating or negotiating privately. That last point is easy to miss. The standard a court would now apply also sets the benchmark for what a sensible private settlement should look like.

The end of "add-backs"

This is the change with the widest practical reach, and it is the one most people have not heard about.

Under the old approach, if one party spent, transferred, or otherwise disposed of money before the final hearing, the court could treat that money as though it still existed. The amount was notionally "added back" to the asset pool and attributed to the person who had spent it, and the pool was then divided. Money spent on legal fees, lost gambling, or quietly moved to a relative could all be brought back into account in this way.

That is no longer how it works. In Shinohara (2025), the Full Court of the Federal Circuit and Family Court confirmed that the only property a court can now divide is what actually exists, in a legal or equitable sense, at the time of trial. If the money is gone, it is gone from the pool. The position has been applied consistently since, including in decisions handed down this year.

The funds are not entirely forgotten. The court can still take account of how a person used money before the hearing, but it does so differently. Rather than inflating the pool, the conduct is weighed when the court assesses each party's contributions and their current and future circumstances under the new section 79 framework. In plain terms, the court adjusts the percentages instead of adding a phantom asset to the balance sheet.

The practical consequence matters. Where one party is inclined to spend and the other to preserve, the new approach tends to favour the spender, because there is no longer an automatic mechanism to reverse the spending on paper. If you are concerned that a former partner may dissipate assets before a settlement is reached, the time to act is early. Interim orders, injunctions, and careful record keeping now do work that the add-back once did after the fact.

Family violence is now part of the property question

For the first time, the economic effect of family violence is written into how property is divided. Previously this had to be argued through a narrow line of case law. It is now an express consideration.

The Act also contains a stand-alone provision recognising economic or financial abuse as a form of family violence. The examples given include unreasonably controlling a person's access to money, coercing someone into taking on debt, and dowry abuse. Where this kind of conduct has affected a person's ability to contribute during the relationship, or has left them at an ongoing financial disadvantage, the court can take it into account both when assessing contributions and when assessing future needs.

This is distinct from the protection order system. In Victoria, intervention orders are made under the Family Violence Protection Act 2008 and operate separately. The change here is that the financial effect of abuse can now shape the division of property itself, not only the safety arrangements around it.

Disclosure, pets, and a simpler divorce

Three further changes are worth knowing.

The duty to disclose your financial position fully and on an ongoing basis now sits in the Family Law Act itself, rather than only in the court rules. The obligation has always been taken seriously. Its elevation into the Act underlines that incomplete or strategic disclosure can affect the orders a court is prepared to make.

Pets are no longer treated as ordinary property. The Act now recognises a "companion animal" as a separate category. Where a couple cannot agree, the court can make an order about who keeps the animal, weighing matters such as each person's attachment to it, their capacity to care for it, and any history of cruelty. The court can order sole ownership or a transfer, but it cannot order shared arrangements.

Divorce itself has become simpler in two respects. Couples married for less than two years no longer need to file a counselling certificate before applying. And where a sole applicant has children under 18, attendance at the divorce hearing is generally no longer required, provided the paperwork is in order and the application is not opposed. The twelve-month separation requirement remains unchanged.

What this means if you are separating now

If your matter began before June last year and has not reached a final hearing, it is worth confirming how the new framework changes your position, because in many cases it does. If you are negotiating privately, the same rules apply to you as would apply in court, so the agreement you reach should reflect them. And if you are worried about assets being moved or spent before anything is settled, the sensible response is to deal with it early rather than to assume it can be corrected later.

These are significant changes, and the way they apply depends heavily on the facts of an individual matter. Sound advice early in the process tends to be far less costly than correcting courses once a settlement has been reached.

 Harjit Mahindroo

 Managing Partner

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