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A Fair Division Of Property When Relationships End

The Associate Minister of Justice Margaret Wilson welcomes the return of the Property (Relationships) legislation to parliament.

The new Property (Relationships) legislation extends coverage to include not only people in marriages but also those in defacto (including same sex) relationships. This provides protection to a large group of people in defacto relationships who do not have the same protection as their married counterparts under the present law.

The bill was tabled this morning.

The new law focuses on the division of property upon the breakdown of relationships, rather than the nature of the relationship.

"The proposed new law is clear," said Ms Wilson. "It's about property. It's not about moral judgements on people's perfectly legal decisions about their relationships. The reform of this law is long overdue.

"A good law will reflect reality and apply the same principles in situations in which the same property issues exist. This is exactly what the select committee has proposed.

"Whether a relationship is a marriage or a defacto (including same-sex) relationship, the same approach will apply when the relationship breaks up. The only exception will be when the partners have contracted out of their legal rights.

"The legislation reduces discrimination between same-sex and mixed-sex defacto relationships " said Ms Wilson. "Same-sex defacto relationships are essentially the same in law as mixed-sex defacto relationships. It is therefore appropriate that the same arrangements exist for the division of property when relationships end.

"I also welcome the recommendation of the select committee that the words 'husband', 'wife', 'spouse' and 'marriage' be included in the bill. The new law is about property, and it was never the case that the status of married couples would change as a result of the new law. But the government is delighted to make that quite clear by using traditional language in the law," said Ms Wilson.

Couples will continue to have the right to contract out of the new legislation if they so wish. The select committee has recommended that a specimen agreement be prescribed by regulation to assist people to contract out. There is also a requirement to seek independent legal advice before signing a contracting out agreement.

"The inclusion of same-sex and defacto relationships will be taken on a conscience vote," said Ms Wilson.

"The select committee, chaired by Tim Barnett, has done an excellent job. Everyone has the opportunity to look at this proposed new law in a dispassionate way. I commend the majority of the committee for the careful explanations of its decisions. The legislation allows a 12 months lead in time before it comes fully into effect.

"The law is sensible, fair, liberal and humane. It provides for the equitable, simple and speedy resolution of relationship property matters.

"It recognises individuals' rights to make their own arrangements to deal with the possible consequences of a relationship ending, but establishes a fair and basic standard which will apply in other cases," said Ms Wilson.

ENDS

Main points about the Bill as reported back

There are three pieces of legislation brought together and developed in the supplementary order paper reported back by the select committee. They are:

1. The Matrimonial Property Act 1976

2. The Matrimonial Property Amendment Bill introduced on 24 March 1998 and reported back on 15 September 1999 and considered by the House on 29 February 2000

3. The Defacto (Relationships) Property Bill introduced in 1998 to extend the law to include defacto relationships

These were originally brought together and developed in the Supplementary Order Paper (SOP) introduced by the Associate Minister of Justice Margaret Wilson on 16 May 2000 and referred to the Justice and Electoral Committee on 1 June 2000 along with the Bill.

The main proposals of the original SOP (and remaining in the legislation as reported back)

 The name of the law is changed to the "Property (Relationships) Act". Because the Bill proposes amendments to the existing law, the new law will be called the "Property (Relationships) Act 1976

 The law is extended to apply to defacto partners (including same-sex partners) who have lived in the defacto relationship for at least three years

 There is a single rule under which all relationship property is to be divided equally except in extraordinary circumstances

 If the actions of one partner directly or indirectly increase the value of separate property held by the other, the increase in value is classed as relationship property

 There are two provisions to deal with economic disparity.

1. The first empowers the court to award a lump-sum payment from relationship property where there are likely to be significant future differences in income and living standards between the partners (for example because one partner worked in a job and the other worked at home caring for children)

2. The second provision allows the court to award lump sum payments from any increase in the value of separate property arising from the actions of the owner during the relationship

 The Family Proceedings Act 1980 (spousal maintenance), the Administration Act 1969 and the Family Protection Act (1955) (wills and disposal of estates) are extended to cover defacto partners

The main changes made by the select committee

 "Defacto relationship" is defined

 A statement of purpose and a set of guiding principles is included

 A reference to the interests of children is inserted in the purpose section

 The words "spouse" "husband" "wife" and "marriage" "de facto" and "de facto partner" and "de facto relationship" are used (the original SOP had used the general category "partners"

 A minimum age of 18 years is established for partners to de facto relationships (i.e. a defacto relationship does not begin for the purposes of the Act until both partners are 18)

 The law comes into force on 1 February 2002, except for the contracting out provisions which apply from August 2001

 A specimen agreement for contracting out can be prescribed by regulation


Ends

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