Family law in Australia has undergone significant changes that now place greater legal recognition on the effects of family violence, particularly economic and financial abuse, when determining property settlements after separation. These reforms are especially relevant for individuals navigating the division of assets in the aftermath of an abusive relationship.

Understanding Economic and Financial Abuse Under the Law

As of June 2025, amendments to the Family Law Act 1975 (Cth) have expanded the definition of family violence to explicitly include economic and financial abuse.

This means that abusive behaviour related to finances is no longer just a social or emotional issue; it’s now formally recognised as a form of family violence with legal consequences in property division proceedings.

Examples of Financially Abusive Conduct Now Recognised

Under the newly clarified provisions, the law now identifies several behaviours as forms of economic abuse, such as:

  • Preventing a partner from working or accessing their own income or superannuation.
  • Coercing a partner into taking on debt or creating debt in their name without consent.
  • Withholding necessary financial support for a partner’s or child’s living expenses.
  • Misusing or hiding dowries, or coercing dowry-related agreements in marriage.
  • Sabotaging a partner’s employment or ability to maintain financial independence.

This broader legal recognition ensures that those who have been subjected to financial control or coercion can seek a more equitable property settlement outcome.

How Courts Consider Family Violence When Dividing Property

Before the 2025 amendments, courts primarily relied on case law to assess how family violence affected one party’s ability to contribute to the relationship. Now, this principle is embedded in legislation, making it clearer for judges and lawyers alike.

Impact on Contributions

Under Section 79 of the Family Law Act, courts must assess each party’s contributions to the relationship, both financial and non-financial. If family violence impacted your ability to contribute (for example, if you were unable to work, parent freely, or participate in decision-making), the court may now consider these barriers in your favour when dividing the property pool.

However, this doesn’t mean an automatic adjustment will occur. The court will assess the extent and effect of the violence to determine whether a financial adjustment is appropriate.

Current and Future Circumstances

Courts also consider the current and future needs of each party. New factors added to the legislation include:

  • The effect of family violence on long-term health and employment: If a party was psychologically harmed or unable to work due to violence, this can now directly influence the settlement.
  • Material wastage: Excessive spending, gambling, or destruction of property by one party can be counted against them.
  • Debts and liabilities: The origin, purpose, and consequences of debts taken on during the relationship or after separation will be scrutinised.
  • Housing for children: Where children are involved, courts will now more thoroughly assess the housing needs of the parent who retains primary care.

These expanded factors help ensure that the court’s decision reflects not just the contributions of each partner, but also the real-world consequences of abuse—particularly for vulnerable individuals.

What Family Law Courts Cannot Do.

While these reforms offer greater protection in the property settlement process, it’s important to remember the limitations of the Family Law Court’s powers. Specifically, the court:

  • Cannot prosecute individuals for family violence, which is handled by state criminal courts.
  • Cannot award compensation for emotional or physical harm; this is a separate process through civil or victims’ compensation schemes.
  • Cannot issue or vary family violence orders, these are handled by the relevant state or territory Magistrates’ Court (e.g., NSW Local Court for AVOs).

For this reason, it’s often necessary to work with both a family lawyer and, where appropriate, a criminal or victims’ rights lawyer to ensure all aspects of your situation are addressed.

Why These Changes Matter for Victim-Survivors

The 2025 reforms to property settlement law represent a shift toward recognising the long-term effects of domestic and family violence, including financial and economic abuse, as part of Australia’s broader commitment to supporting vulnerable individuals during separation.

At Maatouks Law Group, our family law specialists in Sydney can help you understand your rights and ensure your contributions and circumstances are properly recognised.

When to Seek Legal Advice

If you’ve experienced financial control, coercion, or family violence in your relationship, it’s vital to get legal advice before negotiating or finalising your property settlement. These new legal changes may entitle you to a fairer division of assets than you originally thought.

Maatouks Law Group has over 30 years of experience in complex and high-stakes family law matters, including domestic violence-related property disputes. We provide compassionate, strategic advice that protects your rights and your future.

📞 Contact us today for confidential advice tailored to your situation.