What makes a relationship de facto and how can it impact a break-up?

You might not realise you’re in a de facto relationship, but the status of your relationship can have big consequences if you and your partner part ways.

"It's really important for people to understand the point at which their relationship meets that threshold of de facto," says Kira Duggan, the research director of Systems and Services at the Australian Institute of Family Studies (AIFS), in Naarm/Melbourne.

"Once it meets that all-important threshold, it really is like marriage."

A recent report from by AIFS outlines a steady decline in the national marriage rate and increase in the number of couples living as de facto. 

Ms Duggan says de facto couples "have almost tripled in recent decades … from six per cent of all couples in 1986 to around 20 per cent today".

But according to the AIFS report, the "ordinary understanding" of de facto relationships may not match up with the legal definition — and that can cause big surprises for people in the event of a break-up 

What does 'de facto' actually mean?

A relationship is recognised as de facto under Australia’s Family Law Act – provided they are not married or related – when the couple "have a relationship as a couple living together on a genuine domestic basis".

Ella Hickman, the principal and director at Perth/Boorloo-based Hickman Family Lawyers, says it’s quite common for people not to realise their relationship is considered de facto. 

Relationships often happen organically and "time just passes," she says.

"A de facto relationship is people who live in what we would call a marriage-like relationship." 

Living together, sharing finances, having kids and dividing up domestic labour are all components that would help assess this, she says. 

Generally, this needs to be the case for two years for a couple to be considered de facto. 

There are a range of different factors that go into that assessment, but Ms Duggan says if a couple is de facto, they essentially get the legal status and benefits of being married.

How could being de facto change a break-up?

When it comes to separation, changes to the federal Family Law Act in 2009 brought the status of de facto relationships in line with marriage, Ms Duggan says.

However, those in de facto relationships — unlike people who are married — need to prove the existence of their relationship. 

Married couples need to have been separated for at least 12 months to apply for divorce and they must apply to court for financial or property proceedings within 12 months of the divorce order taking effect.

Ms Hickman says couples who qualify as de facto must also apply for potential proceedings within two years, but the date of separation can be less clear cut.

She says one former partner might dispute the date of separation or that the entire duration of the relationship qualified as de facto. 

"I was involved in a trial earlier this year where parties had been together a very long time, but the argument was over whether the de facto relationship had spanned the entire period they were together or a shorter period in that," she says.

The perceived length of that relationship can have a significant impact on how assets, liabilities and contributions made by the couple are divvied up.

“I think for people conceptually, it's easier to understand marriage. There are clear dates where things start, and things end.”

So can an ex ask to split assets? 

Ms Hickman sees a lot more people who are navigating the breakdown of de facto relationships these days, and she says a former de facto partner could ask you to divide assets. 

"Your asset pool is everything you own yourself, everything your partner owns themselves and everything you own together," Ms Hickman explains. 

Like married couples, she says de facto couples' net position includes all those assets and liabilities.

“Then there has to be a discussion either between the parties if they're trying to agree, or from the court as to how we're going to split that.”

Big assets such as houses and super are common friction points, according to Ms Hickman. 

The laws around de facto relationships are consistent across states, except for Western Australia, where state legislation applies instead. 

As a result, Ms Hickman says former de facto couples in WA only got the ability to divide super as part of a property settlement in 2022. 

What happens when one of you owns a house? 

Even if someone bought a house before a de facto relationship began, it is more than likely in the asset pool in the event of a break-up, Ms Hickman says. 

“That's a house in someone's name, you're in a de facto relationship, it's in the pool,” she explains.

“The question then would then become, what will each of your contributions to that be and how should the equity in that be treated?”

It’s increasingly common for the person who owns the house to argue that their partner was just paying “rent” and for the other partner to argue that they made other contributions, such as gardening or paying for holidays. 

Unofficial rent agreements aside, Ms Duggan says the best guarantee of protecting your assets in the event of a separation in a de facto relationship is a prenup.

Called binding financial agreements in Australia, she says the "unromantic" option is not well utilised. 

Ms Hickman says getting legal advice can really help you navigate what you might be entitled to.

You don't necessarily have to pay for this, Ms Hickman says, and suggests services such as Legal Aid or community legal centres. 

"I always take the view that forewarned is forearmed, so if you get some information or a bit of knowledge up front, I think that usually goes a long way."  

This article contains general information only. You should consider obtaining independent professional advice in relation to your particular circumstances.