Family law property settlement is the process the Federal Circuit and Family Court of Australia (FCFCOA) uses to divide property, assets and liabilities after separation or divorce, and the Family Law Amendment Act 2024 has changed that process in a major way. Specifically, the use of ‘Add backs family law property settlement’ to create just and equitable asset divisions has been removed, so the Court now focuses on the existing asset pool when determining a settlement.
For people going through divorce or the breakdown of a de facto relationship, that change can directly affect what is included in the pool, how contributions are argued, and the outcome of a property settlement. This article explains what the 2024 amendments mean in practice, how the abolition of add-backs is being interpreted in cases such as Shinohara and Shinohara, and what separating parties should consider when seeking legal advice or negotiating a just and equitable result under the current law.
Key takeaways
What add-backs family law property settlement
Add-backs were a mechanism that the FCFCOA could use to make adjustments to a property order. Sometimes, there’s evidence that money or property has been sold, transferred, or otherwise removed from the asset pool before financial or property orders could be made.
If the Court believed that a party had wilfully wasted the property pool to try and get an unfair advantage, it could notionally restore the disposed assets, treating them as if they were still part of the settlement. The add-back concept was never enshrined in the Family Law Act, which governs property settlements in Australia. But decades of court decisions established it as a recognised mechanism.
Add-backs typically dealt with three main categories:
The wasting of assets through behaviour like gambling or luxurious holidays.
Selling assets such as properties or vehicles, especially at below market value.
Legal fees paid with joint funds.
Some assets that can be at particular risk of manipulation include:
The family home if it has an old or incorrect valuation.
Business interests.
Superannuation interests.
What changed under the Family Law Amendment Act 2024?
A 2024 amendment to the Family Law Act clarified in Section 79(3) that the FCFCOA can only consider the legal rights and interests of the parties to existing assets and liabilities. This effectively abolished the use of add-backs.
The amendment attempts to clarify the process used by family law courts for determining property matters. Rather than relying on highly discretionary family law court mechanisms like notional property adjustments, decisions are based only on existing property shown on the balance sheet, with threshold or pool calculations sometimes assessed excluding superannuation interests, even though superannuation is treated as property for division in Australian family law.
The amendment made other changes to the Family Law Act, such as:
Clarifying the role of family violence in a party’s contributions and future circumstances.
Including the duty of disclosure in the Family Law Act, with separating couples having a duty of financial disclosure in family law proceedings.
Reforming the four-step process the Court uses in property matters.
Family violence impacts property settlements from June 2025, including through its economic effect on contributions and assessment.
Parties will also generally need to attempt dispute resolution before family law proceedings so they can try to reach their own agreement without going to court.
How the Shinohara case confirmed the new approach
The case of Shinohara and Shinohara in 2025 provided the first court decision showing the practical implications of the amendment on real-world cases. The case involved a property settlement which included $592,768 worth of add-backs due to the sale of two properties.
The primary judge did not include the add-backs in the property pool. On appeal, the Full Court confirmed that this approach was consistent with the recent amendment, while finding that the parties had not had a proper opportunity to be heard on the point before the primary decision was made. Instead, the Court’s assessment considered Section 79(5) to make a just and equitable division. In applying that section, the court assesses contributions based on their timing and significance and by reference to the parties’ individual circumstances. The judicial officer must consider all the evidence before making a just and equitable decision. This section lists factors the Court should consider in a property settlement, such as:
Each party’s income, property and financial resources.
The impact of any asset wastage caused intentionally or recklessly.
The nature and circumstances of any liabilities incurred by the parties.
The age and health of the parties.
Child support that’s being provided or may be provided in the future.
The effect of family violence perpetrated by one party on their former partner, including economic abuse.
Property that no longer exists cannot be restored to the balance sheet, but its disposal can still matter in cases involving premature distribution and procedural fairness before a final hearing.
What This Means For Your Property Settlement
The removal of add-backs doesn’t mean that parties are free to waste property interests relevant to the settlement. But it does mark a major change in how your property matter will be handled by the Court. Any potentially wasted property is considered in the context of each party’s contributions, shared finances, and current and future circumstances, including future needs, when assessing a fair outcome after separation.
Whether you’re going through a divorce or a de facto relationship breakdown, it’s important to get professional advice early, because time limits apply: married couples usually have 12 months after divorce, and de facto couples generally have 2 years after separation, so you should seek legal advice as soon as possible. A family lawyer can provide assistance in various ways, such as:
Applying for an injunction to prevent the other party from disposing of assets and address concerns about premature distribution.
Working with a forensic accountant to document any wastage accurately and help deal with premature distribution concerns.
If appropriate, they may facilitate dispute resolution so parties can reach their own agreement about property division or financial support, including consent orders, without contested court action.
Clarifying your contributions to any assets that have been disposed of, including non-financial contributions such as labour that improved a property’s value.
How any wastage has affected your current and future circumstances.
Helping you negotiate a settlement out of court, and where property is involved, high real estate values in Sydney may require expert valuations.
Assessing non-financial contributions, with homemaker contributions valued equally to financial contributions.
Advising whether a former partner may seek orders for spousal maintenance where one party cannot financially support themselves and the other can provide financial support.
Legal costs can rise quickly in contested matters, which is another reason early resolution may help.
Conclusion
The 2024 amendment to the Family Law Act requires that only property that currently exists in the asset pool may be considered during a settlement. While the add-back mechanism has been removed, a family lawyer may support you during a property matter if you suspect that assets have been disposed of inappropriately.
Do you need help with an existing property matter?
If you’re seeking legal advice for family law proceedings or a property settlement in south-west Sydney, Bateys Law Firm is ready to help. We assist separating couples with consent orders and court-based family law matters, including property disputes that can sometimes involve companion animals. Contact us today for a free consultation.
Disclaimer: This article provides general information only. It is not legal advice. Family law outcomes depend on your circumstances. You should speak with a family lawyer before making decisions about your matter.
