Amendments to the Family Law Act: Add backs no longer included in asset pool but may be considered as dissipated assets
Family Law: 08 September 2025
Author: Lauren Lydeamore - Our People
On 10 December 2024, the Family Law Amendment Act 2024 was passed by the Australian Parliament, with key changes coming into effect on 10 June 2025. One significant amendment was made to section 79 of the Family Law Act 1975 (“the Act”), which governs property settlements in family law matters.
Under the new s 79(3) of the Act, the Court is now directed to “…identify the existing legal and equitable rights and interests in any property of the parties…”
The emphasis on “existing” rights and interests has narrowed the scope of the asset pool, limiting it to property that physically or legally exists at the time of hearing. This marks a shift away from the previous practice of including notional property—commonly known as “add backs” in the asset pool.
Shinohara v Shinohara [2025] FedCFamC1A 126
The case of Shinohara v Shinohara was an appeal involving both parenting and property matters. The below discussion will focus solely on the property matters and the recent amendments to s 79 of the Act.
Background of the case
During their separation, the parties sold three properties. Most of the proceeds were spent on legal fees and other expenses. Both parties agreed to include add backs in the balance sheet, totalling approximately $592,768 in notionally added back property, plus vehicles, an e-bike, and a small shareholding. However, at trial, the judge excluded the add backs and restricted the asset pool to the remaining property.
Appeal and decision
On appeal, the wife argued that the primary judge erred in failing to afford procedural fairness, stating that the trial judge disregarded their mutual agreement regarding add backs. The husband contended that the recent amendments simply codified the existing judicial discretion on add backs (referencing Omacini and Omacini [2005] FamCAFC 104) and that they could still be included at the court’s discretion.
The Full Court allowed the appeal. However, in re-determining the matter, the Court applied the new law under s 79(3) of the Act.
The add backs were not reinstated into the asset pool, but the Court considered the use of the dissipated funds under ss 79(4) and (5) of the Act, which address contributions and future needs. This approach complied with the amended legislation while still recognising the impact of how the parties had dealt with property.
Key takeaway
The recent amendments to the Act bring an end to the traditional approach of treating spent funds as notional add backs in the asset pool. However, dissipated assets may still be assessed through the lens of contributions and needs under ss 79(4) and (5) of the Act. Legal practitioners should now focus on these sections when addressing the use of previously held assets in property settlement matters.