The rules regarding “addbacks” in Australian family law have recently changed. The old method of notionally reassigning spent or lost assets to the property pool is no longer valid. This change was introduced through amendments in June 2025 and confirmed by the Full Court in the case of Shinohara & Shinohara under the Family Law Act.
In this blog, we will discuss what addbacks are, how they work, and the important changes made to rules regarding them. Now, only the property that still exists can be divided. Notional property or “addbacks” can no longer be included on the balance sheet for division.
What are Addbacks in Family Law?
To answer what addbacks are in family law, they refer to assets or funds that existed before separation but were later depleted (through spending, gifting, or legal fees, etc.). Courts would treat those as if they were still part of the pool.
Examples are known to include:
- Money used for legal costs
- Large withdrawals or gifts
- Disposal of property before the court proceedings.
Now that this practice is off the table, many things have changed. These matters are now part of the broader assessment of contributions and circumstances.
The Legal Shift: What Changed
The legal changes have had a significant impact on family law proceedings. Here’s an overview of the main effects.
Amendment to the Family Law Act
From 10 June 2025, the amendment in the Family Law Act introduced a key change: section 79(3)(a) now requires the court to identify existing legal and equitable rights and interests in property. In effect, only assets that still exist when the court assesses division can be included. Because the law now requires existing property, addbacks (which are, by definition, non-existent) cannot be included in the balance sheet.
The Shinohara Decision
In Shinohara & Shinohara [2025], the Full Court was asked to consider whether addbacks could survive under the new regime. This was a pivotal case regarding addbacks and their implications.
Here are the Key rulings:
- The trial judge had excluded the agreed-upon addbacks without allowing the parties to argue. That was held to breach the principle of procedural fairness.
- Addbacks cannot be treated as real property interest, so they cannot be included in the balance sheet under s 79(3).
- Still, the manner in which assets were spent or lost may influence how contributions and fairness are assessed under sections 79(4) and 79(5).
In effect, the Court removed addbacks from the pool and re-worked the division by focusing strictly on what remained, then weighing contributions and fairness.
What Still Matters: How Lost Assets Can Be Addressed
Though addbacks can’t go into the property pool, the fact that something has been spent or wasted does not vanish from consideration. The recommended family lawyers in Sydney will tell you that the law still allows for:
- Adjustments based on contributions (s 79(4)).
- Consideration of current and future circumstances (s 79(5)), including how disposal impacted what remains.
- Evidence showing how and when the asset has gone away.
Parties now need to present clear records and explanations of financial decisions made during separation.
Practical Ramifications in Property Settlement
Here are some takeaways when negotiating or litigating now that family law lawyers Parramatta also agree with:
- Only existing assets can be divided. Anything gone is not “added back.”
- Legal fees or misuse of funds won’t be reversed into the pool, but they can affect how fair division is calculated.
- Good documentation is essential: bank statements, invoices, and explanations for asset sales or transfers.
- Avoid making large unilateral withdrawals or gifts after separation without a valid justification.
- The legal strategy must shift: focus on structuring the best arguments under sections 79(4) and 79(5), rather than inflating the pool with notional items.
Conclusion
The end of addbacks is more than a technical shift. It forces everyone involved, like the clients, lawyers, and courts, to deal strictly with what remains. The role of lost assets now is in how they shape assessments of fairness and contribution, not in pretending they still exist. This decision for the Family Law Act will also have a significant impact on parties involved in family law proceedings. This is especially important when the remaining assets in the property pool are of lesser value than those already used or spent by the other party. It also remains to be seen how this approach will play out in cases where there is a large imbalance in legal fees between parties.
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