On a weekend in March 2000 the Sunday papers carried the story of a woman in a de facto relationship. Despite having lived with her partner for 32 years, she wasn't entitled to half the house when the couple separated. She reportedly received just $100,000 of the $610,000 home that her partner had bought in both their names.

Although not typical, this decision highlights that there are legal differences between what happens when married couples divorce and when de facto couples separate.

It is no secret that more people are choosing to either not get married, or get married later in life. But that doesn't mean these people won't enter into serious, long-term, live-in relationships.

In NSW you are considered to be in a de facto relationship if you have lived together for two years, or have a child, says Robert Benjamin, a partner with Benjamin and Robinson and a Law Society spokesperson on family law.

But although some couples may feel that there is little difference between a de facto relationship and a marriage, there are important legal differences between the two that only become obvious - sometimes painfully so from a financial point of view - on separation.

While it is hardly romantic, it is just as important to know where you stand financially in the case of a split if you are in a de facto relationship as it is if you are married. In fact, if you are not the major breadwinner in the relationship, it could be argued that it is more important.

"If you are a homemaker type, you are going to do significantly worse as a de facto," says Max Meyer, a partner with Marshall, Marks, Kennedy. But if you are in a relationship where both partners contribute to the finances equally, you will do OK, he says.

The reason?

There is a national law concerning division of property between people when a marriage breaks down, but there is not a national law for division of property for de factos, explains Stuart Fowler from Stuart Fowler & Associates. "It is done on a State by State basis. The consequences in each State are different," he says.

While divorce cases are heard in a Federal court, the Family Court, de facto cases are heard in either the supreme, district or local courts, says Meyer. So States have developed their own rules and regulations about how de factos are treated.

"The State most similar to the Family Law Act is the ACT," says Fowler. "In family law [working out who gets what on separation] is a two-stage process," says Fowler. The courts look at the contributions by each partner in the "acquisition, conservation and improvement" of property from a financial point of view as well as the contribution by each partner to the welfare of the family. The Family Court then arrives at a notional division of assets. "Then an adjustment is made to the notional division by taking account of the comparative means, needs and financial resources [of each partner]."

This means it takes into account things such as the future earning capacity and financial obligations of each partner.

That is why you often hear of one party getting 60-70 per cent of the assets in family law Benjamin says. "A lot of that is based on their future needs."

But while step one of the process happens in NSW when de factos split up, the second part doesn't, says Fowler.

"The area missing in the NSW law for de factos is that they do not take into account the relative financial position, means or needs," he says.

So the de facto wife who cared for the three or four children, enabling her partner to become the world's best brain surgeon, and who has no earning capacity, wouldn't get an adjustment to take account of her reduced future earning power, he says. If it were a marriage, the Family Court would take this into account.

NSW courts have adopted a narrow interpretation when it comes to the future needs of the parties, agrees Benjamin.

"They still take into account the contribution as homemaker, mother and partner," he says, but they don't consider future needs. "De facto wives are not in the same position as married women. The non-financial contributor often does better in the Family Court."

The good news is that the NSW Government is aware of the inequities de factos face when separating says Benjamin. "It has a standing committee on social issues and this committee brought out a report in December saying they should be treated the same.

"They recommended amending the Property Relationship Act [the act which regulates how de factos are treated] so that the treatment is very much the same."

However, he says we shouldn't be expecting any action on that front anytime soon. "The Government has only had [the report] since early February 2000."

And then there is superannuation. It's an issue that is often a vexed one even for married couples who are divorcing, and it is even more so for de factos.

Michaela Anderson, head of policy with the Association of Superannuation Funds of Australia, says clarification on the treatment of superannuation on divorce has been eight years coming, but that the Federal Government is due to bring it out soon.

If you are married, the superannuation is a financial resource and it is taken into account when the assets are divided, says Benjamin. "In marriage, if I had half a million in super it would be taken into account."

However, this often ends up with a situation when one partner has all the super and no house and the other partner has a house and no super.

The Federal Government is working on a way to split the super between partners, in the same way that other assets are split.

But regardless of what is resolved with super and divorce, it won't affect de facto relationships, Anderson says. "The real problem is that the Commonwealth Government can't touch de factos. That comes under the State Governments."

As it stands, de facto partners in NSW are not entitled to have the super taken into consideration in the event of a split. But in an interesting twist, they do have the same rights over super as the married spouse does if the partner dies.

"It is really strange," says Anderson. "You are better off if they die than if they leave you." This is because anti-discrimination legislation required that funds include de factos in their definition of dependents, he says. Dependents receive preferential treatment when money is paid out of super funds as a "death benefit".

"So where you read spouse, you now read married or de facto. Anything the spouse can do, the de facto can do, in super terms."

Unless, of course, they are same sex. But even this may be about to change. A private member's bill was put before a Senate select committee recently by Anthony Albanese, MP for Grayndler. "It tried to ammend [the superannuation laws] to get same-sex [couples] defined with de factos and spouses," says Anderson. "But because it is a private member's bill [like all private member's bills], it can't actually have any revenue implications for the Budget."

This means any changes that come about won't apply to Commonwealth Public Sector Schemes, says Anderson. "It also means it can't touch the tax discrimination that goes on," she says. "Under the Tax Act, de factos are automatically seen in the same way as a spouse and the death benefit is tax free.

"But that doesn't apply for same-sex couples, unless you are able to prove [your] dependency on the dead partner.

"Therefore, it is still a tax question and this private member's bill doesn't touch tax for the same reason as it doesn't touch the Commonwealth Public Sector Schemes," she says.

Tax issues aside, if this bill is successful it would at least allow the trustees of super funds to pay out on death to same-sex partners without worrying about it.

"At the moment they rely on the definition of [whether the beneficiary is] financially dependent. Some funds use it very widely, and some court decisions use it very widely. But some use it very narrowly."

One area where being in a de facto relationship has an edge over being married is that couples can enter into cohabitation agreements that can be binding. This isn't the case for married couples.

"In the ACT, NSW and Queensland, parties entering into de facto relationships are able to agree how their assets will be dealt with in a legally binding way," says Fowler. "You can't do that in marriage."

This may change shortly, Fowler explains, as the Federal Government has proposed to amend the law to allow married people to enter into agreements as well. If this happens, he says, the perceived advantage of being able to regulate your own affairs in a de facto relationship, and not in marriage, will pass.

The one area where de facto couples and married couples receive equal treatment is with the question of children and child support. Parents have to take financial responsibility for their children, whether they are married or not.

"It doesn't make one iota of difference," says Benjamin, who adds that more than one man has found himself paying out 18 per cent of his income after a one-night stand.

"All children under the age of 18 come under the Child Support Agency and it rarely, if ever, gets to the Family Court," says Meyer.

So the burning question is - which State is best to live in if you are a de facto?

Michael Taussig, a partner with Barker Gosling, says although the rules governing de facto relationships vary substantially from State to State, it is an area they are all getting on top of. "Even in Tassie they are coming up to scratch. NSW is more advanced than Victoria, but Queensland is about to introduce the most far-reaching de facto and same-sex legislation I have ever seen."

Better to be gay in NSW

Although the rules for de facto relationships in NSW may not be perfect, the good news for same-sex couples is that they at least apply to them as well.

"The Property (Relationships) Act covers domestic relationships, either de facto or close personal relationships other than married or de facto between two adult persons whether or not they are related by family, where one provides the other with domestic support or care," says Fowler. "It covers gay and lesbian and other relationships that are of the entirely non-sexual kind."

"Under the Property Relationships Act, if you have been together for 10-20 years, gender doesn't matter," agrees Benjamin.

It also covers close personal relationships, which he says may have some interesting implications down the track. "If my son or daughter were to stay at home for two years and make a financial and non-financial contribution, they have a right to claim against the property before I die."

The same applies to newlyweds who may choose to live with one set of parents for some time while they save up to buy a house.

"It hasn't been tested but theoretically, after four or five years, they could sue the parents or the parents could sue them," Benjamin says.

He says the parents could claim they were entitled to some of the young couple's new house, or the young couple could say they were entitled to some of the parents' house.