BFA Considerations When One Partner Is A Stay-At-Home Parent

A binding financial agreement still binds you when one partner becomes a stay-at-home parent, but leaving paid work to raise children is one of the few changes that can bring the whole agreement undone.

Section 90K(1)(d) of the Family Law Act lets a court set an agreement aside where a change relating to a child causes hardship, and a clause waiving spousal maintenance can be void as well.

That combination catches couples off guard, because a BFA looks strongest on the day it is signed.

The parts that fail years later are almost always the parts nobody thought about when the agreement was drafted.

Does a Binding Financial Agreement Still Bind You if You Become a Stay-at-Home Parent?

Yes, an agreement that is binding and otherwise valid stays fully enforceable when one partner stops working to raise children, because that change does not end the agreement by itself.

An agreement can still be terminated by the parties, and it can still be challenged on one of the grounds set out in the Act or under ordinary contract and equity principles.

What a career break does is open one particular door.

Section 90K(1)(d) of the Family Law Act 1975 allows a court to set aside a financial agreement where “since the making of the agreement, a material change in circumstances has occurred (being circumstances relating to the care, welfare and development of a child of the marriage) and, as a result of the change, the child or, if the applicant has caring responsibility for the child (as defined in subsection (2)), a party to the agreement will suffer hardship if the court does not set the agreement aside”.

Section 90UM applies the same ground to de facto couples, except in Western Australia, where de facto property and financial matters are governed by the Family Court Act 1997 (WA) rather than the Family Law Act.

So the agreement is not automatically weakened by a birth or by a career break. It becomes vulnerable where that change leaves the carer, or the child, far enough behind the position they would be in without the agreement that a court is satisfied there is hardship.

What Does a Court Have to Be Satisfied Of?

A court has to be satisfied of two separate things, and proving one without the other gets nowhere.

The first is a material change in circumstances relating to the care, welfare and development of a child.

The birth of a child after the agreement was signed, a diagnosis that creates heavy care needs, or an agreed decision that one parent will leave the workforce can all qualify.

The second is hardship, and this is where most applications rise or fall. Hardship is measured by comparison, not by feeling.

In Daily & Daily [2020] FamCAFC 304, the Full Court described the exercise as requiring “some comparison between the position of the child, or the person with caring responsibility, if the agreement remains in place and the position of that child or person if the agreement is set aside”.

A judge therefore has to work out what the carer receives under the agreement, then work out what a court would likely order if the agreement were torn up, and compare the two.

Frederick & Frederick [2019] FamCAFC 87 shows how stark that comparison can be.

A child of the marriage was diagnosed with atypical autism and needed extensive care, which fell to the wife, and the Full Court set the agreement aside because the property available for division under the agreement was about $100,000 against a pool of roughly $4 million if the agreement did not stand.

That $4 million was the pool the court could then divide, not an amount the wife was guaranteed to receive.

What Happened in Daily & Daily?

Daily & Daily is one of the most useful appellate decisions on this exact situation, because the parties had agreed that the wife would leave full-time work to raise the children.

The couple signed a financial agreement in July 2005 and married two months later, separating in September 2018.

The wife gave up her full-time employment and took on the primary caring role, returning later only to part-time work at 0.8 of full-time hours.

Over the same period the husband’s superannuation rose from $67,669 to $970,578 and his savings rose from $74,230 to $693,508.

The agreement had recorded her net assets at $32,287 against his $404,282.

The trial judge set the agreement aside, finding she faced expenses well above her income and no prospect of anything other than rental housing.

The Full Court allowed the husband’s appeal and sent the matter back for rehearing, not because hardship was absent, but because the trial judge had not done the comparison properly.

The lesson is uncomfortable for both sides.

The carer cannot simply point to a modest outcome and call it hardship, and the wealthier partner cannot assume a signed agreement will survive a long relationship in which the other person stopped earning.

Does Having a Child Automatically Invalidate a BFA?

No, having a child does not automatically invalidate a binding financial agreement, and any source suggesting otherwise is wrong.

The ground in section 90K(1)(d) requires a material change relating to the child, plus hardship, plus a court exercising its discretion to set the agreement aside.

Plenty of agreements survive the arrival of children, particularly where the couple thought about it at the drafting stage and built the possibility into the document.

What does happen is that the risk profile of the agreement changes once a child is born and one parent’s earning capacity drops.

An agreement drafted on the assumption that both people would keep working is simply describing a family that no longer exists.

Can a BFA Stop a Stay-at-Home Parent Claiming Spousal Maintenance?

A BFA can waive spousal maintenance, but the waiver can stop working in the exact situation where a stay-at-home parent needs it most.

This is the least understood protection in the whole area, and it sits in one short subsection.

Section 90F of the Family Law Act says that no provision of a financial agreement excludes or limits a court’s power to make a maintenance order if the court “is satisfied that, when the agreement came into effect, the circumstances of the party were such that, taking into account the terms and effect of the agreement, the party was unable to support himself or herself without an income tested pension, allowance or benefit”.

The words “came into effect” carry enormous weight.

In Ellerton & Jennings [2021] FedCFamC1A 39, the parties agreed that their 2006 agreement became operative when they separated in May 2018, and the court upheld a finding that section 90F applied because the husband could not support himself without an income tested benefit at that date.

That did not award him maintenance.

It meant the agreement no longer stopped the court from hearing his claim, which is a different and earlier step.

A couple who both worked when they signed can therefore find that the waiver no longer protects them years later, once one of them has been out of the workforce for a long period, and the statutory test is met.

Whether it is met depends on the individual circumstances at the time the agreement comes into effect, not on the fact of being a stay-at-home parent.

What Must a Maintenance Clause Actually Say?

A maintenance clause in a BFA is void unless it names the person it applies to and states the amount or value involved.

Section 90E requires that a provision relating to the maintenance of a spouse party or a child “is void unless the provision specifies: (a) the party, or the child or children, for whose maintenance provision is made; and (b) the amount provided for, or the value of the portion of the relevant property attributable to, the maintenance of the party, or of the child or each child”.

Section 90UH imposes the same requirement on agreements made by de facto couples.

Ellerton & Jennings shows how fine the line can be, since two clauses in the one agreement were treated differently.

A clause recording that the parties were self-sufficient and that no provision for maintenance was necessary was upheld, on the basis that no provision meant nil.

A broader waiver clause failed, because it did not identify what amount of future maintenance each party was giving up.

This is where template agreements get into trouble, since a sweeping waiver written without a figure or a clear nil is exactly the kind of clause that falls over.

Where a clause is void, the position is the same as if it had never been written, and the door to a maintenance claim stays open.

Getting this right protects both people, since a clause that fails does not protect the payer and does not give the carer any certainty either.

Who Is Entitled to Spousal Maintenance in the First Place?

A person is entitled to spousal maintenance where they cannot support themselves adequately and the other party is reasonably able to help.

Section 72 of the Family Law Act states that a party to a marriage is liable to maintain the other party, so far as they are reasonably able, if that other party is unable to support themselves adequately “by reason of having the care of a child of the marriage who has not attained the age of 18 years”, or by reason of age or incapacity, or for any other adequate reason.

The first of those reasons describes the situation of a stay-at-home parent closely, though caring for a child does not create an entitlement on its own.

Maintenance is not automatic, and it is not a guaranteed lifetime income.

What is ordered depends on what one person needs and what the other can reasonably afford, and orders are often made for a limited period to cover the gap while someone retrains or returns to work.

For a parent who has been at home for a decade, that gap can still be worth a great deal.

What Should a BFA Include to Protect a Parent Who Stops Working?

The agreement should be built to change when the family changes, rather than freezing a snapshot of two working adults with no children.

Most agreements that fail were never designed for the life the couple actually went on to have. A well-drafted agreement can protect one partner’s business, inheritance or pre-relationship property and still deal fairly with the person who leaves paid work.

Those two goals are not in conflict, and treating them as if they are is what produces the lopsided documents that get challenged.

Should the Agreement Have a Review or Sunset Clause?

Yes, an agreement that will govern a long relationship should say what happens when the family changes, rather than staying silent and hoping.

A review clause commits both people to sitting down with their lawyers when a defined event occurs, such as the birth of a first child or one partner reducing their hours below a set level.

A sunset clause takes a harder line and causes the agreement, or parts of it, to stop operating after a set period or after a set event.

Neither clause can stop a court setting the agreement aside, and no clause can contract out of section 90K.

What they do is show that the couple turned their minds to the change in advance, and they give the carer a practical route to renegotiate before a separation rather than after one.

Should Entitlements Step Up Over Time?

Yes, stepped entitlements are one of the simplest ways to keep an agreement fair as a relationship lengthens.

A stepped structure sets out what each person receives at different milestones, so the payment or property share grows with the years spent in the relationship or the years spent out of the workforce.

An agreement that gives a partner the same fixed sum after eighteen months as it gives them after eighteen years is asking to be challenged.

Stepping the entitlement can also narrow the gap between the agreed outcome and a likely court outcome, and that gap is the thing a court measures when it tests hardship.

The steps need to be written in plain figures or a clear formula, since vague language creates its own arguments later.

Should Superannuation Be Split or Topped Up?

Superannuation deserves specific attention, because it is where a caring parent loses the most and notices the least.

Employer contributions stop when paid work stops, and the compounding that would have run on those contributions for twenty or thirty years never happens.

One recent change softens this a little.

Where a child is born or adopted from 1 July 2025, and a parent receives government Parental Leave Pay, the Australian Taxation Office now pays a Paid Parental Leave superannuation contribution into that parent’s fund as a lump sum after the end of the financial year.

That covers the paid leave period rather than the years of caring that follow it, so the wider gap remains.

The Australian Government’s Status of Women Report Card 2025 records that the superannuation gap between women and men “has narrowed from 24.6% in 2014-15 to 21.3% in 2021-22”.

A BFA can include a superannuation splitting agreement under Part VIIIB of the Family Law Act, or it can provide for the working partner to make contributions to the carer’s fund during the caring years.

Contributions during the caring years are subject to the usual superannuation rules and caps, so the right approach depends on both people’s circumstances and needs financial as well as legal advice.

Should Some Property Be Left Out of the Agreement?

Leaving a defined pool of property outside the agreement is often the most practical protection of all.

An agreement does not have to cover everything a couple owns.

It can quarantine the assets that genuinely need protecting, such as a business, a farm or an inheritance, and leave the family home, the joint savings and the superannuation to be dealt with under the ordinary law if the relationship ends.

That structure gives the asset holder the protection they actually wanted, while leaving the carer with a real claim over the assets built during the relationship.

It can also make the agreement easier to defend, because a court asked to look at it later sees a document that dealt with a specific risk rather than one that stripped one person of everything.

How Does a BFA Signed Before Children Compare With One Signed After a Parent Leaves Work?

An agreement signed before children is exposed to future change, while an agreement signed after one partner has already left work deals with a loss that can be measured today.

The table below compares the two situations across the points that matter most in practice.

The most important line in that table is the first one. A couple signing before children are asking a lawyer to advise on something that has not happened yet, and the advice can only be as good as the assumptions behind it.

A couple signing after one of them has already stepped back can put a figure on the loss, which makes the agreement fairer and leaves less room for argument about what each person understood.

That does not close off every challenge, since grounds such as non-disclosure, unconscionable conduct and later child-related changes remain available whenever the agreement was signed. Neither situation is a reason to avoid an agreement, but they call for very different drafting.

Why Does a One-Sided BFA Put the Wealthier Partner Most at Risk?

Unfairness on its own is not a ground for setting a BFA aside, but an agreement that leaves the caring partner with almost nothing is the agreement most exposed to the grounds that do exist.

The Act allows agreements that favour one person heavily, and a court will not rewrite a bargain simply because it looks lopsided.

What a very one-sided outcome does is make the hardship gap wider, and it forms part of the background a court looks at when someone argues undue influence or unconscionable conduct. This is the point that gets missed in almost every discussion of prenuptial agreements.

The wealthier partner is usually the one relying on the agreement holding up. If it collapses, they face a full property settlement, years of litigation and legal costs, often at the worst possible moment.

A balanced agreement that survives is worth far more than an aggressive one that does not.

What Did Thorne v Kennedy Decide?

Thorne v Kennedy [2017] HCA 49 confirmed that courts will examine the whole situation in which an agreement was made, including the imbalance between the parties and the pressure surrounding the signing.

The High Court’s summary records that Ms Thorne was “an Eastern European woman then aged 36” living overseas with “no substantial assets”, while Mr Kennedy was “an Australian property developer with assets worth over $18 million”.

About eleven days before the wedding, he told her that “if she did not sign it then the wedding would not go ahead”.

The High Court unanimously held that the agreements “should be set aside for unconscionable conduct”, with a majority also finding undue influence.

The important limit is that the court looked at the circumstances in which the agreement was made, not at how the relationship turned out afterwards.

Becoming financially dependent years later does not by itself show undue influence or unconscionable conduct at the time of signing.

Where it matters is when the person was already dependent, rushed or without real choice when they signed, which is a live risk in a couple already planning for one of them to stop working.

That is why one-sided terms are worth avoiding for the party proposing them, even though the High Court accepted that agreements can properly favour one side.

What Happens When an Agreement Fails Years Later?

When an agreement fails, the costs run far beyond the property that changes hands, and they can follow the parties and their lawyers for years.

The dispute in Daily & Daily eventually reached the High Court in a different form.

In R Lawyers v Mr Daily [2025] HCA 41, decided on 5 November 2025, the husband sued the firm that had drafted and advised on his agreement, after his former wife applied to have it set aside following their separation.

The High Court held that his claim for the financial losses flowing from the property settlement “was bound to fail because … he failed to adduce evidence establishing the fact of loss beyond the wasted litigation costs”, while also holding that the negligence claim was “not statute barred” because the cause of action accrued at separation.

A document signed in 2005 was still producing litigation in the High Court twenty years later. That is the real cost of an agreement that does not anticipate a family where one parent stops working.

What Else Should Couples Consider Before One Partner Stops Working?

The legal document is only part of the picture, and a few practical points sit around it that shape how well the agreement ages.

Working through them before signing is far cheaper than arguing about them later.

How Big Is the Gap the Carer Actually Takes On?

The economic gap created by full-time caring is large, measurable and heavily weighted towards one partner in most Australian families.

The Australian Bureau of Statistics found that in 2024 “females spent more time on unpaid work, at 4 hours 53 minutes on average a day, than males at 3 hours 52 minutes”, and that female parents of children under 15 who did unpaid work spent an average of 7 hours 29 minutes a day on it against 5 hours 2 minutes for male parents.

Paid work follows the same pattern.

In June 2025, the ABS recorded that among couple families with dependants, 73.2 per cent had both parents employed and 21.5 per cent had only one parent employed, with 90 per cent of husbands or male partners employed against 78 per cent of wives or female partners.

Those figures matter to a BFA because they describe the shape of the loss the agreement is dividing up.

Most couple families do have both parents in work, so the point is not that one parent always stays home.

It is that the unpaid load and the employment gap both fall more heavily on one side, and an agreement drafted as though the two contributions will always match is drafted against the pattern the data shows.

Did the June 2025 Changes Affect Existing Agreements?

The changes that commenced on 10 June 2025 did not rewrite existing financial agreements, but they changed the background against which any challenge will now be judged.

The Attorney-General’s Department confirms that the June 2025 family law changes allow a court to consider “the effect of family violence to which one party has subjected or exposed the other party, on the ability of a party to make financial or non-financial contributions”, and “the need of either party to provide appropriate housing” for a child under 18.

The same reforms put the duty of disclosure into the Act itself and added the economic effect of family violence to spousal maintenance decisions.

That statutory disclosure duty applies to people preparing for or involved in property or financial proceedings, so it does not create a separate disclosure code for couples signing a BFA in a lawyer’s office.

Section 90K itself was not rewritten. What can change is the counterfactual, because the hardship comparison depends on what a court would order if the agreement were set aside, and that calculation now runs through the new property framework.

Where the likely court outcome shifts, the gap between that outcome and the agreement can widen, which is why an agreement drafted years ago may now sit further from the likely court result than its drafters expected.

Can a BFA Deal With Child Support or Care Arrangements?

No, a binding financial agreement cannot replace the child support system or decide who the children live with.

Child support is governed by separate legislation and is dealt with through a child support assessment, or through a limited or binding child support agreement that has its own requirements and its own legal advice rules.

The two can sit in the same document if the lawyers structure it that way, since a financial agreement may also contain other matters, but the child support part takes effect under the child support legislation rather than as part of the BFA.

Parenting arrangements cannot be contracted away at all, because the court’s focus is the best interests of the child at the time the question arises.

The work a BFA does in its own right is on property, financial resources and spousal maintenance between the two adults.

Where children are the reason one partner is leaving work, the property and maintenance side of the agreement carries all of the weight, which is another reason it needs to be drafted with care.

When Should You Review an Existing Agreement?

An existing agreement should be reviewed whenever the working arrangement inside the household changes in a lasting way.

The events that most often justify a review are:

• The birth or adoption of a first child, or of another child
• One partner leaving paid work, or dropping below full-time hours for more than a short period
• A diagnosis or disability that creates ongoing care responsibilities for a child
• A relocation, including overseas, that ends one partner’s employment
• A large change in either person’s assets, business value or superannuation
• A return to work at reduced hours or reduced pay after a long absence

Reviewing an agreement does not always mean the agreement has to go.

It does mean any change has to be made properly, because a financial agreement cannot be amended by adding a note or swapping a page.

Section 90J allows termination only through a termination agreement, or through a new financial agreement that includes a provision terminating the old one, and both routes carry the same independent legal advice requirements as the original.

Doing that once, at the right moment, still costs far less than defending an out-of-date document in a courtroom.

What Should the Higher-Earning Partner Do?

The higher-earning partner should treat fairness as a risk management measure rather than a concession.

The more the carer is left with nothing, the wider the gap a court has to look at when it tests hardship, and the more reason the other person has to challenge the agreement in the first place.

Full disclosure, unhurried timing, genuinely independent advice for the other party and a structure that recognises the caring years all work in the same direction.

They make the agreement more likely to survive and cheaper to rely on. An agreement that quarantines a business worth several million dollars is only useful if it stands up when it is finally tested.

Need Help With a BFA When One Partner Will Be at Home?

A binding financial agreement can work well for a family where one partner stays home with the children, provided it is drafted for that reality rather than around it, with review clauses, a workable maintenance position and a fair account of the caring years.

As binding financial agreement lawyers in Australia, my law firm can prepare or review an agreement that deals properly with a career break, explain what each option means for both of you, and do it at a transparent fixed fee.

Contact my law firm today by calling 1300-529-888.

Frequently Asked Questions

Can a BFA be set aside because one partner became a stay-at-home parent?

It can, but not automatically. Section 90K(1)(d) of the Family Law Act requires a material change in circumstances relating to a child of the marriage, and hardship to the child or the party with caring responsibility. The court compares the carer’s position under the agreement against their likely position if it were set aside, so both elements must be proved.

Can a binding financial agreement waive spousal maintenance for a stay-at-home parent?

It can, but section 90F says no provision limits a court’s power to order maintenance where, when the agreement came into effect, that party could not support themselves without an income tested pension or benefit. In Ellerton & Jennings, the agreement came into effect at separation, so a waiver signed while both partners worked can later stop protecting the payer.

What should a prenup include if one partner plans to stop working?

It should include a review clause tied to the birth of a child or a drop in working hours, entitlements that step up as the relationship lengthens, a superannuation splitting or contribution arrangement covering the caring years, and a realistic maintenance position. Leaving the family home and joint savings outside the agreement also makes it far more durable.

Does having a baby cancel a binding financial agreement in Australia?

No. The arrival of a child does not cancel or invalidate a financial agreement. It creates a possible ground to apply to set the agreement aside under section 90K(1)(d), or section 90UM for de facto couples outside Western Australia, but only where the change causes hardship and the court exercises its discretion. Many agreements survive the birth of children.

Can a BFA decide child support if one parent stays home?

Not in its own right. Child support is dealt with under separate child support legislation through an assessment or a child support agreement, which can sit in the same document but takes effect under that legislation. Parenting arrangements cannot be contracted away at all. As a BFA, the agreement covers property, financial resources and spousal maintenance between the two adults.

How often should a couple review a BFA after a career break?

Review the agreement whenever the household’s working arrangement changes in a lasting way, such as a first child, a move to part-time hours, a relocation that ends one partner’s job, or a diagnosis creating ongoing care needs. A financial agreement cannot be informally amended, so changes are made through a termination agreement or a fresh agreement.