Despite boosting national legal aid funding by $92.3 million in the 2010/2011 Budget, the Federal Government has cut funding for Australia's Family Relationship Centres by $44 million and announced the application of a means test for the previously free mediation services.

"While we welcome the Federal Government's budget increase for legal aid, we encourage it to find an alternative to cutting funding for mediation services to fund legal aid. It should not be either legal aid funding or mediation. Both are important services for separating couples," said president of the Law Institute of Victoria (LIV), Steven Stevens.

From 1 July 2011 the first hour of mediation will be free. However, those earning more than $50,000 a year will pay $30 per hour for the second and third hours of mediation. According to Attorney-General Robert McClelland, up to one third of Family Relationship Centre clients are expected to be affected by the new rules.

Stevens said it was shortsighted of the Federal Government to means test mediation services. "This would seem to be a tight-fisted provision when families in dispute are generally obliged to try mediation before commencing proceedings in the Family Court," he said.

According to LIV, as well as the risk of clients staying away, the principle of resolving relationship breakdown at the "front end" of the legal process through mediation instead of a court appearance would be greatly watered down.

"We believe these mediation sessions are useful for separating couples and can help resolve issues at an early stage," Stevens said, adding that not all relationship problems would be suitable for mediation, such as those involving allegations of domestic violence of family abuse.

"Some disputes will only be resolved after legal advice has been received and a small percentage will always need to proceed to a court hearing," he explained.