How could this happen?
Joyce was one of seven politicians embroiled in a crisis after falling foul of a previously obscure constitutional rule that bars dual citizens from sitting in parliament.
Based on the constitution's section 44, the High Court on Friday ruled him and four other senators inelegible to serve in parliament.
"The constitution was written in the 1890s when people had very different concerns," Rosalind Dixon, a professor of law at the University of New South Wales, told RFI. "The concern then was allegiance to a very new country to make sure that people elected were loyal to the new country rather than to European powers. It made sense in the 1890s."
What does this mean for the government?
The court move reintroduced uncertainty into a political landscape that has been turbulent in recent years, with four different prime ministers serving since 2013.
Given that Joyce was the only member of the lower house to be fond ineligible, it means there will now be a by-election for his seat of New England.
This also means that Prime Minister Malcom Turnbull right-wing government has lost its majority in parliament.
"This would have been embarrassing in the best of times but the government is probably not going to fall," Paul Williams, a Senior Lecturer at Griffith University, told RFI. "It's probably not as dramatic as some people say. There are a few independent, or what we call cross-bench minor party members, who could support Macolm Turnbull's government. In terms of getting legislation through, it mlight prove difficult."
Joyce's role in government will remain vacant until the by-election and if he loses it, the coalition could keep ruling as a minority government.
Could this rule be changed ?
It might prove complicated to do so according to Paul Williams.
"It can only be changed by the people at a referendum," he points out. "The constitution is really difficult to change. Having said that, Turnbull has said he would like to do something about that."
Joyce, who discovered that he automatically acquired New Zealand nationality through his father, has said he will renounce it.
That will allow him to stand in the by-election.
What do Australians think of the situation?
Critics say the constitution is out of step with the modern reality of the country. Fifity percent of the Australian population are either foreign-born or the children of immigrants.
The question touches on the current debate in Australia on multiculturalism, explains Rosalind Dixon. "I have a daughter who is a dual citizen and horrified by the idea that she would have to renounce her citizenship if she was interested by public office. But I think there's also a sense among some people that leaders are not taking seriously the obligation to be careful and they see this as yet another example that the leadership needs to be more careful."
Prime Minister Turnbull said he was referring the ruling to a parliamentary committee to consider whether there should be constitutional changes to reduce the risk of future breaches.