When a marriage or de facto relationship breaks down, property can be divided between the parties. Superannuation is treated as property under the Family Law Act and as such can be adjusted, transferred or divided between parties as a part of their property settlement.
Superannuation splitting law treats superannuation as a different type of property. It lets separating couples value their superannuation and split superannuation payments, although this is not mandatory. Splitting does not convert superannuation into a cash asset – it is still subject to superannuation laws (i.e. it is usually not available until retirement age).
Superannuation is taken into account in the overall property settlement, and even though it is different, it is subject to the same principles that apply generally:
- All superannuation is taken into account, irrespective of when it was acquired (before or during marriage or after separation)
- It is not automatically subject to a 50:50 split. The Court will have regard to the contributions of the parties and their “future needs” factors when determining the division of property
- The court will decide based on what is “just and equitable” and each case is unique
How is superannuation different?
Superannuation is different from other types of property because it is an asset that is held on trust.
The trustee of a superannuation fund controls the assets of the superannuation fund and therefore the process to transfer, divide or adjust superannuation is slightly different to the process adopted for assets such as bank accounts, cars or real estate.
Options for splitting superannuation
Separating couples may either:
- enter into a formal written agreement to split superannuation; or
- seek consent orders to split superannuation; or
- if you cannot reach an agreement, seek a court order to split superannuation.
If you are seeking court orders about superannuation, you must inform the superannuation fund trustee about the orders you are seeking. The trustee must have an opportunity to object to the orders sought, or request any necessary changes This is called providing the trustee with “procedural fairness”.
The effect of splitting superannuation
A splitting agreement or order may permit the creation of a new interest for the non-member spouse or a transfer or roll-over of benefits for the non-member spouse to another fund of their choice.
What you need to do to split superannuation
Although the superannuation splitting laws do not require you to value the superannuation interest before making a payment splitting agreement this would still be a sensible thing to do.
You can get information about the value of the superannuation interest, or information that will enable you or the court to calculate its value. Along with other information that might be of assistance when you are considering what might be done with the superannuation interest.
Documents which will help you obtain this information are available in a Superannuation Information Kit at your nearest family law registry, or from the Family Court of Australia website.
For more information, please call Nolan Lawyers on (02) 8014 5885 or email your enquiry to firstname.lastname@example.org