Superannuation & Family Law
How is Superannuation treated in Family Law
Under the Family Law Act 1975 superannuation is treated as property, although it is treated as a different type of property to other property assets and interests.
When there is a separation of a marriage or de facto relationship, superannuation splitting laws allows superannuation to be divided. This can be a very important part of a property settlement, as superannuation is becoming an increasingly substantial asset for Australian couples.
It may not seem important to you now and can often be overlooked, but a change to your superannuation interest now can make a significant impact on your financial position once retirement age is reached.
It is very important that you get the assistance of an expert family lawyer when there are superannuation interests involved. You can not divide superannuation by an informal agreement. Superannuation can only be split following separation by Court Order or a Superannuation Agreement which can form part of a Binding Financial Agreement.
What is a Superannuation Split
A superannuation split is when a portion of one persons superannuation is ‘split’ or transferred to another persons superannuation. When superannuation is split, it is not converted to cash – it remains as superannuation but transfers to the other persons superannuation fund. You will be bound by the rules of your superannuation fund in relation to access to your superfund.
Generally your superannuation wont be accessible until you reach retirement age except in very limited circumstances. For example if you are eligible to access a portion early in accordance with superannuation laws on compassionate, medical or severe financial hardship grounds
Valuing Superannuation
Understanding the nature and value of the superannuation interest is important when determining how to divide super. In some cases it isn’t as straightforward as looking at the most recent superannuation statement to establish its value. For example, a member of a defined benefit fund may be entitled to a lump sum, a lifetime pension or both and the value is impossible to obtain by consideration of a statement alone. The assistance of an expert may be required to assist in determining the nature and value of the superfund and make an informed decision as to how best to deal with the interest.
How much Superannuation am I entitled to?
There is no hard and fast rule in terms of dividing superannuation following separation. There is no automatic right or default 50/50 position. The Court will ultimately decide if and how much superannuation to split based on what is just and equitable. As always in family law, your entitlements depend on the particular facts and circumstances of your case.
Some factors that may be considered when determining if a superannuation split should occur and how much:
The length of the relationship;
The current balance of both parties superannuation interests;
The balance of the parties superannuation interests at the commencement of the relationship;
If one party was not in the same position to accumulate superannuation as the other party, due to being the primary carer of children and/or primary homemaker;
What other assets are available to divide, e.g. If the property pool is small and the superannuation makes up a considerable portion of the assets;
Differences in income and earning capacity.
The Court will not generally consider it to be just and equitable if one party ends up with majority of the cash assets whilst the other retains majority of the superannuation assets. This is because cash assets can be utilitsed by the party immediately, whilst superannuation is not generally accessible until you reach retirement age and you meet the conditions of your super fund for release.
What if my ex won’t disclose their Superannuation?
There are obligations on both parties in family law matters to provide full and frank financial disclosure which includes disclosure regarding superannuation interests. If your former partner is not compliant with their obligations, there are steps that we can take to obtain the necessary information regarding their superannuation.
If you are aware of the superfund in which your ex-partner has an interest, you are entitled to apply for superannuation information from the super fund directly by providing a declaration and completing the necessary forms. You do not need your ex partner’s consent or permission, you are eligible to apply for this information if you are the spouse of the member.
If Court proceedings are on foot and you are not sure which fund/s your ex-partner has interests in, you are able to request information directly from the ATO. This information is provided via the Court.
Self-Managed Superannuation Funds
If you are a member of a self-managed superannuation fund, the same options are available in terms of superannuation splitting. Matters involving self-managed superannuation funds tend to be more complex and they may require the assistance of an expert to value them such as a suitably qualified accountant. They also may involve the liquidation of assets such as the sale of property to be able to split the superannuation interest and transfer or rollover interests.
It is also imperative that you understand the current position of the self-managed super fund and that it is compliant with its obligations. You should also consider tax obligations if assets of the self managed superannuation fund are being sold. We often work with accountants and tax specialists to ensure a strategy is developed to minimise tax implications and liabilities and ensure the best possible solution in your circumstances is achieved.
Our team is lead by an Accredited Specialist in Family Law, Ashleigh Wisbey. Our empathetic and compassionate approach ensures you're not just another case but a valued client deserving personalised attention. Our intricate understanding and expertise in asset division, including superannuation, guarantees that you are well informed and confident in your financial decisions. Not only are we experts in all things family law, we are personable in our approach.
If you're looking for a comprehensive solution to your asset and financial division needs, your search ends with Seacliff Family Law. We're with you every step of the way.
We are here to help
Testimonials
