Family Law: 13 July 2023
Author: Phoebe Smillie - Our People
A common question people have when they come to speak with us, is my superannuation treated as an asset of the relationship or marriage? The simple answer is yes.
Superannuation is treated as property under the Family Law Act 1975 and is an asset available for division or as we say in family law, available to be “split”. However, superannuation is treated a little differently to other types of property because it is held in a trust and does not convert to cash upon settlement.
You may be entitled to a superannuation split if you were married or in a de facto relationship and have now separated.
Generally speaking, in long relationships (usually more than 10 to 15 years in length) where neither party had a significant superannuation interest at the commencement of the relationship, the Court will usually make orders equalising their superannuation interests. Simply put, this means adding the value of both parties’ superannuation interests, dividing it in two, and splitting one parties’ interest so as to make a payment to the other party’s fund of choice. The result is that both parties will retain an equal amount of superannuation.
Notwithstanding the above, superannuation is not always subject to an equal division. Sometimes parties may agree to a different division of superannuation as part of an overall package of property settlement. Depending on people’s ages, their employment status and other individual circumstances, parties’ tend to place varying levels of importance of superannuation.
From 1 April 2022, parties to family law proceedings can apply to the Federal Circuit and Family Court of Australia to request their former partner’s superannuation information, which is held by the ATO. Parties can then use this information to seek up-to-date superannuation information from the superannuation fund. The Application to the Court is a simple form which is submitted through the online Court portal.
The above process makes it harder for parties to hide or under-disclose their superannuation and reduces the time, cost and complexities for parties seeking this information.
Usually, a simple current superannuation statement will be enough to establish the value of a superannuation interest or a party can apply to the trustee of the relevant superannuation through the, “Superannuation Information Kit”.
Sometimes, however, there are different types of superannuation and different valuation methods. For example, self-managed superannuation funds are usually valued with the assistance of an accountant. There are also more complex superannuation policies such as defined benefit policies which require formal valuations. It is important to seek advice when valuing your superannuation interest.
Superannuation can be split either by:
If you are seeking orders about a super split, you must inform the trustee of the relevant superannuation fund of your intention. This process is often referred to as ‘procedural fairness’. The trustee must be given an opportunity to attend any relevant court hearing and/or object to any relevant order. On occasion, the trustee may write back and request a change in the wording but otherwise consenting to the order being made.
After an Order has been made with respect to superannuation splitting, the trustee must be provided with a sealed copy of the final orders so the funds can give effect to the split.
As noted above, splitting superannuation does not immediately convert your superannuation into a cash asset. Superannuation which has been “split” is still subject to superannuation laws and is usually only accessible after retirement age.
Superannuation splitting can be a complicated and confusing process. At Aitken Partners, we have an experienced team of family lawyers who will help you understand the process and assist you with any application to split superannuation.