Superannuation and Superannuation Splitting
When separated couples divide their property, superannuation is relevant. In most cases, superannuation is treated as part of the property pool. The superannuation entitlements of one party may be split, not necessarily equally, so that the party with less superannuation has some extra. It was a policy decision of the Federal Government to allow the courts to do this to increase the funds available in retirement to lower income earners.
Even if a splitting order is not made, the superannuation entitlements of both parties will still be relevant.
Superannuation issues can be complex, particularly when defined benefit funds or self-managed superannuation funds (SMSFs) are involved.
At a glance
- Superannuation is commonly part of the property pool.
- Splits are not automatically 50/50.
- Defined benefit funds and SMSFs often need extra care.
- Valuation and tax issues can affect the outcome.
Our expertise and approach
We have expertise in giving advice and negotiating a fair division of superannuation. We take particular care to ensure that all of the complexities associated with superannuation are taken into account, including valuation issues and tax consequences.
We look at the nature, form and characteristics of each superannuation entitlement and provide advice regarding the specific circumstances.
We understand the complexities of superannuation law and consult with taxation lawyers, accountants and financial planners when necessary.
We are conscious of problems arising due to:
- Business assets or other lumpy assets in SMSFs.
- Non-compliant SMSFs.
- Timing issues with SMSFs.
- Ages of parties and their eligibility for superannuation.
- Comparing and resolving different values of superannuation in members’ statements compared to family law values.
- The transfer balance cap.
- Binding death benefit nominations.
- Superannuation pensions.
- Financial agreements including pre-nuptial agreements.
FAQs
Is superannuation always split 50/50?
No. It commonly is split 50/50 but circumstances where it may not include:
- A party came into the relationship with superannuation and has records of the initial amount.
- The relationship was very short.
- One party has a defined benefit interest or there is a large asset, such as a commercial property in a self-managed superannuation fund, and there is sufficient non-superannuation property to adjust so that a just and equitable settlement is still received by both parties.
Do I need a valuation of my superannuation?
If your superannuation is in an accumulation fund, such as a retail or union fund, for example Australian Super, REST Super or Vanguard, you can access an up-to-date valuation from the website.
More steps may need to be taken if you have a defined benefit interest or self-managed superannuation fund.
We can advise you about this or refer you to an expert to value your superannuation if that is required.
My wife has an interest in an overseas superannuation fund. Is this relevant?
It can be relevant in a property settlement resolved by an Australian court, but the Australian Court will not consider the overseas superannuation fund to be property. The Australian court cannot divide it.
The options are:
- Have it taken into account in the Australian court proceedings as a financial resource. It will likely not be given as much weight as Australian superannuation or non-superannuation property.
- Apply in the overseas country for a split of the superannuation, if you are entitled to do so. There may be residence or other requirements. Some countries have procedures for this. For example, in the United States of America an application can be made for a Qualified Domestic Relations Order (QDRO). We can refer you to a lawyer who can assist with this.
Most of our property is overseas. Can an overseas court make an order dealing with Australian superannuation?
No. You still need to apply for either a court order in Australia or enter into a superannuation agreement under Australian law. We can advise you which approach is most suitable for you.
I have an overseas order dealing with all our property. The order says that my husband’s Australian superannuation should be divided equally. Will his fund comply?
No. You will need to obtain an Australian court order or a superannuation agreement. We can advise you which will be the most appropriate action to take and assist you to do this.
My husband has superannuation but he won’t tell me how much he has. Is there any way I can find out?
If you know the name of the fund you can complete a Superannuation Information Form and the fund will tell you. The fund cannot tell your husband that you asked for the information.
If you do not know the name of the fund, but there are property settlement proceedings on foot there is a procedure for the court to obtain the information from the Australian Taxation Office. We can assist you with both processes.