As family lawyers, we are often asked the question ‘is my ex entitled to my superannuation’ or ‘do I have to split my superannuation with my ex?’
In this article, we will discuss the ins and outs of super splits.
Divorce and superannuation: What can you do?
If you are seeking a superannuation split as part of your property settlement, evidence of the value of each parties’ superannuation entitlements must be provided to the Court.
Under superannuation splitting laws, you or your ex-partner can apply to a superannuation fund for information (including a valuation) about the superannuation interest if you require that information:
to properly negotiate a superannuation agreement, or
in connection with family law proceedings in which the superannuation interest is likely to be considered.
This can be a useful tool to those attempting to negotiate an agreement with their ex where their ex refuses to provide evidence of their superannuation entitlements.
Your application also needs to be accompanied by any fees that the fund charges for providing the information.
Under the superannuation splitting laws, if the trustee receives an application that complies with the requirements, they must provide the information that is specified in the superannuation splitting laws.
Is your ex entitled to your superannuation?
Superannuation is treated as property capable of being divided for the purpose of a property settlement. It is considered a different species of property as it is held on trust for the member by the Trustee of the super fund. Whether, in fact, it will be split depends on the circumstances of the case.
Superannuation will not necessarily be split 50/50. The Court will decide the appropriate percentage division of superannuation based on what is “just and equitable.”
Relevant factors that may go towards whether superannuation should be split include:
whether there are children of the relationship
the relationship between years of fund membership and cohabitation
actual contributions made by the fund member at the time the parties started living together, if applicable
preserved and non-preserved resignation entitlements a separation and the date of the hearing
any factors unique to the fund or to the spouse’s present and/or future entitlements under the fund.
Ways to divide your superannuation post separation.
Superannuation can be split following the breakdown of a marriage or de facto relationship under the Family Law Act 1975.
After separation, superannuation entitlements can be ‘split’ the following ways:
By agreement pursuant to a Binding Financial Agreement
By agreement pursuant to Consent Orders filed with the Court. Neither party has to attend Court for orders to be made
If you cannot agree, by way of a Court Order as determined by a Judge.
We recommend you seek legal advice for assistance in drafting the Agreement or Consent Orders where there is to be a superannuation split.
Your solicitor will provide a copy of the proposed Orders to the Trustee of the parties’ superannuation fund whose entitlement will be split, to ensure there is no objection or impediment to the Trustee implementing the Orders once they are made by a Court. This is called providing “procedural fairness.”
How does superannuation get split in a divorce?
After a Court order is made or a Superannuation Agreement executed, a certified copy of the orders or agreement should be served upon the Trustee of the super fund. The Trustee has four business days to implement the split.
The Trustee of the member’s superannuation fund is directed to divide and transfer a portion of the member’s entitlement to an account in your ex partner’s name or to the super fund of your ex-partner’s choice, who is then free to deal with their remaining superannuation entitlements in accordance with their own fund requirements.
If I split my superannuation with my ex, will they get the cash immediately?
The non-member spouse who receives the super split will only be able to access the benefit of their super split upon meeting a condition of release ie. reaching retirement age or satisfying financial hardship withdrawal requirements.
What happens if you have a Self Managed Super Fund (SMSF)?
If you are trustee of a Self Managed Super Fund and your relationship breaks down, you still have the same responsibilities as a trustee and must continue to abide by super and tax laws.
If you and/or your spouse are a member of a SMSF, there are a range of options available to implement a split depending on the nature of assets held by the fund. You might consider dividing the assets held by the fund and rolling out respective member accounts or selling the assets held by the fund and splitting the proceeds (noting there may be Capital Gains Tax implications).
If you have an SMSF, it’s advisable to seek legal and financial advice. Please don’t hesitate to contact our Family Law Team.