What happens to my superannuation?

When couples separate and divide their property under a family law property settlement they also have to consider each other’s superannuation interests. 

Since 2002, under the Family Law Act 1975, superannuation is classed as property, but it is treated differently to other property such as money, houses or cars.  Couples are able to split their superannuation and transfer part of it to their spouse as part of a property settlement. Just how much superannuation each party should receive under a family law property settlement is determined by following the four step property settlement process which is explained below.   

It should be remembered that in any property settlement, superannuation is not converted into cash.  It remains superannuation which can only be accessed at retirement or in limited circumstances such as hardship.

You are able to find out the value of your spouse’s superannuation by signing a Declaration and requesting the information from the spouse’s superannuation trustee.  Some superannuation funds charge fees for the preparation and release of this information.

When superannuation is split, part of a spouse’s superannuation interest is transferred to another superannuation fund and an account opened in the name of the other spouse.  Superannuation amounts of under $5,000 or less cannot be split.

Superannuation can be split in one of three ways:-

1. By private formal agreement, known as a Superannuation Agreement.  Superannuation Agreements are not registered with the Court and require certificates of legal advice amongst other conditions in order to be valid.  Superannuation Agreements are complex and should only be drawn up with the advice of a solicitor.
2. By Consent (or agreed) Order filed with the Court after the parties have settled on how much superannuation each should receive as part of a family law property settlement.
3. By Order of the Court. This occurs when the parties cannot agree on a superannuation split and the Court, after a trial or hearing, decides how much superannuation each party will receive as part of a property settlement.

Before Consent Orders are filed with the Court, the consent of the Superannuation Trustee must be obtained. The Superannuation Trustee must be provided with the proposed Orders at least 28 days before the Orders are lodged with the Court.

Consent Orders filed with the Court, like Superannuation Agreements, are complex and have to comply with strict legislative requirements.  If these requirements are not complied with, the Superannuation Trustee or the Court Registry will reject the Consent Orders, causing the parties to incur legal costs to fix the problem. 

You should  consult with a solicitor to draw up your superannuation splitting order, or superannuation agreement so that you avoid any difficulties or delay as a result of not complying with legislation.