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What Happens To Superannuation After A Separation?

Farrell Family Lawyers have extensive experience advising clients in a wide range of superannuation matters, including complex matters involving self-managed and defined benefit funds.

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3 March 2020

By: Mimi Oorloff

What are the superannuation splitting laws?

The superannuation splitting laws allow separating couples to value and divide their superannuation after a relationship break down.

Under the laws, one partner may split the amount remaining in their superannuation fund and make a payment to the other partner’s superannuation fund after separation.

The Family Law Act treats superannuation as if it were property, although it is different from other types of property as it is held in trust. Splitting superannuation does not convert it into a cash asset, the super funds are still subject to superannuation laws and the usual conditions of release.


Am I entitled to a superannuation split? Or do I have to pay super to my ex-partner?

You may be entitled to a superannuation split, or legally obligated to split your superannuation if you were married or in a de facto relationship and have now separated. Under the Family Law Act, a person is in a “de facto relationship” with another person if they are not legally married to each other, not related by family and they share a relationship as a “couple living together on a genuine domestic basis”. A party seeking superannuation orders must have been in a de facto relationship with the other party for at least 2 years unless there is a child or children of the relationship. If there is a child of the relationship, or a party makes a substantial contribution, the 2-year rule does not apply and an application can be made seeking superannuation orders even if the relationship broke down before two years.

How much of my ex-partner’s superannuation am I entitled to? How much superannuation might I have to pay?

In a long relationship, where neither party had substantial superannuation at the beginning of the relationship, parties will typically calculate a superannuation split which has the effect of equalising their superannuation interests. This involves adding up the value of both parties’ superannuation interests, dividing it by two and splitting one parties’ superannuation interest so as to make a payment to the other party’s fund of choice. The result is that both parties receive an equal amount of superannuation.

However, this is not always the case. Either between themselves or with the assistance of legal representatives, parties may be able to negotiate a superannuation split tailored to their needs which forms part of an overall package of property settlement. For example, one party may seek a greater share of the cash assets in order to purchase a property, while the other party may be approaching retirement and would prefer to retain their super. The party seeking the cash assets may concede their superannuation entitlements in order to negotiate a greater share of the cash assets at settlement.

The Courts have a wide discretion to determine a just and equitable division of the parties’ superannuation interests. Since superannuation is treated as property under the Family Law Act, if the matter were determined by a Court, a four-step process would be applied to determine each parties’ entitlement:

First, the superannuation must be valued;

Secondly, each parties’ financial and non-financial contributions to the acquisition, conservation and improvement of the superannuation fund must be assessed;

Thirdly, the Court will consider for factors under s 75(2) or 90SF(3) of the Family Law Act, including but not limited to:

  • the age and state of health of each party;
  • the income earning capacity of each party;
  • whether there are children of the relationship and with whom they live.
  • the existing financial commitments and responsibilities of each party.

Finally, an evaluation is made as to whether the settlement is just and equitable in all the circumstances.

How long after a separation or divorce can I make a claim for superannuation?

If you were a party to a marriage, you must apply to the court for superannuation orders within 12 months of the date on which your Divorce Order took effect. If you have not obtained a Divorce Order, you can make a claim for superannuation at any time after separation.

If you were a party to a de facto relationship, you must apply to the court for superannuation orders within 2 years of the date of separation from your partner.

After the 12-month or 2-year limitation period, the Court may grant leave to a party to a marriage or de facto relationship to apply for a superannuation order if the party can establish hardship. This can be a very expensive and complicated process, as the party must make a special application to the Court for leave to proceed out of time. There is no guarantee that the court will grant the leave, so it is important for parties to be aware of time limits.

How can I obtain information about the value of my superannuation fund, or my partner’s fund?

You can apply to the trustee of the superannuation fund for information about a superannuation interest of a member if you are an ‘eligible person’ and have a genuine reason for needing the information.

Persons who are eligible to apply for information in relation to a superannuation interest of a member of a fund include:

  • the member
  • the spouse of the member
  • if the member or spouse is deceased, their legal representative
  • a person who intends to enter into a superannuation agreement with the member

In order to apply for information about the member’s superannuation interest, the eligible person will have to declare that they require the information in order to either a) properly negotiate a superannuation agreement, or b) assist them in connection with family law proceedings relating to the superannuation interest. The applicant will also have to provide the member’s full name and date of birth.

What if my ex-partner has a defined benefit super fund or a self-managed fund?

Defined benefit funds provide benefits to members in accordance with a pre-set formula which is specified in the fund’s trust deed. The formula accounts for the member’s length of employment and their salary level at retirement. These funds are difficult to precisely value, and a forensic accountant may need to be engaged to value the superannuation interest.

Self-managed super funds are private funds arranged and managed by the parties themselves, often with the assistance of a lawyer and/or accountant. The parties are responsible for investing the fund monies by purchasing property, shares, bonds and so forth to increase the value of the fund. The value of a self-managed super fund can be ascertained by adding up the value of the assets held by the fund. It might be necessary to engage an accountant to assist with this process.

We have come to an agreement about how to split our superannuation interests. How can we formalise our agreement?

Parties can formalise their agreement regarding the division of superannuation by entering into a Financial Agreement or applying to the Court for Consent Orders.

An Application for Consent Orders, together with a Minute recording the agreement can be filed in the Family Court of Australia. Once approved by a Registrar of the Court, the Orders become legally binding and enforceable on both parties and on the trustee of the superannuation fund.

Alternatively, parties can record their agreement in a Binding Financial Agreement. A Financial Agreement does not need to be filed with the Court. However, in order for the Agreement to become binding and enforceable, each party must be provided with independent legal advice before entering into the agreement. The advice must address the effect of the agreement on the rights of the parties and the advantages and disadvantages of the agreement at the time that the advice was provided. Financial Agreements must be carefully drafted to comply with the requirements of the Family Law Act to ensure that they are binding and enforceable.

How do I split my superannuation?

In order to effect a split of you or your ex-partner’s superannuation, you must first write to the trustee of the superannuation fund and advise them that you are seeking superannuation splitting orders. This is called seeking ‘procedural fairness’. You should provide the member’s number and date of birth to the trustee, as well as details of the specific orders sought.

The trustee will have an opportunity to object to the superannuation orders by writing back to you or attending the court hearing (if any).

One the Court has made the superannuation order, parties’ must provide the Orders to the trustee of the superannuation fund to implement.

What if we cannot agree about how to divide superannuation?

If you and your ex-partner cannot reach agreement about how to divide your superannuation interests, you can apply to the Court for an order. See above for the four-step process the Court will apply to determine a just and equitable division of superannuation.

Seek legal advice

Farrell Family Lawyers have extensive experience advising clients in a wide range of superannuation matters, including complex matters involving self-managed and defined benefit funds. Contact us for advice about your options and entitlements to empower you to make informed decisions.

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