Let’s face it, superannuation is likely to be one of your largest financial assets alongside your home. Yet it may be overlooked during divorce proceedings.
Understandably, most couples don’t plan for divorce, but if it happens to you, it’s important that you and your former partner have fair and equitable rights to splitting assets equally.
Superannuation should be considered in the asset evaluation. Ignoring superannuation can have serious financial disadvantages in the long term.
A law passed by the Federal Government back in September 2021, granted greater transparency and visibility of superannuation assets in family law proceedings. The law allows a party to apply to the Family Court registry to request superannuation information about their former partner from the Australian Taxation Office (ATO). The ATO will then release the superannuation information to the Family Court registry for use by the parties and their lawyers in the proceedings.
The change was designed to create greater fairness for couples dividing their assets in a just and equitable way. It reduces the time, cost and complexity of parties seeking information about their former partner’s superannuation.
How is super split in divorce?
Super is treated a little differently in divorce proceedings, compared with other financial assets. This is because it is held in a super trust and is typically not accessed until you are 65 years old.
While the super pool held by two parties is considered joint property, it does not mean that each party will walk away with a 50/50 split.
The Family Court will typically consider what is fair and equitable for both partners.
Things that they will consider include:
- What you brought into the marriage
- What you contributed during the marriage
- The capacity after the marriage
- Any care or commitments to children or dependants
Contributions made by stay-at-home parents who may have not worked for some years are recognised by the court.
Things you need to do when splitting super
Request information about the super accounts
Before you can work out how to split the super pool, both you and your former partner need to find out how much super is available. This could be from the ATO under the new law or the trustee of a super fund. The information provided by the ATO will help you to identify which trustees to approach for up-to-date information.
Decide how you will split the super benefits
There are several options for splitting super between you and your former partner, including:
- Prepare a written agreement with the help of a lawyer. The agreement must be accompanied by a signed certificate, stating both you and your former partner have obtained independent legal advice about the agreement; or
- If you and your former partner have reached an agreement from the outset, you can file an application for consent orders in the Family Court, together with a consent order recording the agreement; or
- If you can’t reach an agreement with your former partner, you’ll need to file an application with the Court for a court order. Registry staff can tell you what you need to do.
