When a marriage or de facto relationship breaks down, property can be divided between the parties. Superannuation is treated as property under the Family Law Act and as such can be adjusted, transferred or divided between parties as a part of their property settlement.
Superannuation splitting law treats superannuation as a different type of property. It lets separating couples value their superannuation and split superannuation payments. Splitting does not convert superannuation into a cash asset – it is still subject to superannuation laws.
Superannuation is taken into account in the overall property settlement, and even though it is different, it is subject to the same principles that apply generally:
- All superannuation is taken into account, irrespective of when it was acquired (before or during marriage or after separation).
- It is not automatically subject to a 50/50 split. The Court will have regard to the contributions of the parties and their “future needs” factors when determining the division of property.
- The court will decide based on what is “just and equitable”.
How is superannuation different?
Superannuation is different from other types of property because it is an asset that is held on trust. The trustee of a superannuation fund controls the assets of the superannuation fund and therefore the process to transfer, divide or adjust superannuation is slightly different to the process adopted for assets such as bank accounts, cars or real estate.
Separating couples may either:
- enter into a formal written agreement to split superannuation; or
- seek consent orders to split superannuation; or
- if you cannot reach an agreement, seek a court order to split superannuation.
If you are seeking court orders about superannuation, you must inform the superannuation fund trustee about the orders you are seeking. The trustee must have an opportunity to object to the orders sought, or request any necessary changes This is called providing the trustee with “procedural fairness”.