Treatment for superannuation after divorce
Superannuation also known as super, is the portion of money put aside to be withdrawn at your retirement age. This is a form of a retirement benefit. Australian superannuation law allows separating couples to split thier superannuation according to various splitting options. Superannuation is given due consideration when resolving property and financial disputes pursuant to separation or divorce.
What is superannuation in Australia?
When resolving your property issues pursuant to a divorce, you should know how your superannuation would be treated. You and your ex-partner can either obtain a court order or enter into a mutual agreement commonly termed as a superannuation agreement or a financial agreement including a superannuation interest, stating how superannuation of both the parties would be treated in the event of separation.
Can you bring a claim against your ex-partner's superannuation?
Yes, if you have been married or was in a de facto relationship, you can bring a claim for your ex-partner’s superannuation.
You should be aware that it is impractical and not cost-effective to split superannuation of very little value. Superannuation interests with a withdrawal benefit of less than $5000 and those paying a non-commutable pension or an annuity of less than $2000 per annum, have been prescribed as unsplittable interests under the FL Super Regulations.
From 1 April 2022, parties to family law property proceedings can apply to the Federal Circuit and Family Court of Australia or the Family Court of Western Australia to request their former partner's superannuation information, held by the Australian Taxation Office. Parties can then use this information to seek up-to-date superannuation information from their former partner's superannuation fund.
What happens if your partner's pre-marital superannuation is higher than yours?
Generally, pre-marital property is considered as your own property, and you are given the right to retain those property as your own. One party will be able to claim an interest over the other party’s pre-marital assets depending on certain factors such as:
- the length of the relationship.
- earning capacity of the other party.
- the age and the number of children under one's care.
Superannuation might be given the same treatment in the event of the breakdown of the relationship.
If you are the member of the superannuation plan, the spouse of the member or the person who intends to enter into superannuation agreement with the member, you can request information about the superannuation fund using the Superannuation Information Kit.
Key takeaways!
- You could either enter into a superannuation agreement or obtain a court order addressing superannuation after separation.
- You could apply to Federal Circuit and Family Court of Australia to request your former partner's superannuation information.
- Factors such as length of the marriage, age and earning capacity of the parties, number of dependent children would be given due consideration in bringing a claim against your ex-partner's pre-marital superannuation.
- Make your superannuation Trustee on how your superannuation would be treated pursuant to your separation.
Can superannuation be settled over an agreement?
- Yes, a superannuation Agreement is very similar to a financial agreement in which couples can agree about how property is to be divided following a relationship breakdown.
- Parties have the option of entering into financial agreement pursuant to separation/divorce and having a separate part on the financial agreement with the superannuation interest.
- The part with the superannuation interest would be treated as the superannuation agreement giving effect to section 90XH or 90XHA of the Family law Act 1975.
Superannuation agreements are binding, and the trustee of a superannuation fund is required by law to implement it; and the court is not able to interfere and to make an order about the superannuation that is dealt in a superannuation Agreement.
Superannuation agreement checklist
- Satisfy the full and frank disclosure requirement by disclosing the superannuation fund of each party.
- Decide how to split the superannuation fund
- Obtain Independent Legal Advice
Going to court over superannuation?
If you and your ex-partner cannot agree on how to split the superannuation, either party can initiate an application in Courts. If there is an ongoing property settlement matter in courts, you can make the superannuation split part of the ongoing property settlement.
However, best endeavours must be taken to solve the dispute out of courts through mediation or by entering into an agreement.
It is your choice to either include superannuation in the non-superannuation pool or to consider it as a separate pool.
Factors such as availability of children, whether one party has little or no superannuation, age of the parties, primary carer of the children are few factors considered when determining a superannuation order.
How can MJ Legal assist you?
- Assist you in negotiating with your ex-partner on mutual agreement for superannuation split.
- Exchange correspondence with your superannuation Trustee in relation to your superannuation arrangements.
- Advice you on the available superannuation splittable methods.
- Draft your superannuation agreement.
- Assist you in applying for a superannuation order with the court and providing you with robust legal representation.
Have your superannuation split decided pursuant to separation or divorce to avoid future complexities.
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