Superannuation is often one of the most significant assets in a financial settlement following the breakdown of a marriage or de facto relationship. While it is considered a form of property under family law, superannuation has unique characteristics that set it apart from other assets. This article outlines key considerations when dealing with superannuation in family law matters.
Superannuation Splitting: The Basics
The superannuation splitting law allows separating couples to divide superannuation entitlements. However, splitting superannuation does not convert it into cash—funds remain subject to superannuation laws, including preservation until retirement age.
While superannuation splitting is an option, it is not mandatory. Parties can negotiate how to divide assets, including whether to split superannuation or offset it against other property.
Options for Splitting Superannuation
Separating couples have three main options for superannuation splitting:
- Formal Written Agreement
- Both parties must obtain independent legal advice.
- The agreement must be in writing, signed, and include a certificate confirming that each party received legal advice.
- Once signed, the agreement does not require court approval.
- Consent Orders
- If both parties agree on a division of superannuation, they can apply for consent orders in the Federal Circuit and Family Court of Australia.
- The orders are reviewed and approved by the Court without requiring a hearing.
- Court Orders
- If parties cannot reach an agreement, the Court can determine how superannuation should be split.
- Proceedings can settle at any stage, even after filing an application.
Legal advice is crucial when considering these options to ensure compliance with the law and to safeguard entitlements.
Steps to Splitting Superannuation
Step 1: Obtain Superannuation Valuation
Before superannuation can be split, it must be valued. The process includes:
- Completing a Form 6 Declaration (to confirm eligibility to receive superannuation information).
- Submitting a Superannuation Information Request Form to the superannuation fund trustee.
- Paying any applicable fees to obtain valuation details.
Some superannuation interests, such as self-managed super funds (SMSFs), may require expert valuation from an accountant or financial expert.
If a party is unsure of their former partner’s superannuation funds, and proceedings for financial settlement are ongoing, they can request information directly from the Australian Taxation Office (ATO) via the Commonwealth Courts Portal.
Step 2: Decide the Method of Splitting
Once valuation details are obtained, parties must choose how to divide superannuation—through a formal agreement, consent orders, or court orders.
Step 3: Notify the Superannuation Fund
If seeking court orders for superannuation splitting, the superannuation fund trustee must be notified. This ensures procedural fairness and allows the trustee to object if necessary.
Key points regarding trustee notification:
- A sealed copy of the application must be served on the trustee.
- The trustee must be informed at least 28 days before the trial of the terms of the order being sought.
- Once an order is made, a sealed copy must be provided to the trustee to implement the division.
Legal Considerations and Professional Advice
Navigating superannuation splitting can be complex. Engaging a family lawyer ensures that parties understand their legal rights and obligations. Lawyers can also assist in negotiating settlements, minimising the need for court proceedings.
Our family law team is available to assist with any superannuation splitting matters that may impact your family law case. Please contact our office at 03 9311 8911 to schedule a consultation.
