DIVORCE: How do you divide up Superannuation?
For many Australians, Superannuation is one of the most valuable assets they own. Consequently, the right to seek a division of Superannuation and the process by which it is done often becomes a critical part of the asset division following any relationship breakdown. Here are some of the important points to note:
Under Family Law, Superannuation is as fully divisible as any other asset and those rights are available equally to both married and defacto couples alike*. The actual division of Superannuation is commonly referred to as “Superannuation Splitting” and importantly, any money split from the Super Fund of one spouse, must be paid into a fully compliant Super Fund in the name of the other spouse. The money can’t ever be paid out directly to the other spouse as cash.
Each spouse must make full disclosure as to the current balance of their Super Funds and, if a spouse fails to do this, the other spouse has the right to go directly to the Super Fund and get the information from source.
As for working out the actual value of the Superannuation, a good staring place is the 30 June Member Benefit Statements all Super Funds send out each year. There is however no obligation to fix the value as at 30 June and the Super Fund can give an updated value at any time. Backdating the value of the Superannuation to an earlier point in time like the date of separation is possible but actually splitting the Supers on these backdated values without agreement from the other spouse is not. Also, the value which the Super Fund gives on its standard Member Benefit Statements is not always the correct value to be used for Family Law purposes. In some cases, the Family Law Rules require a different calculation to be used. This should always be checked with the Super Fund before a Superannuation Split is finalised.
Splitting the Superannuation is not always mandatory. In appropriate cases each spouse can leave their own Superannuation account intact and instead trade-off the Superannuation Split amount against other assets in the overall property division exercise.
If a Superannuation Split is to occur, it must be contained in documentation that is fully compliant with both the Family Law Act, the rules of the particular Super Fund and the overall governing legislation that regulates the Super Industry. If a mistake is made with any of this paperwork the Superannuation Split will be completely ineffective.
* Although, for defactos the relationship generally must have lasted for at least two years.
Michael Zande is a Queensland Law Society Accredited Family Law Specialist with over 30 years’ experience in the field. He is the principal at Zande Law Solicitors, Suite 7, Norwinn Centre, 15 Discovery Drive, North Lakes. To contact Michael for advice, phone 3385 0999.
The information in this article is merely a guide and is not a full explanation of the law. This firm cannot take responsibility for any action readers take based on this information. When making decisions that could affect your legal rights, please contact us for professional advice.