In the complex area of Superannuation and Family Law, obtaining information about a former spouse or partner’s superannuation assets in family court procedures traditionally required directly contacting the relevant super fund. This procedure also relied greatly on the former spouse or partner being honest and forthcoming about where their retirement funds were held.

Superannuation & Family Law

When a marriage or de facto partnership ends, Property can be divided between the parties, with superannuation splitting being especially crucial because superannuation is often a large asset for one or both parties. The process of splitting property, including super, is a property settlement.

When a relationship ends, superannuation is considered as property under the Family Law Act and can be amended, transferred, or divided between the parties.

Although it should be noted that de facto couples in Western Australia are not subject to the Family Law Act’s superannuation splitting regulations.

Superannuation is factored into the overall property settlement, and while it is unique, it is governed by the same principles that apply to all property settlements:

• All superannuation is considered, regardless of when it was earned (before, during the relationship or after separation).
• It is not subject to a 50/50 split by default. If the court rules that 60 percent of the assets should go to one party and 40 percent to the other, this can also happen with their superannuation.
• The court will make its decision on the basis of what is “fair and equitable.”

What makes Superannuation and Family Law Unique?

Because it is a trust-held asset, superannuation is distinct from other types of property.

Because a superannuation trustee is in charge of the fund’s assets, the method for transferring, dividing, or adjusting superannuation differs differently from the process for transferring, dividing, or adjusting bank accounts, cars, or real estate.

Superannuation Splitting Options

Couples who are divorcing have the option of:

• Enter into a formal written agreement to split superannuation;
• or obtain consent orders to split superannuation;
• or, if you are unable to achieve an agreement, obtain a court order to split superannuation.

A formal written agreement requires both parties to hire a lawyer separately, who must sign a certificate declaring that they received independent legal advice on the arrangement. This document is sometimes called a Binding Financial Agreement.

You won’t have to go to court over the superannuation interest once this agreement is signed. Because the agreement is not filed with the court, you should make sure that each of you keeps a copy.

Even if a court application is filed, an agreement can be reached at any point without the requirement for a court hearing.

The Impact of Superannuation Splitting

Splitting superannuation does not turn it into a cash asset right away; it is still subject to superannuation restrictions and is typically only accessible after retirement.

A splitting agreement or order may allow for the creation of a new interest for the non-member spouse, as well as the transfer or roll-out of benefits to another fund for the non-member spouse.

This means that when a payment from a superannuation interest becomes payable to the member spouse (typically because a condition of release, such as retirement from the workforce, has been completed), a portion of the payment will go to the non-member spouse, and the balance to the member spouse.

The member’s superannuation fund’s Trustee is effectively directed to divide and transfer a portion of the member’s entitlement to their spouse’s super fund, who is then free to deal with their remaining superannuation entitlements according to their own fund’s obligations.

What you must do in order to divide your Superannuation

Although the superannuation splitting laws do not require you to value the superannuation interest before entering into a payment splitting agreement, it is a prudent practice.

The court will require evidence of the value of the superannuation interest if you are seeking a payment splitting order.

If you are obtaining information regarding a superannuation interest to assist you in the negotiation of a superannuation agreement or orders under the Family Law Act in connection to superannuation interests, you can apply to the trustee of a superannuation fund under the superannuation splitting provisions.

You can obtain information regarding the value of the superannuation interest, as well as information that will help you to determine its worth, as well as other data that may be useful when deciding what to do with the superannuation interest.

Documents to assist you in obtaining this information can be found in a Superannuation Information Kit at your local family law registry or on the Family Court of Australia’s website. Some superannuation funds require you to fill out their own form.

A fee may be charged by the superannuation fund for delivering the information, which is paid when the forms are sent.

Putting a value on the Superannuation Fund

The trustee’s information may be sufficient to determine the value of the superannuation interest. However, some superannuation interests, such as defined benefit interests, might be difficult to value, and an expert may be required.

What more should you know?

The majority of superannuation holdings can be divided. However, any interest with a withdrawal benefit of less than $5,000 is normally not splittable because it would be inefficient.

Making a decision regarding how to split a superannuation interest can be deferred or postponed. You can make a flagging agreement or request a flagging order in this circumstance, which prevents the superannuation trustee from releasing or dealing with the superannuation entitlements until a decision is made and the flag is withdrawn.

If you are seeking court orders concerning superannuation, you must inform the trustee of the superannuation fund. The trustee must be given notice of the court hearing so that he or she can oppose to the orders you are seeking. Even before filing consent orders with the court, the trustee must be provided a copy of the draught orders requested at least 28 days before the consent orders are filed, giving the trustee time to evaluate them and, if necessary, object to the orders sought. A trustee may respond with a request for a modification in wording but otherwise agree to the order being made.

It is critical to provide a sealed copy of the superannuation order to the trustee when it is made, whether by consent or after a hearing, so that they can effect the super split.

What are the new Super Laws that have been made?

In the event that the ATO does not have superannuation information for a certain person, a response stating that this is the situation will be supplied.

It is also recommended that you complete the Superannuation Information Request Form, or the Form 6 declaration, and submit it to the superfund once you have received the relevant information from the ATO about the superannuation funds held by your former partner or spouse so that you can be sure that you have a current and up-to-date valuation for all of the superannuation assets in question.

The information provided by the ATO, as with most information gathered for the purpose of family law cases before the FCFCOA, cannot be disseminated to third parties and should only be used for the purposes of the family law proceedings.

What does this signify for those involved in Family Law Matters?

The new measures are expected to increase transparency in family law procedures and result in more equitable and just results before the Court. It could also save parties time and money that would otherwise be spent chasing assets.

Important 2024 Update: New Changes to Superannuation in Family Law

In a significant move to modernize Australia’s family law system, the Attorney-General’s Department has released the Family Law (Superannuation) Regulations 2024 consultation paper. These proposed changes aim to make superannuation splitting more efficient and fair for separating couples. Here are the key updates you need to know:

What’s Changing?

1. Modernized Valuation Methods

• Updated calculations reflecting current economic conditions
• New approaches for valuing complex pension products
• Revised interest rate methodologies for more accurate assessments

2. Better Handling of Modern Super Products

• Clear framework for innovative retirement income stream products
• Updated rules for newer types of superannuation interests
• More flexible splitting arrangements to match today’s super options

3. Improved Information Access

• Streamlined processes for obtaining super information
• Clearer guidelines for trustees providing information
• Enhanced protection of sensitive personal details

4. Special Considerations Added

• New provisions for terminal medical conditions
• Updated approach for temporary incapacity payments
• Recognition of various gender identities in super arrangements

Practical Impact for Separating Couples

These changes mean:

• More accurate valuations of your super interests
• Clearer processes for splitting complex super products
• Better protection of your rights during separation
• Easier access to necessary information

Timeline for Changes

• Consultation period ends: April 26, 2024
• Expected implementation: Before April 1, 2025
• Transition arrangements being developed

How We Can Help

At Mediations Australia, we’re early resolution focused. we have a team of family lawyers and mediators who can assist you in Canberra, Perth, Adelaide, Melbourne, Sydney, and all other locations in Australia, talk to one of our family lawyers today about super splitting and property settlements.