Superannuation Splitting
In family law, superannuation is regarded not merely as an asset but as a distinct type of property.
This recognition is crucial in property settlement proceedings, where superannuation can be split between parties either by mutual consent or by Court order.
What is Superannuation Splitting?
Superannuation splitting involves the division of one party’s superannuation interests in favour of the other party.
It’s important to note that this process does not convert superannuation into cash.
Instead, the recipient must generally wait until they reach retirement age to access the benefits.
The Role of Superannuation Trustees
When a superannuation split is ordered, the trustee of the superannuation fund must be notified before the split can be executed.
This is to ensure procedural fairness and allow the trustee to prepare for any necessary actions to implement the split.
If the value of the superannuation is unclear, the trustee may need to provide detailed information, which sometimes incurs a fee.
How to Split Superannuation
Value the Superannuation
Start by ascertaining the value of the superannuation interest.
This may require submitting specific forms such as a Form 6 Declaration and a Superannuation Information Request to the fund’s trustee.
Valuing some superannuation interests might be complex and require expert assistance.
Decide on the Splitting Method
By Consent: If both parties agree, they can file an Application for Consent Orders at the Court, which may approve the orders without a hearing if the paperwork is correctly prepared.
By Court Proceedings: If an agreement isn’t feasible, the matter may need to go to trial, where the Court will decide.
Implement the Orders
After obtaining the sealed Court orders, these should be provided to the superannuation fund’s trustee, who will then execute the superannuation split accordingly.
Increased Transparency with Superannuation in Family Law
Changes as of 1 April 2022 have significantly improved transparency regarding superannuation information in family law proceedings.
Now, parties (or their legal representatives) involved in ongoing property settlement proceedings can directly request superannuation information about the other party from the Australian Taxation Office (ATO).
This applies to both married and de facto relationships.
Requesting Superannuation Information
To request this information, one must use the approved Superannuation Information Request form available online.
A successful request will result in the ATO providing details about the other party’s superannuation, which can then be used for the settlement proceedings.
Why This Matters
Superannuation often represents a substantial asset in property settlements.
Traditionally, disparities in superannuation balances between genders—often due to career breaks for childcare—make this transparency critical.
It ensures that all parties have a fair opportunity to claim their rightful share of superannuation assets, preventing under-disclosure or concealment of funds.
These changes and procedures ensure that superannuation splitting is handled with fairness and transparency, reflecting the asset’s importance in providing security during retirement.
Contact Us
For more information about superannuation splitting, contact us at Bambrick Legal today. We offer a free, no-obligation 15-min consultation for all enquiries.
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Related Blog – How to Protect Assets from a Divorce