When a marriage or de facto relationship ends, you may be entitled to a superannuation split as part of the property settlement. While it may not be the case for all relationships, superannuation splits can apply to marriages or de facto relationships, and to couples of any gender.
In most property settlements, the Family Law Act 1975 (Cth) ("The Act") outlines how assets are divided based on the length of relationship and the contributions of each party. Superannuation can be included in this division of assets, but in accordance with Part VIIIB of the Act, it is handled a little differently. If you are in Western Australia, your interests may be covered by different legislation.
What happens with my super?
When it comes to superannuation and family law, the disclosure requirements depend on the type of superannuation fund you hold. The Family Law (Superannuation) Regulations 2001 specify how the value of your superannuation should be determined:
- Accumulation Fund: A statement showing the current balance is usually sufficient;
- Defined Benefit Fund: A valuation by an expert is usually required; and
- Self-managed Superannuation Fund: the Court will generally order a valuation method appropriate for the situation.
Once the superannuation is valued, in most situations the starting point is an equalisation of the superannuation interests. This means that both parties leave the relationship with an equal amount of superannuation. Depending on your circumstances, however, parties may agree or negotiate for a different split of the superannuation interest.
Time limits
De facto relationships
Your relationship will need to meet certain requirements to be considered to be a de facto relationship and for you to then be eligible for a superannuation split.
Additionally, all de facto property settlements are also subject to a time limit for commencing a claim in Court, which is two years from the date of separation.
Marriage
After separation, time limits for making a superannuation split claim do not apply until a Divorce Order takes effect. If you have not divorced your spouse, you can make a claim for a superannuation split at any time, although we would recommend that you do that sooner rather than later. Once a Divorce Order is granted, you have 12 months to commence a claim for a superannuation split in Court.
What should I consider?
Occasionally in property settlements, parties may offer additional superannuation in lieu of other assets. It is crucial to understand that the superannuation is not paid out as cash. Any superannuation split involves a transfer of the superannuation entitlements of one party to the superannuation fund of the other party. Depending on your circumstances, agreeing to these types of offers may be detrimental to your ability to re-establish yourself after the settlement. It should be carefully considered whether arrangements such as these align with your long-term financial needs.
How can we help?
It is important to seek legal advice when navigating property settlements and superannuation splitting. If you need assistance with your property settlement or have some any questions about your circumstances, we are here to guide you through the process.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.