What is Superannuation Splitting?
Superannuation entitlements can be split between couples in the same way as other assets. Learn more about superannuation splitting here.
The breakdown of a marriage or a de facto relationship could mean the division of your assets and debts, and superannuation is no exception. Superannuation is treated as a property thus, laws relating to superannuation splitting allows super to be divided between parties when a relationship breaks down.
Who Can Apply for Superannuation Splitting?
The superannuation laws will apply to couples that are separating or have separated with their spouse. The definition of a spouse would include any person who is:
- legally married
- in a relationship that is registered under certain state or territory laws (including same-sex relationships)
- living in a genuine domestic basis as a couple (de facto spouse)
When Can I Apply for Superannuation Splitting?
You can apply for superannuation splitting at any age however, your partner must be either:
- less than the preservation age which is the minimum age according to the law. You can check this on the ASIC Money Smart website.
- aged between their preservation age and 65 years, and not retired.
What Are My Options for Splitting Superannuation?
Couples that are separating or have separated may either:
- enter into a formal binding financial agreement to split their superannuation
- seek a consent order from the court to split their superannuation
- seek a financial order from the court if there is a disagreement on how to split the superannuation
What Does the Process Involve?
Firstly, you may need to get information relating to the value of the superannuation that you are splitting. Subsequently, you have to submit various forms to the super fund, which you can locate on the Federal Circuit Court of Australia website. A self-managed superannuation fund however, is often valued with the help of an expert such as an accountant.
Additionally, you can do this for your super fund or your ex-partner’s super fund but remember that the fees for providing this information may be payable by the person who has requested for the information.
After that, depending on the situation, you can also establish a ‘flagging agreement’ which prevents the super fund from paying out any super until the flag is lifted.
Can you split all Superannuation Interests ?
No- provisions relating to splitting superannuation, establishes that some interests cannot be divided. For instance, dividing superannuation of little or no value. Moreover, super interests with a withdrawal benefit of less than $5000 have been classified as interests that cannot be divided.
Refer to the website on contributions splitting to find out more about interests that you cannot split.
What Happens After the Super is Split?
Once you obtain a splitting order, whether by consent or after a court hearing, you’ll have to provide a copy of the order to the super fund for it to be effective. Then, benefits that you may incur after splitting superannuation interests will become accessible in the same way as the rest of your super. Likewise, you will not be able to release your superannuation funds until you reach your preservation age.
Splitting Super- What Else Do I Need to Keep in Mind?
One of the main requirements of superannuation splitting laws is also that each party must get independent legal advice about the agreement that they are considering entering into. Consequently, it is important that you obtain legal advice regarding how superannuation will be treated upon separation. For further help, connect with one of our super lawyers here.
Anupa is a Legal Intern at Lawpath, and is currently in her final year of studying Bachelor of Laws at Macquarie University.