by: Carolyn Devries
For many people superannuation is one of their biggest assets, after real estate. Commonly though, people forget or ignore superannuation, or don’t understand it’s importance, when resolving property settlement with their ex. This can result in unfair and unjust property settlement outcomes. Read on to understand how superannuation is considered and dealt with in property settlements after separation and divorce. Here are some common questions broken down to help you understand:
Is My Ex Entitled to My Superannuation After Separation or Divorce?
Under the Family Law Act, superannuation is considered an asset and is included in the property pool for the purpose of property settlement, like other assets such as real estate, shares, bank accounts, cars etc. This treatment of superannuation applies to both marriages and defacto relationships, whether same sex or heterosexual.
What is Superannuation Splitting?
When couples separate, as part of property settlement, superannuation can be split. This can be done through:
- A Binding Financial Agreement (made either before the commencement of the relationship, during the relationship or post separation)
- A Consent Order (agreed upon by both parties and approved by the court)
- A Court Order (where the parties aren’t in agreement and property settlement is contested and determined by the Court)
What Types of Superannuation Can Be Split
To be eligible for splitting, the superannuation fund must be covered under the Family Law Act, which includes:
- Superannuation funds (both public and private sector)
- Self-managed super funds
- Approved deposit funds
- Retirement savings accounts
Does the Superannuation Fund Need to Be Involved and Agree with the Superannuation Split
Yes, the superannuation fund needs to be informed of the proposed split of superannuation in advance, (this process is called procedural fairness), and they need to agree to the split. Further, the super fund needs to be served with a copy of the document effecting the superannuation split so they can then action the split.
How Long After Separation Can You Split Superannuation?
Since superannuation is considered an asset, the same time limits apply as a property settlement: De facto couples – have two years from the date of separation. Married couples – have one year from the date your divorce is finalised.
What If My Ex is Withdrawing Super (or Might Do So)?
If you’re worried your ex might access their super before the settlement is finalized, there are a few ways to protect it:
Option 1: Ask for an Undertaking
An undertaking is a formal promise that your ex won’t withdraw any super until a certain date or a final agreement is reached. It is important to be aware though that an undertaking isn’t legally binding on the superannuation fund itself.
Option 2: Apply for a Superannuation Payment Flag
A payment flag temporarily stops a super fund from making any payments. The flag stays in place until it’s removed by a court order or agreement.
Option 3: Seek a Court Injunction
An application can be made to the Court for an injunction, which legally prevents your ex (or their fund) from accessing super.
Can Superannuation that is Split by way of Property Settlement be Withdrawn as Cash?
No, superannuation split by way of property settlement does not convert superannuation into cash. It involves dividing the superannuation assets between the parties, which remain subject to superannuation laws, and are usually not accessible until retirement age.
Do I Need a Lawyer for a Superannuation Split?
Splitting superannuation is complex area of law so it is best to obtain advice from a qualified family lawyer.
About Author
Carolyn Devries is the founder of New Way Lawyers, specialising in family law. Carolyn has also founded a Facebook group called Lunch with A Lawyer where people can ask their family law questions for free. She has also released a 7-part podcast called Pathways Through the System which explains the family court legal system.