Over the course of a relationship, the amount of superannuation that a couple have is likely to change. Based on various factors such as employment, leave, and the type of super fund, the amount that you have in your superannuation account may be different from your partner.
While super may sometimes be regarded as a long-term account that isn’t readily accessible prior to retirement, it can be an essential asset to consider during the breakdown of a marriage or de facto relationship. In this sense, a super fund is regarded as an asset such as an investment property or savings account and maybe split between parties to the relationship pursuant to the Family Law Act 1975.
When considering how to adjust superannuation entitlements between parties upon separation, there are a few important things to note:
- Superannuation that has not vested is not property that can be adjusted between parties to a relationship without an Order or Financial Agreement. It is held on trust for the member by the Trustee of the relevant super fund.
- Women statistically have less super than men which is why it may be ‘just and equitable’ to adjust superannuation interests between separated parties if one party had periods of non-contribution, for example, when the party has been raising children.
- A superannuation split requires the consent of the super fund, and obtaining consent may take some time.
- If you hold superannuation in a fund other than an accumulation fund (such as a defined benefit scheme) it may need to be valued for family law purposes. Assets of a self-managed super fund, for example, real property may also have to be valued.
- Disclosure of superannuation interests is required under the rules and failure to disclose may lead to adverse cost consequences or a challenge to an agreement or Order.
- Parties are not required to split their superannuation upon separation, and there may be other alternatives to reach a ‘just and equitable’ outcome that suit your circumstances better, such as trading off the adjustment of super against an interest in another item of property.
Family Law outcomes are diverse, and the Family Law Courts have broad discretion in the kind of orders that can be made regarding property and superannuation adjustment between separated parties.
If you are interested in a superannuation split, or would like to discuss the treatment of superannuation in a property settlement further, please contact our Family Law team at email@example.com