Superannuation – Treated As Property
Under the Family Law Act 1975, superannuation is treated as property even although it is not “technically” property. Superannuation is available to be divided between parties in a property settlement under Part VIII B of that Act, along with real estate, shares, cars, bank accounts and so on.
This has been the law for married couples since 2001 and for de facto (including same sex) parties since 2009.
Types of Superannuation
There are several different types of superannuation. The three most common kinds of funds are:
- Accumulation Interest;
- Defined Benefit;
- Self Managed Funds.
Superannuation Splitting legislation permits superannuation to be divided between parties at the end of their relationship.
Superannuation can be “split” either through a Court Order, or by a Superannuation Agreement (Binding Financial Agreement) (LINK).
The mechanics for effecting a superannuation split are strict. Once the terms of the Order or Agreement have been finalised, it must be given to the Superannuation Fund for pre-approval. Once Orders are made/the Agreement concluded, that formal paperwork must be served on the Fund.
It is then for the non-member spouse to decide whether he/she wants to open up a stand-alone account in the existing Fund or have the split money sent to their own existing Fund or a new Fund of their choosing.
Subject to that decision, Funds to the value of the split then transferred to the non-member’s nominated Superannuation Fund.
After the split has occurred, both parties go forward with separate superannuation accounts independently of the other. Each spouse can access his/her account without reference to the other and upon satisfying a condition of release relevant only to the individual’s account.
Certain superannuation are not splittable and these include:
(a) If the balance is less than $5,000;
(b) Certain pension accounts.
Accessing Superannuation Information
Section 90MZB of the Family Law Act regulates the information Superannuation Funds require to provide to parties in Family Law property negotiations. This information can be sourced by completing a Form 6 Application. Upon receipt of the Form 6 Application, the Superannuation Fund must:
- Provide requested information about the superannuation balance to the member or non-member spouse making the request;
- If the request comes from a non-member spouse, refrain from advising the member that the request has been made; and
- Not disclose the superannuation member’s address to the other spouse.
Self Managed Funds
Where parties have a self-managed super fund which they want to split, there are very strict compliance requirements that need to be adhered to and complex matters considered. The issues include: who, if either party wishes to continue membership of the Fund; amendments to the Trustee Deed; Capital Gains Tax; valuation of self-managed superannuation assets; and an understanding of the relevant Superannuation Regulations.
The Family Law Team here at Pearce Webster Dugdales regularly assists clients in relation to superannuation splitting and overall rights and obligations in the context of Property Settlement . Please feel free to contact us for an obligation-free preliminary chat.