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Will Your Super Be Split During a Divorce or Separation?

The Superannuation Splitting Laws allow couples to divide their superannuation in the event of a divorce or separation. Under the law, one partner may split the funds remaining in the superannuation fund to make a payment to the other party’s fund after the separation.

Notably, under the Family Law Act superannuation is considered to be akin to property. However, it is different from other physical assets as it is held in trust. Therefore, it is not converted to cash, and the funds still fall under the superannuation laws and the usual conditions for its release. Thus, you need a Divorce Lawyer to help guide you when it comes to Superannuation and Divorce, to protect your best interests.

 Divorce or Separation

Find Out What You’re Entitled to When It Comes to A Superannuation Split

Under the family Law Act, you may be entitled to a superannuation split or legally required to split the fund if you were married or in a de facto relationship but have now separated. In the latter, the person seeking superannuation orders must be in an actual relationship for at least 2 years. However, if there is a child, the 2-year rule no longer applies, so the party can seek superannuation orders even if the separation is before the 2-year mark. Consult a Family Lawyer in Sydney to assist you in the process.

How Much of Your Superannuation Will You Have to Pay? Or How Much of Your Ex-Partner’s Superannuation Will You Be Entitled to Receive?

In a long relationship where both parties had no substantial superannuation at the start of their relationship, the split is calculated equally. The superannuation and divorce proceedings will compute both parties’ superannuation interests and divide them by two. Once split, the other half will go to the other party’s fund of choice.

However, this kind of even split is not always the case. If you are undergoing this process, you can make an agreement with your former partner. Alternatively, you can seek the assistance of a Divorce Lawyer to negotiate the superannuation split that fits your needs. For example, you can ask for more cash assets to buy a new home while the other party can keep the super because the age is closer to retirement.

You can make deviations in the property settlement based on your needs and preferences so speak to a Family Lawyer in Sydney for guidance. The Family Courts have a broad range of discretionary measures in determining an equitable division of superannuation interests. If you go through the court to settle the dispute, they follow a four-step process for determining each parties’ superannuation entitlement:
Value of the superannuation
Assessment of each individual’s financial and non-financial contributions to the fund’s purchase, conservation, and growth.
Consider factors under the Family Law Act, including but not limited to:
Age of each party
State of each party
Income earning capability of each party
If there are children and who has custody
Other existing financial obligations of each party
Ensure the final settlement is just and fair after evaluating each party’s unique circumstances.

How Soon After Separation Can You Make a Superannuation Claim?

If you were married, you ought to apply for superannuation orders in court within 12 months of your divorce order. However, you can make a claim any time after the separation if you still have not obtained this order.

If you are in a de facto relationship, apply for the superannuation court orders within 2 years of your separation from your partner.

If you exceed the suggested period, the Court may grant leave to the other party if they establish financial difficulties. Therefore, be aware of these limits so you can claim what is rightfully yours.

Where Can You Find Information About the Value of Your Superannuation Fund?

If you are the party concerned or an eligible person, you can request the fund value information from the superannuation fund’s trustee. A person can be considered eligible to seek further information regarding the superannuation must be:

  • The member
  • The spouse or partner of the member
  • Their legal representative
  • Another individual who plans to have a superannuation agreement with the member

So, the eligible person can gain access to the information about the superannuation interest, he or she must first declare the following information to either: acquire data to negotiate the agreement or seek assistance related to a family law hearing based on the superannuation. The eligible person must also give the full name and birth date of the member.

Defined Benefit Fund Versus Self-Managed Fund

A preset formula in the trust deed is unique to the Defined Benefit Fund. It accounts for the member’s employment period and salary at retirement. Since these are complex, and a forensic accountant is needed to determine the value. Meanwhile, self-managed funds are private funds managed by the members themselves. Usually, they seek the insight of an accountant or lawyer. Since the parties do it all themselves, the fund value can be ascertained by adding the value of the assets in the fund. For best results, an accountant’s input will be helpful.

How to Formalise a Superannuation Agreement?

After agreeing to the split, you can formalise the details in a Financial Agreement or utilise the Court for Consent Orders. Once the latter is approved, this agreement is legally binding and enforceable. You can also make a binding financial agreement when both parties seek legal advice before signing the final documents. Then, to affect the Superannuation Split, inform the fund’s trustee regarding the splitting orders.

If you cannot reach an agreement with your ex-partner, you must apply for a court order. In addition, you can seek the advice of our team at Platinum Lawyers Australia. We advise clients on all matters of divorce and separation, including superannuation issues, property distribution and divorce settlements.

CALL (02) 8084 2764

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