For many separating couples, superannuation is the second-largest asset after the home, and sometimes the largest. Under the Family Law Act 1975 (Cth), super is treated as property, and it can be split between the parties as part of a property settlement. This applies to married and de facto couples throughout Australia.
How a super split works
A super split does not usually put cash in anyone’s hand. Instead, part of one person’s super balance is moved into the other person’s super account. The money stays in the super system until the receiving person meets a condition of release, such as retirement.
A split can be made by:
- a superannuation agreement or binding financial agreement; or
- court orders, either consent orders that the couple agrees on, or orders made by a judge after a hearing.
Step 1: Find out what super exists
Each party should obtain current information from every super fund the other party belongs to. Funds must respond to a formal request for family law information. If it is unclear what funds exist and court proceedings are already under way, the court can obtain super information held by the Australian Taxation Office.
Step 2: Value the super
Most accounts are accumulation accounts, valued at their current balance. Defined benefit schemes, common for public servants and some long-term employees, must be valued using prescribed methods and can be worth much more than a statement suggests.
Step 3: Give the fund procedural fairness
An agreement or order will only bind the fund if the trustee is first given notice of what is proposed. In practice, draft orders are sent to the fund, which has 28 days to raise any objection. Skipping this step is a common reason a split fails.
Time limits
Property and super claims must generally be started within 12 months after a divorce becomes final, or within two years after a de facto relationship ends. After that, the court’s permission is needed.
Overseas pensions and provident funds
Many families hold retirement savings outside Australia, such as Hong Kong MPF, Singapore CPF or Malaysian EPF accounts. Australian super splitting orders cannot directly split a foreign fund. Instead, those balances are usually taken into account when dividing Australian assets, for example by giving the other party a larger share of the home. Getting reliable evidence of overseas balances early is important.
Self-managed super funds
Where a couple runs an SMSF together, separation also raises questions about who remains a trustee and how assets such as property inside the fund are dealt with. These cases need careful planning with the fund’s accountant.
Related reading
Chua Tan Associates advises separating couples across Australia on property settlements, including super splits and overseas assets. To arrange a confidential consultation, please contact our Melbourne office on +61 3 9602 3988 or submit an enquiry. Advice is available in English, Mandarin and Cantonese.
Justin Chua (蔡智勋), lawyer and mediator, Chua Tan Associates, Melbourne. General information only, not legal advice. Federal family law applies across Australia; Western Australia has its own family court legislation for de facto couples, and state laws differ for Wills.
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