Some friends of mine recently decided to call it quits on their marriage.
Like most couples that have been together for many years, their lives are completely entwined.
This means as well as going through the painful process of splitting up as a couple, they’re also dealing with the complexity of splitting up their assets – and their super.
Family law in Australia treats superannuation as property that can be divided or split when a marriage or de facto relationship breaks down.
It’s an extremely complicated area and superannuation splitting laws – as they’re known – apply to all super funds and all marriages and de facto relationships (except for de facto relationships in Western Australia).
In a nutshell, when a relationship breaks down super can be split either through an agreement (a superannuation agreement) or through a Court Order, as part of a property settlement.
By law, the trustee of your super fund must adhere to the requirements of either the superannuation agreement or Court Order.
The splitting laws are very specific about both the process couples must go through in order to split their super, and what your super fund’s trustee can and cannot do.
For example, your Trustee must provide certain information about the superannuation account to an ‘eligible’ person, but they must not provide postal addresses for spouses, or advise the member that a non-member spouse has requested information about the account.
If requested, Trustees must also impose what is known as a benefit flag so that payments can’t be made until the flag is lifted. This instruction can come from either the superannuation agreement or Court Order.
If you’re married or in a de facto relationship, whether you’re contemplating separation or not, here are some things to keep in mind with regards to super splitting:
- You don’t have to wait for a marriage or relationship breakdown to take place before putting a superannuation agreement in place. In fact, it could be beneficial to agree this while things are good.
- You must consult a lawyer to establish a superannuation agreement and complete a special form to show proof of this.
- Once the super is split, this doesn’t mean you’ll have immediate access to it, as it will still be governed by the normal provisions relating to access to super according to your age and so on.
- Last but not least, there is a cost to all of this. As well as your legal fees, your super fund’s trustee may also charge you for providing information and splitting a super account under the Family Law Act. Australian Super’s current fees are $50 to provide information and $70 to split a super account. There’s no charge for implementing a flag.
For more information on super splitting, visit the following websites:
You can also download our Family law payment instruction form.