What Happens to My Superannuation If I Divorce or Separate?
Going through a divorce or separation can be a challenging process, particularly when the emotional stress of separating is combined with the legal and financial concerns of dividing assets and property between you and your ex-partner.
During separation, partners typically make an arrangement which outlines how assets, liabilities and financial resources will be split between the couple. The couple’s ‘property pool’ will be divided as agreed upon, or determined via a property settlement if contention arises.
Superannuation accumulated over the course of a career may be a major financial asset for an individual as well as an important resource for supplementing their income while retired. As such, it is important to understand the relationship between superannuation and divorce proceedings, and how superannuation factors into property considerations.
Is Superannuation Included in a Property Settlement?
Given that you typically cannot access your superannuation until you retire, it may not be the first item which springs to mind when considering property to be divided after a separation.
Despite this, the Family Law Act 1975 dictates that superannuation is to be treated as property and therefore taken into account during the division of assets and property.
Australia has a range of laws concerning the splitting of superannuation during a separation process, and the Family Law (Superannuation) Regulations 2001 provides the legal framework for methods of valuing an individual's superannuation interests, as well as various potential options for payment splitting. It also outlines information which trustees are required to provide to the parties involved.
What Determines the Fate of My Superannuation After Separation?
As superannuation is considered a property asset and may therefore be divided between parties, it is important to consider your legal options concerning superannuation and divorce or separation.
These options include:
- Seeking to split the superannuation per an agreement or court order.
- Deferring your decision until another time such as when you or your former spouse meet the super release condition requirements.
- Factoring the worth of the super into the property pool but leaving the superannuation itself untouched
In determining a suitable division of property, there are a number of factors that the court will take into account. These include the property and superannuation owned by each party at the commencement of the relationship, the property and superannuation owned at the time of separation as well as contributions (either direct or indirect) by both parties to the property pool. The Court will also consider whether any adjustment should be made in favour of either party to account for their future needs.
The specifics of your superannuation’s management will also impact legalities around potential division of super. For example, there are differences in rules between self-managed superannuation funds (SMSF) and Australia Prudential Regulation Authority (APRA) regulated super funds. Individual super funds may also have specific rules concerning the transferring of super payments, and these funds must be informed of any potential court orders.
When calculating a course of action regarding superannuation and divorce, you should also note that super funds often charge administrative fees when actioning requests.
Looking for Legal Help With Your Superannuation and Divorce?
When it comes to navigating property settlements as well as superannuation and divorce, things can get complex. At Pullos Lawyers, our experienced team can help guide you through the legal considerations that accompany separation, and ensure that you are making sensible decisions and informed decisions concerning your financial future.
We can also assist with a range of matters including de facto & same-sex law, spousal maintenance, and property settlement. If you would like to discuss your legal options, please get in touch via email, or call us in our Gold Coast office on (07) 5526 3646, or our Brisbane office on (07) 3144 1641.