Divorce is a very complex matter that involves many issues, one of the most important being property division. In Australia, superannuation is an important type of asset. Because Australian superannuation is governed by its own particular legislation, splitting superannuation is somewhat distinct from other forms of property division, and how to handle superannuation after divorce is a question many people care about. This article will walk you through the steps and considerations for handling superannuation after divorce.
Splitting Superannuation
In Australia, superannuation is a way of saving to prepare for life after retirement. Superannuation is commonly shortened to “Super” and is a form of retirement security. If you are working in Australia, you may be eligible to receive compulsory superannuation contributions paid by your employer. The Australian government also sets a minimum contribution rate, known as the statutory contribution rate. This rate is currently 10.5% of an individual’s ordinary earnings (2022/2023 financial year). You can learn more about superannuation on the Australian Taxation Office (ATO) website’s personal super page.
Australia’s superannuation splitting laws treat superannuation as a different type of property. This means that after divorce, the couple can value and split the superannuation, but splitting superannuation is not legally mandatory.
Splitting superannuation does not convert the superannuation into a cash asset; it remains governed by superannuation law. That is, you generally must wait until retirement age before you can access your superannuation.
How much of an ex-partner’s superannuation can you receive after divorce?
If the parties negotiate between themselves, the most common approach is to add together the value of each party’s superannuation entitlements, divide by two, and then split one party’s superannuation entitlement so that a payment is made to the other party’s super fund. The result is that both parties end up with equal superannuation amounts.
Of course, different scenarios can also arise. The parties may negotiate a superannuation splitting arrangement based on their own needs. For example, one party may need a larger share of the existing assets to purchase a property, while the other may wish to retain as much superannuation as possible to prepare for retirement.
However, if the matter is left to the court, the court has discretion over how to split superannuation in order to determine a just and equitable division of each party’s superannuation interests.
How long after divorce can you apply to split superannuation?
As with the division of other ordinary property, you must apply to the court for a superannuation order within 12 months from the date the divorce order takes effect. After the 12-month limitation period has passed, if one party to the marriage can prove that applying within the time limit was difficult, the court may also permit that party to apply for a superannuation order. However, applying out of time is an expensive and complicated process, because the party must make a special application to the court, and the court is not guaranteed to grant leave. So if you wish to make an application to split superannuation, it is recommended that the parties deal with it within the limitation period.
Steps for Splitting Superannuation
1. Obtain a valuation of the superannuation
You need to obtain valuation information from your superannuation fund (by sending the relevant forms). The laws on superannuation splitting set out the specific calculation methods for valuation.
2. Decide on the method of splitting
Superannuation can be split in the following ways:
- Sign a written agreement
Each party needs to engage their own lawyer to obtain independent legal advice and sign a certificate confirming that they have received independent legal advice. Draw up and sign the written agreement. There is no need to go to court, and the agreement does not need to be registered with the court, but both parties should keep a copy of the agreement.
- Apply for a consent order to split the superannuation
If the parties reach agreement on the superannuation arrangements and wish to formalise the agreement so that it is legally binding, you can apply for a consent order. A consent order can also be used to vary or discharge an existing family law order.
If you and your ex-partner reach an agreement from the outset, you can submit an Application for Consent Orders to the Family Court without either party needing to attend court.
- Apply to the court for a determination
If the parties cannot reach agreement, they may apply to the court for a determination. Even after an application has been filed with the court, it is still possible to reach agreement at any stage without the need for a court hearing.
Notifying the Superannuation Fund
If you are seeking a court order in relation to superannuation, you must inform the trustee (fund) of the superannuation fund of the order you are seeking. The trustee must have the opportunity to attend the court hearing and oppose the order you are seeking. This is known as providing the trustee with “procedural fairness”.
Accordingly, if you are seeking a superannuation splitting order, you must serve a sealed copy of the application, response, or reply on the superannuation trustee promptly after filing it. You must also notify the trustee in writing of the terms of the order to be sought at the hearing and the hearing date, at least 28 days before the first day of the hearing. You will also need to provide the trustee with a copy of the court order.
What if the other party refuses to disclose the specific amount of superannuation?
If the other party refuses to disclose the specific amount of superannuation, you can complete the form provided by the Family Court and submit the completed form to the relevant superannuation fund, after which the superannuation fund will provide the relevant superannuation information at its discretion.
Finally
In short, after divorce, handling superannuation requires compliance with Australia’s relevant legal provisions. If you and your ex-partner can reach agreement, you can split superannuation by signing a written agreement or applying for a consent order, without going to court; if agreement on the superannuation split cannot be reached, you can apply to the court for a determination. In any case, you need to notify the superannuation fund of the court order to ensure procedural fairness. If you need more information or help dealing with superannuation matters, please consult our professional lawyers.
Regarding family law knowledge on Australian divorce, property division, spousal maintenance and related topics, we have written a series of articles to answer the various questions people have. You are welcome to read them:
What to watch out for when dividing property in an Australian divorce
De facto relationship breakdown — how is property divided? Watch out for these!
[Real case study] Note: signing a property agreement doesn’t automatically make it valid!
Breakups should be dignified — the court doesn’t care for melodrama. A look at Australian family law
No source of income after divorce? You may be able to apply for spousal maintenance!
Can Superannuation Be Split After Divorce?
In Australia, can a sponsor who is not yet divorced sponsor a third person for a partner visa?
When getting divorced in Australia, can a trust be divided as joint property?
