Understanding superannuation splitting
When separating or divorcing, many couples focus on dividing physical assets such as the family home, cars, or savings. However, one important aspect of a property settlement that should not be overlooked is superannuation. Superannuation is considered ‘property’ and can be split between parties as part of a property settlement.
What is Superannuation Splitting?
Superannuation splitting allows one party to transfer a portion of their superannuation balance to their former spouse. However, it’s important to note that this is not a direct cash payout – rather, the funds are rolled over into the receiving party’s superannuation account and remain subject to the usual preservation rules.
A superannuation split can be achieved through either:
- A binding financial agreement (agreed upon by both parties outside of court), or
- A court order issued as part of the property settlement process.
Benefits of Superannuation Splitting
Superannuation splitting offers flexibility in structuring financial settlements. It allows for a fairer distribution of assets, particularly when one party has significantly more superannuation than the other. It can also help balance financial security post-divorce, ensuring that both parties have adequate retirement savings.
Factors Considered in Superannuation Splitting
The decision on whether and how to split superannuation will depend on various factors, including:
- Whether there are children and who will be their primary carer.
- Whether splitting superannuation enables one party to retain the family home.
- The financial needs of both parties, including access to cash and liquid assets.
- The total value of the asset pool and the proportion made up by superannuation.
- The type of superannuation held by each party.
- The ages of both parties and when they can access their super.
- Potential tax implications of splitting the superannuation.
Obtaining Superannuation Information
To fairly assess and divide superannuation, each party is entitled to request information about their own or their former spouse’s superannuation from the fund’s trustee. This information includes:
- The current value of the superannuation balance.
- Details of any past withdrawals or payment splits.
- Any applicable fees associated with a superannuation split.
Importantly, the super fund trustee cannot disclose the account holder’s personal details, such as their address, or inform them that a request has been made.
Valuing Superannuation for a Split
For superannuation to be divided in a property settlement, it must be valued in accordance with the Family Law (Superannuation) Regulations 2001. While annual statements provide some indication of value, they may not always reflect the full worth of the superannuation interest. Seeking legal advice ensures accurate valuation and fair distribution.
Seeking Legal Advice
Superannuation splitting can be complex, and it’s important to understand your rights and obligations. A family law professional can guide you through the process, help negotiate a fair settlement, and ensure all legal requirements are met.
If you need assistance with superannuation splitting as part of your property settlement, contact our family law team at (07) 3221 4300 today for expert advice tailored to your situation.
