This article discusses whether Family Law Superannuation can be excluded from a property pool.
The Family Law Courts now treat superannuation as “property.”
In most cases, if a terminating event (such as incapacity, severe financial hardship, compassionate grounds or terminal medical condition) has not occurred and a party is not at the minimum retirement age (ranging from 55 to 60 depending on how old you are), then in reality, superannuation is not property as it cannot be accessed or spent by the member spouse.
Part VIIIB of the Family Law Act 1975 (“the Act”) has been amended so that a spouse party’s superannuation interest is treated as if it were property. There are also specific Regulations that prescribe how such superannuation interests are to be valued.
Practically and most importantly, this means that in any family law property division (whether between married or de facto couples), a party’s superannuation interest must be identified and valued.
A party is able to ascertain the value and details of the other party’s superannuation interest by completing a Form 6 Declaration and submitting their request for information about that party’s member benefit accounts.
In most cases, when an accumulation fund is split (and that fund is still in the growth phase), then part of the party’s superannuation can be transferred to another complying superannuation fund of the other party. In these cases, a “superannuation split” does not mean that the superannuation can be transferred to the other spouse party and taken as “cash” or spent by that party. They must be placed in their own complying superannuation fund.
It is often difficult for a spouse party to determine what is in their best interests to what property (i.e. “non-superannuation assets”) and superannuation mix they should receive in a family law property division. It is therefore strongly recommended that one seeks independent advice from a qualified accountant and financial advisor in this regard.
We have an established network of such experts who can best advise as to what is the best arrangement in relation to superannuation, having regard to one’s particular financial circumstances.
The Act places strict requirements on both spouse parties and also on the Superannuation Trustee in relation to the specific drafting of superannuation splitting Orders.