Going through a separation or divorce can be emotionally overwhelming. There are numerous things to consider during these circumstances and it’s important to think about managing your superannuation.
Superannuation also known as Super, is compulsory for all those people who are working or have worked and reside in Australia. Federal law states that employers must contribute a minimum amount to the superannuation accounts of their employees, on top of salaries and standard wages. The balance of an employee’s superannuation account is then used to provide an income stream when that person retires.
Superannuation and Family Law:
The Family Law Acts treats Superannuation as property, so like any other asset it can be divided between partners (married or in a de facto relationship) who have separated by agreement or court order.
Splitting superannuation does not convert it into a cash asset, the funds are still subject to the superannuation laws and conditions of release. Superannuation is not normally accessed until people are at least 65 years old and retired or if a person experiences financial hardship, unlike other property such as real estate and cash which are immediately available. Therefore complex provisions are made in the Family Law Act on how the superannuation payment splits are to be distributed.
Superannuation Splitting Options:
There are 3 routes available for splitting super.
1. Financial Agreement:
In this case the partners can enter into a formal written Superannuation agreement to effect a superannuation split. The separated partners would require their own respective lawyers to provide them with independent legal advice in relation to the agreement. There is no involvement of the court. Each party must keep a copy of the agreement. A copy of the agreement must be sent to the trustee of the Superannuation fund as well.
2. Consent Orders:
The parties can get the superannuation agreement made into a formal court order by filing for consent orders.
If mutual agreement is not possible, then it would require litigation in Court. The Courts would determine a just and equitable division.
The rules relating to dividing superannuation assets after parting ways are complex, even if the split is amicable, you should consider talking to a family lawyer to ensure complying with the relevant laws and protecting your fair share.
Parties should be aware that an application to the court must be made within the following time duration:
- Married couples have to file an application within 12 months of the date the Divorce Order.
- De-facto couples must file an application within 2 years of separation.
A special application to the Court can be made if the party can establish hardship. However, this would involve higher expense and there is no guarantee that the court will grant the leave.
In such times of immense stress, it is best to have lawyers you can rely on. Those who will correctly guide and ensure to get the best possible outcome for you.
Consider a quick chat with us to know more - call (03) 9743 1333