When a marriage or de facto partnership ends, a couple often has to go through the process of selling and splitting up property and other assets. But what about your superannuation?
Superannuation splitting laws allow you to treat your superannuation like property, and divide it just like you would anything else.
This is some information for anyone who is going through a divorce or separation and who needs information about how their superannuation can be divided.
Divorce can be difficult. Don't make things any harder than they need to be; speak to one of our friendly family divorce lawyers Melbourne today on 03 9878 5222. Rose Lawyers are here to ease the burden and make superannuation splitting laws straightforward.
Superannuation splitting laws
Superannuation is treated as a form of property in a separation, which means that the law allows you to value your superannuation and divide it between you and your ex-partner or spouse. In some cases one party has worked more than the other and has more superannuation, so superannuation splitting is something you may want to consider.
Splitting superannuation doesn't mean you convert the balance into a cash asset.
You still have to adhere to superannuation laws - which means you usually have to wait until retirement to access your super.
Some couples put a Superannuation Agreement in place either before, during or after their relationship.
A Superannuation Agreement can form part of a broader Binding Financial Agreement and dictates how you split your superannuation. If you do not have a Superannuation Agreement, or cannot agree on one, you can seek a Court Order.
Court orders for splitting superannuation
If you can agree on how you would like to divide your property - including your superannuation - you can get a Court order to make this agreement binding. You can also get the Court's input if you cannot agree on how you would like to divide your property.
There are two different types of Court orders:
Consent Order: for couples who have agreed on how to divide property and who want to make the agreement binding. A Court will consider whether your agreement is fair before deciding to make a Consent Order official. You can make an Application for Consent Order in the Family Court accompanied by your Consent Order. Rose Lawyers can assist you in making this application.
Financial order: for couples who are having trouble agreeing on how to divide property. The Court will look at a range of factors and will dictate how superannuation and other property should be divided.
You do need to keep in mind that the Court has the final say in a Consent Order, even where the parties are in agreement. This means that if it is not fair in the eyes of the law, then the Court will not make the Order.
How to split your superannuation
Step 1 - Find the total value of each party's superannuation
The first thing you need to do is to find out the value of each person's superannuation account, known as a superannuation interest. This is so you and your former partner can reach a fair agreement.
When you are going through a divorce or separation you are entitled to find out the value of your superannuation from your superannuation company provided you can show a genuine need for the information. It is likely your superannuation company will charge a fee for this service.
If the Court is making a Payment Splitting Order the Court is required to value the superannuation interest.
Step 2 - Get legal advice
If you do not have a Binding Financial Agreement in place, it is important to get legal advice so that you can work out how to divide all of your assets. Legal advice from our divorce lawyers Melbourne can help you to work out whether an agreement can be reached, or if you should apply for a Court Order so that the Court can assess how the property of the parties and the relationship should be divided.
Speak to your lawyer about getting a 'payment flag' put on both parties' superannuation accounts. A 'payment flag' means that neither party can make superannuation withdrawals before a superannuation split has taken place.
A Court will consider how much each party contributed to the relationship when dividing superannuation. Contributions can be both financial (like earning a salary) and non-financial (like maintaining the home and family).
Each party's financial position post-separation will be looked at, which may affect how superannuation is divided.
In many cases, one partner earns more than the other. Many families have one parent at home caring for the children and taking care of the home, while the other partner is working. When a couple separates, the Courts will consider much more than just the financial contribution; many other non-financial factors are taken into account.
Step 3 - Apply for a Superannuation Splitting Order
Once you have a valid financial agreement or Court order in place, you can make an Application to the Court split your superannuation. In order to split your superannuation you will need to file an Initiating Application, a Financial Statement, and an Affadavit, to the Family Court. We can assist you in making this Application.
In some cases, there is a threshold for superannuation balances, in which case couples must be separated for 12 months before their super can be split. Rose Lawyers can discuss this with you in more detail.
You may not be able to split your superannuation straight away - but a payment flag (like the one we mentioned above) can apply for an extended period of time until a benefit is payable.
You will have to wait until you reach 'preservation age' - the age at which you can access your superannuation - before accessing any benefit.
Consult Rose Lawyers today
Going through a separation can be tough but with Rose Lawyers on your side we can help to make things straightforward.
Speak to our divorce lawyers Melbourne today to find out about superannuation splitting laws and find out what you need to know. Call us on 03 9878 5222 for an obligation-free discussion about how we can help with dividing your superannuation.