Superannuation Splitting Orders
Make sure your Superannuation fund agrees with your agreement
“Superannuation Splitting” – What is It?
When couples who own property together separate, they look to divide all of the assets and liabilities of their relationship between them in what is commonly known as a ‘property settlement’. Superannuation is not, strictly speaking, an asset, as it is not generally currently available for division between the parties, and as such, it is known as a ‘financial resource’.
Historically, superannuation was not able to be divided between parties the same way as other assets, like cars, furniture and bank accounts. However, legislative changes in 2002 (for married couples) and 2009 (for de facto couples) mean that separating couples are now able to arrange a division of one party’s superannuation entitlements as part of their overall property settlement. Dividing one party’s superannuation so that the other party receives a portion of it is known as a ‘superannuation split’.
Your Guide to Everything You Should Know About Consent Orders
- Initial discussion about your agreement.
- Continual updates on the progress of your agreement.
- Access to our office to answer questions.
- Creation and submission of your application to the Family Court.
- Discussion with Rachel Stubbs (Accredited Specialist in Family Law) about your agreement.
- Custom drafting your agreement by Rachel Stubbs.
- Suggested notations on your orders.
- Draft consent orders for your approval in 48 hours.
- Changes to your orders made within 24 hours.
- Assistance in the signing process for your application.
- Online submission of your application to the Family Court.
- Answering any requisitions (if required) to the Family Court.
- Posting original orders (Registered Post) to you on completion.
- A certified copy of the orders emailed to you.
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How Does a Superannuation Split Work?
It is important to note that when one party’s superannuation is split, in most instances the other person does not become entitled to take the portion of the first party’s superannuation that they are to receive in the form of cash. The amount that is to be split in their favour goes into their own nominated fund, and is not therefore available until they reach retirement age.
The Family Court is able to make an order, as part of an overall property settlement, splitting one party’s superannuation entitlements. That order is then legally binding on the trustee of the superannuation fund, who has to comply with it.
Superannuation splits can be based on a set sum or lump sum figure, say, that the sum of $100,000 be taken from a party’s entitlements, to be given to the other party, or they can be based on a percentage of what is available in a fund, i.e. that 50% of the party’s current entitlements go to the other party It is a requirement before court orders are made, whether by agreement or otherwise, and before a binding financial agreement is entered into, that both parties disclose their respective financial positions to one another.
This means that in many instances, a precise figure is used for the superannuation split, rather than a percentage, having regard to what each party currently has in terms of superannuation entitlements. A percentage figure might be more useful in particular circumstances, say, with a binding financial agreement that addresses a superannuation split that might occur in the event of a future separation.
Superannuation splitting orders can be obtained by both married and de facto couples.
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If you have questions or are close to reaching an agreement, we’d be happy to give you advice on how to take those last few steps.
Obtaining a Superannuation Splitting Order
There are a number of things that need to be done in order to obtain a superannuation splitting order. Ideally, you and your former partner will have reached an agreement about your overall property settlement, which agreement will include provision for a superannuation split.
It is, however, necessary to obtain the approval and consent of the Trustee of the superannuation fund from which a split is being sought before approaching the court to have orders made for a super split. If the trustee’s approval is not obtained, then the Family Court will not and cannot make the Orders that you are seeking.
The reason for this is that, ordinarily, the Family Court can only make orders for a property settlement that binds the parties to the marriage or de facto relationship. A super fund obviously doesn’t fall into that category. Usually, if you want the court to make orders that bind a third party, you need to join that third party to the proceedings.
This isn’t a practical solution for obtaining a superannuation split, and so the method by which this problem is alleviated is to obtain the consent of the trustee of the super fund to the proposed orders before approaching the court to have the orders made.
It is also very important that the wording that is used for the proposed superannuation split is very specific. Many superannuation funds are very particular about how the orders are drafted and will not provide their consent to a proposed division of superannuation until the wording they require is set out exactly the way they want it set out.
It is a matter, therefore, of approaching the Trustee of the superannuation fund with the draft orders and seeking their approval in relation to them.
The Trustee has 28 days to respond to any request for a proposed division of superannuation.
There are some circumstances in which the Trustee will not give approval, however, your solicitor will be able to identify those scenarios for you and would not ordinarily suggest a superannuation split if the Trustee was not likely to approve it.
Once the approval has been obtained, it is then a matter of approaching the Court to have orders made in accordance with the agreement reached between the parties, including the superannuation splitting orders.
Once made, the Trustee is required to be served with a certified sealed copy of the orders at which time they will take steps to implement the orders that have been made.
A few other things to note…
Superannuation splitting orders can be made by separating couples, whether they were married or in a de facto relationship.
Superannuation splitting orders can also be made as part of consent orders made by the Family Court, or as part of a binding financial agreement. Parties can enter into a binding financial agreement prior to or during a de facto relationship or marriage, or after the breakdown of a de facto relationship or marriage. This means that you can in fact agree to a superannuation split as part of a binding financial agreement entered into prior to or during a de facto relationship or marriage.
If you’re looking for more information about superannuation splits, you can go to our Superannuation Splits FAQs page for more information. If you would like an instant superannuation split fixed fee quote, we’ve got a page for that as well.
If this has given you a reason to rethink your decision not to formalise your agreement, take the next step and give us a call. We can talk you through the process, confirm the price, and get you started. If you’d like more information about our fixed fees, just click on the button below.
Why Have a Superannuation Split?
In many relationships, one party has taken considerable periods of time out of the workforce whilst the other has been the primary income earner. On separation, it is then often the case that one party has accumulated significantly more superannuation than the other by virtue of theM having been continuously employed.
In order to see a property settlement that is fair to both parties, it is often the case that there will be a division of the superannuation entitlements of the person who has the greater amount of super, and this is referred to as a ‘superannuation split’.
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