Obtaining a superannuation split through a Consent Order in Australia involves a multi-step process governed by the Family Law Act 1975 (Cth) and its associated regulations. This process ensures the split is legally valid and binding on the superannuation fund trustee.
Here is a step-by-step breakdown of the process:
Step 1: Value the Superannuation Interests
Before you can split superannuation, you need to know its value. The method for valuing superannuation varies depending on the type of fund (e.g., accumulation vs. defined benefit).
- Obtain a Valuation: For simple accumulation funds, the latest member statement may be sufficient. However, for more complex interests, such as defined benefit funds, an actuarial valuation may be required to determine the correct value for a family law property settlement.
Step 2: Reach an Agreement
Both parties must negotiate and agree on how the superannuation will be split. The agreement can be to split the superannuation by:
- A specific dollar amount (a “base amount”).
- A specific percentage of the superannuation interest.
This agreement should be a part of the overall property settlement negotiation, as superannuation is treated as property under the Family Law Act the same as any other item such as realestate and investments.
Step 3: Draft the Consent Orders
Once an agreement is made, the terms must be drafted into an Application for Consent Orders. The superannuation splitting clauses in the orders must be drafted with precise legal wording, referencing the correct sections of the Family Law Act 1975 and the Family Law (Superannuation) Regulations.
The draft orders must:
- Clearly identify the superannuation fund and the account holder.
- State the agreed-upon base amount or percentage to be split.
- Include a provision that the orders will bind the superannuation fund trustee.
Step 4: Give “Procedural Fairness” to the Superannuation Fund
Kater Austin Family Lawyers will provide “Procedural Fairness” to the outgoing before filing the Consent Orders with the Family Court. Kate Austin Family Lawyers serves a copy of the draft orders on the trustee of the superannuation fund.
- The 28-Day Rule: The superannuation fund trustee is to be given at least 28 days to review the draft orders. This allows them to raise any objections to the wording or the split itself if it is not workable under their fund’s rules.
- Proof of Service: The parties must keep proof that they provided this notice to the fund. When the application is filed, the Court will require evidence that the fund was given the opportunity to object. If the fund does not respond within the 28-day period, it is generally assumed they have no objection.
Step 5: File the Application with the Court
After the 28-day period has passed and any issues raised by the fund have been addressed, the Application for Consent Orders can be filed with the Federal Circuit and Family Court of Australia.
The following documents are typically required:
- The signed Application for Consent Orders form.
- The draft orders were signed by both parties.
- Proof of the value of the superannuation interest (e.g., the latest member statement or actuarial report).
- Evidence of procedural fairness provided to the superannuation fund (e.g., a copy of the letter sent to the fund).
Step 6: Court Review and Approval
A Registrar or Judge of the Court will review the Application for Consent Orders to ensure the proposed orders are “just and equitable.” If they are satisfied, the Court will seal the orders. If the orders are not considered fair or are improperly drafted, the Court may send them back with a request for amendments.
Step 7: Serve the Sealed Orders on the Superannuation Fund
Once the Court seals the Consent Orders, a certified copy of the final orders must be served on the superannuation fund trustee. This is the final step that formally instructs the fund to implement the split.
The fund will then process the split in accordance with the orders, typically by either:
- Transferring a lump sum to the non-member spouse’s new or existing superannuation account.
- Creating a new superannuation interest within the same fund for the non-member spouse.
