Superannuation, Divorce and Separation

Is my ex de facto/wife/husband entitled to my superannuation?

Yes your ex may be entitled to superannuation. In all Australian states (except Western Australia) superannuation is considered an asset in the same way property is with a property settlement. This means that like any other asset, it is included in the property pool and can be divided under a Superannuation Agreement if necessary.

What is super splitting in a separation?

Separated couples are able to split superannuation to the other spouse as part of a settlement. They can do this either by a superannuation agreement or a court order if you have an eligible superannuation policy.

 An eligible superannuation policy that can be dealt with is outlined under the Family Law Act. These policies include:   

  • A superannuation fund;  
  • Superannuation funds within the public and private sector;  
  • Self-managed super funds;  
  • An approved deposit fund; and   
  • A retirement savings fund. 
Superannuation Splitting And Divorce
Sample Superannuation Splitting Orders

What is a Superannuation Agreement?

A super agreement is a legally binding agreement between two parties within a Binding Financial Agreement or a Consent Order that deals with how any superannuation that either party will receive is to be split. While it is more common for this type of agreement to be made between separated couples in contemplation of a property settlement, couples can also make a superannuation agreement before and during their relationship, to agree on how their super will be split should they ever break up in the future

How long after separation can you split superannuation?

Since superannuation is treated as an asset the same way as other assets in a property pool, the same time limits apply for bringing a property settlement claim. If you were in a de-facto relationship, you have a time limit of two years, which starts running from the date of separation. If you were married and have obtained a divorce, this time limit is reduced to one year from the date the divorce is finalised.

If you are married and have not yet applied for a divorce, there are no time limits.

Can overseas superannuation be split in a separation?

The Family Law Act advises that the Court’s jurisdiction only extends to superannuation funds and pensions in Australia. Therefore the Courts are unable to deal with any overseas superannuation policies or overseas pension funds.

What if my former spouse has started withdrawing super or I fear they will?

Option 1: Undertaking not to withdraw superannuation

You can ask them to sign an undertaking. This undertaking sets out that a superannuation policy is not to be dealt with until a specific date or until a final property settlement. This undertaking is a promise to the Court and, as such, is an order of the Court. A breach of this undertaking is treated as the same as a breach of any other court order.

Cons of an undertaking

A personal undertaking will not be binding on the Trustee of the superannuation fund. There is only one way that a binding injunction on a superannuation fund can be obtained and that is by applying for a payment flag over the fund.

Option 2: A superannuation payment flag

A payment flag can be made by way of either an agreement or an order, per the provisions stated under the Family Law Act. This stops the superannuation fund from making any further payments.   

Parties usually use flagging orders in two distinctive circumstances:   

  • Where the parties cannot ascertain the current value of the superannuation interest but will very soon;   
  • Where retirement is impending, and one party is worried that the member may deal with the superannuation unilaterally.   

Once this flagging order has been placed successfully on a superannuation fund, the flag will remain until it is lifted by either a superannuation agreement, a court order or via the imposing of the flag that is set aside by the courts. 

Cons of Payment Flags

It is important to note that any ‘unflaggable’ superannuation interest is a superannuation fund that is currently in the payment phase. In this case, you may seek an injunction on the member spouse accessing their superannuation.

Option 3: Injunction on Superannuation

If you are unable to get a payment flag or an undertaking the last resort will be to apply to the court for an injunction. An injunction is binding on all parties and will stop either the other side from accessing funds or potentially if possible the superannuation fund from releasing further funds.

Cons to Injunctions on Superannuation.

It can be very expensive and time consuming to seek an injunction.

Final Thoughts

The laws around superannuation and family law can get very complicated, we recommend you consult with an experienced family law practitioner for options and solutions.