SPLITTING SUPER

July 26, 2018

 

Paula Phelan is a Family Lawyer with Specialist Accreditation in this area from the Queensland Law Society. She has been a lawyer for 21 years and is the director of Phelan Family Law, a Rockhampton legal firm specialising in Family Law only.

 

How is superannuation dealt with upon the breakdown of a relationship?

 

Superannuation is an incredibly important resource upon retirement. If you retire at 60, you may need to live off your super funds for 20-30 years.

 

If you are going through a relationship breakdown, you need to be aware that your former partner may be able to claim an interest in your super, or vice versa.

 

The issue of super can be particularly important in long-term relationships where the parties are nearing retirement.

 

Say for example there is a 30-year marriage where one party has gone to work everyday, and the other party has

carried out the role of homemaker, parent and potentially participated in some part time work from time to time.

 

The latter may have also been able to undertake some part time work from time to time.

 

When such a relationship ends, the working party is left with a large super entitlement, lets says $1.5 million, whereas the party who stayed home with the children and/or worked part time, is left with a small amount of super, let’s say $100,000. How does the court deal with this situation?

 

The Court will treat super as property of the relationship, just as it would the family home or money in a regular savings account.

 

The result of this is that the Court can make an order altering the parties’ interest in their super.

 

For our example above, orders can be made to split the larger superannuation.

 

By ‘splitting’ the super, a percentage of the working party’s super entitlement can be transferred to the other party’s super account.

 

It stays as superannuation and remains subject to the superannuation laws as far as access to the funds.

 

The Court will consider the value of each parties’ super interest as at the date of hearing, regardless of the date of separation.

 

However, should the parties separate and then wait years to organise a property settlement, a valuation of the super as at date of separation is usually obtained.

 

In that way, the growth in the super between the date of separation and today can be determined and it can be argued that this increase in value be excluded from the asset pool or at least seen as a contribution of that party, warranting them to receive a greater percentage of the overall super pool.

 

The same can be said of any significant super contributions made prior to the beginning of the relationship.

 

Overall, it is a good idea to seek legal advice about your particular circumstances and to ensure that any superannuation splitting orders are appropriate.

 

 

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