SuperannuationHow the law deals with superannuation when couples are dividing their assets after a marriage/de facto relationship breakdown
The following is a summary of how the law deals with superannuation when couples divide their property after the breakdown of a marriage or de facto relationship.
Superannuation splitting law
The superannuation splitting law treats superannuation as a different type of property. It lets separating couples value their superannuation and split superannuation payments, although this is not mandatory. Splitting does not convert it into a cash asset – it is still subject to superannuation laws (for example, it is usually retained until retirement ages are reached).
Options for splitting superannuation
Separating couples may either:
- enter into a formal written agreement to split superannuation. A formal written agreement requires that both you and your partner instruct a lawyer who must sign a certificate stating that independent legal advice about the agreement has been given. Once this agreement is made you do not need to go to court. The agreement is not registered in court and you must be careful that each of you retains a copy, or
- seek consent orders to split superannuation, or
- if you cannot reach an agreement, seek a court order to split superannuation.
Even when an application is made to a court, it is possible to reach an agreement at any stage, without the need for a court hearing.
You should get legal advice about these options.
What you need to do to split superannuation
Step 1: Obtain valuation information
You need to get information to value the superannuation. You should provide the following forms to the trustee of the superannuation fund:
- Form 6 Declaration. This satisfies the trustee of the fund that you are entitled to get the information for this limited purpose, and
- Superannuation Information Request Form (accompanied by the appropriate Superannuation Information Form).
The superannuation fund may charge a fee for providing the information, and this is paid when you send the forms. The Superannuation Information Kit provides the information and the forms you need. The kit is available under the 'Forms' section of this website, by calling 1300 352 000 or at your nearest family law registry.
The information from the trustee may be enough to value the superannuation. However, the valuation of some superannuation interests can be complex. An expert may need to provide a further valuation. You should get legal advice about this.
How super is valued
There are different types of superannuation. The superannuation splitting legislation sets out methods for valuing most types of superannuation, but there are exceptions, including:
- self-managed superannuation funds – they are generally valued with the assistance of an expert such as an accountant
- where the Attorney-General has approved a fund using a different valuation method.
Step 2: Decide the method of splitting
Either enter into a formal written agreement or obtain a court order.
Obtaining a court order
You get court orders about the division of property in two ways:
- by consent of the parties. If you and your partner have reached an agreement at the outset, then a Application for Consent Orders application can be filed in the Family Court, accompanied by a consent order recording the agreement. The orders can then be made in chambers without either of you attending court, or
- as a result of a court hearing. Even if you start proceedings, you can reach an agreement at any stage and once the orders recording the agreement are made you do not need to attend court further.
Either way, you need to file an application with the Court. Registry staff can tell you what forms to file. To start Circuit other party will file a Response and a Financial Statement. To commence proceedings in the Family Court you must file an Initiating Application together with a Financial Statement. The other party will file a Response to Initiating Application together with a Financial Statement.
The Superannuation Information Kit is available under the publications section of this website, by calling 1300 352 000 or at your nearest family law registry.
The information from the superannuation fund trustee will help you to complete the Court forms. You must disclose all superannuation, even if you do not intend to split superannuation payments.
efiling - Initiating applications can now be electronically filed through the Commonwealth Courts Portal (www.comcourts.gov.au). For more information see the User Guide to eFiling Initiating Applications in Family Law.
Informing the superannuation fund
If you are seeking court orders about superannuation, you must tell the superannuation fund trustee about the orders you are seeking. The trustee must have an opportunity to attend the court hearing and object to the orders that you are seeking. This is called providing the trustee with ‘procedural fairness’.
Once the superannuation order is made, whether by consent or after a hearing, it is important to provide a sealed copy of the order to the trustee.
For more information on superannuation splitting laws, including frequently asked questions, visit the Attorney–General’s Department Superannuation and Family Law website.
Superannuation – Defined benefits funds
Valuation – scheme specific methods and factors
The Attorney-General's Department has provided some information concerning the valuation of defined benefit superannuation funds. This relates specifically to addressing current applications to approve scheme specific methods which have not been determined.
1. Subsection 90MT(2) of the Family Law Act 1975 commenced with the other provisions of new Part VIIIB of the Act on 28 December 2002. It requires a court to value the interest in respect of which superannuation benefits are payable before it orders that they be split in property settlement proceedings.
2. The court is required to value the interest in accordance with any method set out in the Family Law (Superannuation) Regulations.
4. They also provide for the Attorney General to approve in writing methods or factors for determining the gross value of a defined benefit superannuation interest that is in the growth phase (r.38). Applications may be made to the Attorney-General by funds for this purpose.
Method of valuing defined benefit superannuation interest – factors
5. The method in Schedule 2 for valuing a defined benefit superannuation interest in the growth phase has been developed by the Australian Government Actuary's Office, on a typical private sector defined benefit scheme.
6. However, it is recognised that this method of valuation may be misleading, in relation particularly, to public sector funds.
Applications for scheme specific methods or factors
7. Consequently, applications for scheme specific methods or factors for valuing defined benefit interests in the growth phase are expected to come mainly from the public sector superannuation funds.
To date applications have been received and are being considered from:
Applications being considered – Name of Fund
New South Wales Parliamentary Contributory Superannuation Fund
8. The Attorney-General's Department goes through a process of approving the necessary scheme specific factors and methods. Funds affected are likely to advise their members that they have applied for approval of such methods and factors and suggest that non-member spouses await the results of those applications.
9. Applications for adjournment of proceedings may flow in such situations.
10. The Family Court liaises with the Attorney-General's Department and provides information on its website when it is notified that applications have been approved in relation to particular funds.
Approved Applications – Name of Fund
Commonwealth Parliamentary Contributory Superannuation Scheme
Commonwealth Public Sector Superannuation Scheme
Commonwealth Superannuation Scheme
Defence Force Retirement and Death Benefits Scheme
Ford Employees Superannuation Fund
Ford Management Retirement Plan
GlaxoSmith Kline Superannuation Fund
Hanson Australia Pty Limited as a participating employer in Sunsuper (previously shown as Pioneer International Limited Staff Superannuation Plan) Military Superannuation & Benefits Scheme
New South Wales Energy Industries Superannuation Scheme
New South Wales Local Government Superannuation Scheme
New South Wales Police Association Superannuation Scheme
New South Wales Police Superannuation Scheme
New South Wales State Authorities Non-contributory Superannuation Scheme
New South Wales State Authorities Superannuation Scheme
New South Wales State Superannuation Scheme
Queensland Local Government Superannuation (known as LG Super)
Queensland Parliamentary Contributory Superannuation Scheme
Queensland Superannuation (State Public Sector) Scheme (known as QSuper)
RACV Superannuation Fund South Australian Judges' Pensions Scheme
South Australian Local Government Superannuation Scheme
South Australian Parliamentary Superannuation Scheme under the Parliamentary Superannuation Act 1974 (SA)
South Australian Police Superannuation Scheme South Australian Superannuation Scheme
UniSuper (the Superannuation Scheme for Australian Universities)
South Australian Superannuation Scheme
Victorian Parliamentary Contributory Superannuation Fund
Victorian pension schemes - Governor, Judges, Masters, Chief Magistrate, Solicitor-General, Director of Public Prosecutions and Chief Crown Prosecutor
Victorian Racing Industry Superannuation Fund
Victorian State Superannuation Fund
WA Government Employees Superannuation Fund
Western Australian Gold State Super Scheme
Woolworths Group Superannuation Scheme
Woodside Superannuation Fund
Methods and Factors for Valuing Particular Superannuation Interests Approval 2003
The Attorney-General makes an instrument, which contains approvals, under r.38 and 43A of the Family Law (Superannuation) Regulations 2001, of alternative methods and factors for valuing interests in superannuation schemes.
The instruments can be viewed at: http://www.comlaw.gov.au/Details/F2011C00069