Understanding How Super Is Split in Divorce Settlements

how is super split in divorce | Ipswich Family Lawyers

Superannuation, often referred to simply as “super,” is one of the most significant financial assets Australians accumulate during their working lives.

When couples divorce or separate, understanding how super is split in divorce becomes essential, as it is treated as property under the Family Law Act 1975.

Unlike other assets such as homes or savings accounts, superannuation comes with unique rules and restrictions—it usually cannot be accessed until retirement age.

In Australia, superannuation can be divided between parties through a superannuation splitting order, which can be reached by mutual agreement or determined by the court.

The division is not automatically a 50/50 split; instead, it depends on various factors, including the length of the relationship, financial contributions, and each party’s future financial needs.

This guide answers common questions about how super is split in divorce, explaining what superannuation splitting involves, how it’s valued, whether it’s always divided equally, and the legal steps required to formalise the process.

By the end of this article, you’ll have a clearer understanding of your rights and obligations regarding superannuation in a divorce settlement.

What Is Superannuation Splitting in Divorce and How Does It Work?

Superannuation splitting is the process of dividing one party’s superannuation between both individuals as part of a divorce or separation.

Under Australian law, superannuation is considered a financial resource that can be divided between spouses, regardless of whether the separation is amicable or contested.

When splitting superannuation, the Family Law Act allows parties to make binding agreements or seek a court order.

This means you and your ex-partner can agree on how to divide superannuation, or if no agreement is reached, the court will decide for you.

Importantly, while the superannuation can be split, it usually stays in a super fund and cannot be accessed until retirement or other conditions of release are met.

Is Superannuation Always Split 50/50 in a Divorce Settlement?

No, superannuation is not always split 50/50 in divorce settlements.

The division depends on what the court considers fair and equitable after evaluating the overall financial and non-financial contributions of both parties, as well as their future needs.

Factors that influence how superannuation is split include:

  • Length Of The Relationship: In longer relationships, superannuation may be more evenly divided.
  • Contributions: Both financial (e.g., income) and non-financial (e.g., childcare and homemaking) contributions are assessed.
  • Future Earning Potential: The court considers whether one party is in a better financial position post-divorce.

For example, if one spouse was a stay-at-home parent with little superannuation, they might receive a larger share of the other spouse’s super to ensure fairness.

How Is the Value of Superannuation Determined During Property Settlement?

  • Determining the value of superannuation is a crucial step in property settlements. The process varies depending on the type of super fund.
  • Accumulation Funds: Most Australians have accumulation funds, where the value is straightforward. It’s the balance of the contributions and earnings at the time of settlement.
  • Defined Benefit Funds: These funds are more complex because their value depends on factors like years of service and final salary. An actuary may need to calculate the value for settlement purposes.
  • Self-Managed Superannuation Funds (SMSFs): For SMSFs, the value of all assets in the fund must be determined, often requiring independent valuation.

Once the value is assessed, it is added to the total pool of assets. From there, the division process takes into account the specific circumstances of the relationship and the financial needs of both parties.

Can You Avoid Splitting Superannuation in a Divorce?

Yes, it is possible to avoid splitting superannuation in a divorce if both parties agree.

Instead of splitting the super, you may negotiate an alternative arrangement where one party retains their superannuation while the other receives a larger share of other assets, such as cash or property.

This approach is often referred to as a “balance adjustment.”

However, to ensure that the agreement is legally binding, it must meet the following criteria:

  • Consent Order: The agreement is approved by the court.
  • Binding Financial Agreement (BFA): The agreement is formalised through a legal document signed by both parties after obtaining independent legal advice.

Keep in mind that avoiding a super split requires mutual agreement. If disputes arise, the court may still decide to include superannuation in the settlement.

What Are the Legal Steps for Splitting Superannuation in an Australian Divorce?

The process for splitting superannuation involves several legal steps, which include:

  • Disclosure of Superannuation Details: Both parties must provide full and honest disclosure of their superannuation accounts, including statements and fund details.
  • Valuation of Superannuation: If necessary, an actuary or financial expert will determine the value of superannuation accounts, especially for complex funds like defined benefit or SMSFs.
  • Negotiating a Settlement: You can negotiate a property settlement, including superannuation, through mediation, legal representation, or direct discussions.
  • Drafting a Binding Agreement: Once an agreement is reached, it can be formalised through a Binding Financial Agreement or Consent Orders submitted to the Family Court.
  • Court Decision (if no agreement is reached): If negotiations fail, the court will decide how superannuation is split based on fairness and equity.

It’s essential to seek legal advice throughout the process to ensure compliance with family law and to protect your financial interests.

Ready for Legal Guidance? Call Ipswich Family Lawyers

Dividing superannuation in a divorce can be complicated, but understanding the basics of how it works and seeking professional guidance can make the process smoother.

Each case is unique, and the outcome depends on your specific circumstances, including the type and value of superannuation, as well as your financial contributions and future needs.

If you need help with dividing superannuation or any other aspect of property settlement, Ipswich Family Lawyers is here to provide expert advice tailored to your situation.

Our experienced team is committed to ensuring fair and equitable outcomes for our clients. Contact us today to discuss your needs and take the first step toward securing your financial future.

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