Superannuation can be split either by: an order of the Federal Circuit and Family Court of Australia or Family Court of Western Australia or. a superannuation agreement (a financial agreement that deals with a superannuation interest).
Superannuation splitting law
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).
There is no general division of superannuation in divorce. Each circumstance is different, so a 50/50 division should not be assumed. The division of superannuation in a divorce will be based on the settlement agreement or court order.
Essentially, super is considered as property in the event of a relationship breakdown, so like any other asset it can be divided between partners by agreement or court order. This includes marriage or de facto relationships, both heterosexual or same sex.
How is Superannuation viewed in a divorce. The Family Law Act 1975 generally views superannuation as property that should be split during a divorce. However, it is not exactly the same as other assets because superannuation is usually held within a trust – so it won't be converted into a cash asset.
The superannuation splitting laws allow separating couples to value and divide their superannuation after a relationship break down. Under the laws, one partner may split the amount remaining in their superannuation fund and make a payment to the other partner's superannuation fund after separation.
However, both married and de facto couples across Australia can “split” their superannuation benefits after separation. Superannuation splitting can be organised through a financial agreement, consent order or court order.
A 60/40 split in divorce refers to the partition of assets in which one party receives 60% and the other receives 40% of the marital assets. This division is not predetermined or standardised under Australian law; it depends on the particular circumstances of each case.
If you and your partner can't agree on how to split your super, you can seek a court order from the Family Court to make the decision on your behalf. Under the provisions of the Family Law Act, a court must be satisfied that any super split is just and equitable for both partners.
Couples hardly ever decide on a 50/50 divide, in reality. There is no predetermined percentage split allowed by the Family Law Act of 1975; each case will be handled differently. The most typical division, however, is a 60/40 split.
The spouse contributions tax offset
You must be married or in a de facto relationship. You must both be Australian residents. The receiving spouse's income must be $37,000 or less for you to qualify for the full tax offset and less than $40,000 for you to receive a partial tax offset.
You're entitled to ask your ex-partner's super fund to inform you how much they have in their super account. You can request this by filling out a form on the Family Court of Australia website or visiting your nearest family law registry – you may need to pay a fee.
In Case Of Divorce, Who Gets What, Australia? If the parties cannot decide how the assets are to be decided, it's left up to the family court to decide. As per the law, there's no strict formula for a divorce settlement in Australia. Contrary to popular perception, there's no 50-50 split rule.
The law in relation to superannuation provides that it is to be treated as though it were property of the parties. The court can make orders 'splitting' or 'flagging' superannuation interests. A splitting order splits the superannuation interest so that some of it is given to the other partner.
As the name suggests, a 70/30 divorce settlement means that one party receives 70 per cent of the assets, with the other party receiving 30 per cent from the pool. In the Family Law Act (1975), Section 79 gives the powers to court to determine how assets must be divided between two parties.
In summary, the court will consider the financial and non-financial contributions made by each party, the future needs of each party, and any other relevant factors when determining who gets the house in a divorce in Australia.
Actually, the family court uses what we call a 4 (or 5) step approach to determine who gets what in divorce or separation. Most commonly, people end up with 60/40 or even 70/30. Rarely they get half.
Superannuation does form part of your divorce because it is viewed as part of your property pool. Like every other asset, an agreement between you and your former spouse can divide it. Or, you can seek a court order if you cannot agree on your own. This is true of both marriages and de facto relationships.
Generally, superannuation does not form part of your estate unless the trustee of the superannuation fund pays your member 'death benefits' (the balance of your superannuation account) directly to your estate.
Your Superannuation balance is held on Trust and can be distributed according to your wishes, but you cannot allocate your Superannuation in your Will alone.
If the 60-year-old spouse has retired, they are eligible to withdraw their super as a tax-free lump sum, unlike the younger spouse. Splitting contributions may increase pension entitlements, as super assets of a younger spouse may not be assessed when in accumulation phase while they are under Age/Service Pension age.
If you and your ex did not finalise outstanding property matters before the time limits (1 year from the date of a divorce order or 2 years from the date of separation) by obtaining Court Orders or a BFA, either you or your ex may apply to the Court for property orders.