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.
Superannuation is treated as property under the Family Law Act 1975 but it differs from other types of property because it is held in a trust. Superannuation splitting laws allow superannuation to be divided when a relationship breaks down.
Superannuation makes up a part of the asset pool, and so, if you find yourself wondering: Is my ex wife entitled to my superannuation? The short answer is yes. If you are married – after a divorce is finalised, your ex wife or partner is entitled to make a claim for your superannuation for up to a year.
While the super pool held by two parties is considered joint property, it does not mean that each party will walk away with a 50/50 split. The Family Court will typically consider what is fair and equitable for both partners. Things that they will consider include: What you brought into the marriage.
Options for splitting superannuation
A formal written agreement requires that both you and your former 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.
How much superannuation can I transfer to my spouse? With contributions splitting, the maximum amount you can transfer is the lesser of 85% of: your total concessional contributions for the period, including employer, salary sacrifice and deductible personal contributions and.
A 60/40 divorce split refers to a property settlement where one party gets 60% of the combined assets, while the other receives 40%. The combined assets of a couple are also known as the 'asset pool.
70/30 refers to one separated party getting 70% and the other getting 30% of the property pool. The “property pool” is all the assets and liabilities of the parties to the relationship. You may have heard about 70/30 divorce or property settlements in Australia – or even been told that it's a common outcome.
In summary, a wife in a divorce settlement in Australia is entitled to a fair and equitable share of the assets and property accumulated during the marriage. This may include a share of the family home, vehicles, savings, and investments, and any superannuation that has been accumulated during the marriage.
If you were in a de facto relationship, you must apply within two years of the date of separation. If you do not apply within these time frames, you will need permission from the court to apply for property orders.
We don't count you or your partner's superannuation in the income and assets tests, if your fund isn't paying you a superannuation pension. If your fund is paying you a superannuation pension, it is assessable as an income stream.
Any excess transfer balance amount must be removed from the retirement phase and will be subject to tax. So, this means that equalising super between spouses can maximise the amount that can be invested in the tax-free retirement phase (two limits are better than one).
A super splitting strategy allows single income families to share the ongoing accumulation of superannuation in a similar way to dual income families. Certain superannuation contributions can be split with your spouse, either within the same fund or to a different fund, providing your super fund permits it.
Ultimately, the court employs a high degree of discretion when considering what effect one party cohabitating with a new partner has on the property settlement. It all depends on the circumstances of the particular case.
(ii) The terms of splitting orders
For example, assume a couple has superannuation valued at $200,000 and it is to be split 50/50. The terms of orders to give effect to a split would be as follows: That orders 2 to 4 have effect from the operative time.
The sole applicant will need to pay a fee to legal professionals, and additional fees to serve the application to their partner. In this case, the partner who is being served with an application for divorce will not need to pay any fees.
Most property proceedings result in a division of 55 to 65% in favour of the economically weaker spouse, historically the wife, before payment of legal fees. Nevertheless, the outcome of your property settlement will depend upon your practical circumstances, judicial determination in this field being discretionary.
The only ground for divorce is that the marriage broke down and there is no reasonable chance that the parties will get back together. The Federal Circuit and Family Court of Australia (the Court) has the jurisdiction or power to deal with divorce under Part VI of the Family Law Act 1975.
Under the Family Law Act 1975, a person has a responsibility to financially assist their spouse, or former de facto partner, if that person cannot meet their own reasonable expenses from their personal income or assets.
How long after a separation or divorce can I make a claim for superannuation? If you were a party to a marriage, you must apply to the court for superannuation orders within 12 months of the date on which your Divorce Order took effect.
Inheritance is unfortunately not a protected asset and can be considered a marital asset and part of the overall property pool that needs to be divided upon separation or divorce.
Access a higher rate of government Age Pension
If one of you has substantially more super, you may not be able to access the Age Pension. By splitting super with your partner and reducing your super, you may be able to access more Age Pension once you retire.
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.