I’ve Never Worked Outside The Home – Am I Entitled To My Spouse’s Superannuation?

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Blog post by Kate O’Leary

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Superannuation entitlements are intrinsically linked to workforce participation. Often it is the case that women who have left the workforce to care for children, or who have reduced their hours of paid work will typically have much less superannuation than their spouse who has been able to maintain their investment in work.

With this in mind, superannuation splitting laws (introduced in 2002) allow superannuation to be divided when a relationship breakdown occurs.

Superannuation splitting laws apply to:

  • married or divorced couples who have not formally settled their property arrangements by a court order or a court-approved agreement;
  • de facto couples, in South Australia, whose relationships broke down on or after 1 July in 2010; and
  • de facto couples, in most States and Territories (excluding Western Australia), whose relationships broke down on or after 1 March 2009.

In the event of a property settlement following a relationship breakdown, superannuation is treated as property under the Family Law Act. It does however differ from other types of property because it is held in a trust.

Superannuation can be split by two processes – by either a superannuation agreement or an order of the court.

The rules relating to the splitting of superannuation are complex and it is an obligation for each party to seek legal advice before signing any agreement regarding superannuation. If legal advice is not sought, the splitting agreement will not be binding on the trustee of the superannuation fund.

Superannuation agreements, provided they comply with legal requirements, are binding. If an agreement is unable to be met, then the court is able to make an order as part of the property settlement about how any superannuation is to be split.

Under the superannuation splitting laws, an agreement or court order to split superannuation becomes an agreement for payment splitting. Splitting does not convert superannuation into a cash asset; it cannot be accessed until you reach a condition of release, such as retirement.

There are different ways in which superannuation can be split. It may be received as a lump sum (often known as a ‘payment split’) when it becomes payable (for example when retirement is reached), or as an ‘interest split’ where both parties receive an interest. In this case, the spouse receiving the new benefit can leave the super interest in the same fund, or transfer the interest into another fund.

Alternatively, parties to the relationship breakdown can choose to divvy up other assets of the relationship to take into consideration the value of the superannuation account rather than splitting.

For more advice on property settlements please contact Kate O’Leary at Culshaw Miller Divorce & Family Lawyers, Adelaide, on (08) 8464 0033.