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Superannuation
Following separation people wish to make arrangement for property settlement and remember having heard somewhere that superannuation is now considered property for the purposes of family law property settlement. Sometimes people wish to reach and agreement about splitting their superannuation interests but do not know how to go about doing this. The purpose of this fact sheet is to provide you with some general advice about how the Family Courts deal with superannuation interests.
Superannuation splitting law
The superannuation splitting law treats superannuation as a different type of property to things like houses, cars and bank accounts. It lets separating couples value their superannuation and split superannuation entitlements, although this is not necessary for all people to do so. Each case is unique.
It is important to understand that splitting superannuation entitlements does not convert those interests into a cash asset – the entitlements are still subject to superannuation laws (for example, it is usually retained until retirement ages are reached). In simple terms, if you wish to receive part of your partner superannuation this does not mean you can readily convert it into case. Only in very limited circumstances will a super fund allow you to do so, and only then, only a limited amount (known as “hardship grounds”). You must check with your Journey family law solicitor first before thinking you can access any part of your partner’s super after property settlement.
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 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. The agreement is not registered in court and you must be careful that each of you retains a copy.
Journey family lawyers do not recommend that anyone enter into a “superannuation agreement” as there are many dangers and pitfalls involved in doing so. Ask your Journey family law solicitor about this if you require further advice.
■ seek consent orders to split superannuation (this our best recommendation), or
■ seek a court order to spilt superannuation (if you cannot reach an agreement with your former partner)
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, and we encourage you do to so. Journey Family Lawyers has a high success rate and reaching settlement in property matters thereby avoiding costly trials. You should ask your Journey Family Law solicitor 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 interests of both of you. You should provide the following forms to the trustee of the superannuation fund (we will usually do this for you):
■ 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 (and often does) charge a fee for providing this information, and this is paid when you send the forms. The Superannuation Information Kit provides the information and the forms you need. To obtain a copy of the Superannuation Information Kit go to www.familylawcourts.gov.au or call 1300 352 000, or ask your Journey Family Law solicitor.
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. This often occurs when one of you works in the public sector and is a member of a defined benefit scheme. The valuation process for such schemes is often very expensive. You should ask your Journey Family Law solicitor about valuing superannuation.
How superannuation 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
You have the option of either entering into a formal written agreement or obtaining a court order (by consent).
Obtaining a court order (our preferred method)
People obtain court orders about the division of matrimonial property in two ways:
■ by consent of the parties
If you and your former spouse have reached an agreement about property settlement (and superannuation), then a Form 11 Application for Consent Orders should be filed in the Family Court, accompanied by a consent order (often referred to as “Minutes of Consent” or “Terms of Settlement”) recording the agreement. The orders can then be made in chambers (by a judge alone) without either of you or your Journey Family Law solicitor attending court.
NB. In some rare circumstances the Court will require further information from the parties. Just because you have prepared Consent Orders and a Form 11 does not necessarily mean that it is the end of the matter. A court will only make the Orders you seek if they are “just and equitable” and are enforceable by law. The wording of superannuation splitting orders is complex and must meet strict legislative requirements. If your orders are not worded correctly they will be rejected by the registry and you will find yourself having to seek the advice of a solicitor. It is always wise to seek legal advice first, and is you wish to have super-splitting orders made, have your Journey Family Law solicitor prepare them for you to avoid delay and unexpected expense.
■ 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, provided that the Court is satisfied that the orders you seek are “just and equitable”.
Either way, you need to file an Application with the Court.
To start a case in the Federal Magistrates Court we must prepare for you and file an Application, an Information Sheet and a Financial Statement. The other party will file a Response and a Financial Statement. Significant preparation is required of your Journey Family law solicitor and it would assist us greatly if at your first consultation with us you provide us with copies of documents listed in “Fact Sheet 5 – documents to bring to Journey Family Lawyers for property settlement”.
The information from the superannuation fund trustee will help us to complete the court forms. You must disclose all superannuation, even if you do not intend to split superannuation payments.
Informing the superannuation fund
If you are seeking court orders about superannuation, we must tell the superannuation fund trustee about the orders you are seeking. We must ordinarily provide the Trustee with 28 days written notice of the orders we seek on your behalf. 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 immediately.
You should get legal advice from us before deciding what to do. Our team of solicitors can help you understand your legal rights and responsibilities, and explain how the law applies to your case. Our role is to help you reach an agreement with your former partner without going to court. That is always our first preference, but in some cases, it is simply not possible for parties to agree and if that is the case, we will assist you to prepare your court case.
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