Divorce or separation and your super

Info for members
Insights
31 May 2022
5 min read

Find out how your superannuation is affected when you divorce or separate from a partner and learn what you’re entitled to under Australian family law.

In this article you'll find:

We understand that sometimes in life, not everything goes to plan. Divorce or separation from your partner can be a complicated process. There’s lots of considerations to keep on top of, and often there’s associated financial and legal challenges involved. Your superannuation is an asset, so it helps to know how it will be treated in a divorce process or separation.

Here we explain what happens to your super in a divorce or separation in Australia, when you can make a claim for super and what you’re entitled to.

What happens to Super in a divorce or separation?

Your super is treated as an asset in a divorce or separation, and similar to other asset types, it can be divided between you and your former partner by court order, or by formal agreement.

These family law rules apply to married and de facto couples, both heterosexual and same-sex. They don’t apply to de facto couples in Western Australia, where super isn’t considered property. However, this may soon change as legislation is currently being debated before the Western Australian Parliament to extend the family law rules to de facto couples in the state,

 

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How is Super split in a divorce or separation?

First, calculate the total value of super, including what’s in your former partner’s account. You can ask their super fund for this information by completing a Superannuation Information Kit. You can find this kit at the Family Court of Australia website.

The Federal Government passed a new law in 2021 that aims to make super more visible during family law proceedings, so you and your former partner can divide it fairly. This legislation allows you to apply to the court to request your former partner’s super information from the ATO. It applies to married and de facto couples, both heterosexual and same-sex – except in Western Australia where de facto couples aren’t covered.

If you and your former partner can’t mutually agree on how to split your super, you may want to consider seeking legal advice and applying for a court order.

Super doesn’t convert to cash following a split. Like any other super you have, it remains preserved until you meet a condition of release, such as reaching your preservation age.

 

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Do you have to split super in a divorce or separation?

You and your former partner can choose to defer the decision to split super to another time, or you could choose to leave yours and their super untouched altogether.

 

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What are you entitled to in a divorce or separation in Australia?

If you and your former partner agree with the division of your property and finances, you can formally document your agreement in either a consent order or binding financial agreement.

Consent orders are proposed orders which you and your former partner agree on and ask the court to formalise as court orders, whereas a binding financial agreement is a contract between you and your former partner. You won’t be able to enter one without each side first getting their own legal advice from an Australian lawyer.

If you are not able to agree, you could seek a court order, but it’s important to note that the court may not award a 50-50 split of super in a divorce or separation process. It will consider several factors in determining what you’re entitled to, including:

  • non-financial contributions to the relationship, like caring of children;
  • the financial position you and your former partner will be in after the divorce or separation; and
  • your dependents.

When the court makes its decision, it’ll make a court order that is binding on both parties.

 

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How long after a separation or divorce can you make a claim for Super?

You and your former partner could choose to defer the decision to split super as late as retirement. Waiting for an event such as retirement to split super is called a flagging agreement. This prevents a super fund from making payments out of the flagged super account until the flag is lifted. A flagging agreement can only be lifted by a court order or flag lifting agreement.

While this approach isn’t as common, it could be appropriate if you or your former partner is a Defined Benefit Division (DBD) member.

Super and divorce is a complex topic. We recommend you seek advice from a qualified financial adviser.

 

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In summary

Divorce or separation is a tough time, but familiarising yourself with Australian family law can help you access your fair share of super and stay on track to achieve a financially secure future. Even if you and your former partner decide to split yours and their super, it remains in preservation until you meet a condition of release.

 

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