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A guide to splitting super after a separation

A guide to splitting super after a separation

Dividing up your home, belongings and other joint assets, including splitting superannuation can be challenging, but there is information available to help you.

Ending a relationship can be tough, both emotionally and financially. And dividing up your home, belongings and other joint assets including splitting superannuation can be challenging.

Determining if, and how, super is to be divided is generally done through a superannuation agreement or court order.

A superannuation agreement

A superannuation agreement can be put in place before, during or after your relationship as part of a broader ‘binding financial agreement’.

Court order

If you don’t have a binding financial agreement in place, you can obtain a court order. There are two types of court orders:

1) Consent orders are appropriate for couples who have agreed how their property will be divided. Once a court has considered whether the agreement is fair, a court order makes it binding.

2) Financial orders are for those who struggle to agree how to divide their property. The court will consider a range of factors to determine how super and other property should be split.

The Family Law Act of 1975 specifies how super should be approached.

Step-by-step guide

1. Calculate the total value

It’s important to know how much is in your partner’s super account in order to help establish what can be agreed is a fair settlement.

You’re entitled to ask your partner’s fund to provide this. 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.

2. Seek legal advice

If you don’t have a binding financial agreement in place, seek legal advice to determine if you and your partner can reach an agreement or should apply for a court order so each partner’s contributions to the relationship are can be assessed.

Ask for a ‘payment flag’ to be placed on your super account and your partner’s. This prevents most withdrawals being made from the account prior to any super split occurring. A payment flag can be lifted by agreement or by a court.

Super isn’t necessarily split according to how much each of you contributed financially. For instance, contributions such as taking care of the children and the family home may be taken into account. A court may also consider the financial position that both parties will be in after the divorce or separation, which may affect how super is divided.

3. Split the super

Once you have a valid agreement or court order, you’re able to apply for your superannuation to be split. If you or your partner’s super balance exceeds certain thresholds, you may need to be separated for 12 months prior to being eligible to split super. 

You can generally establish a new account within the existing fund or transfer it to a new fund.

In some situations, it may not be possible or practical to split superannuation immediately. Where this is the case, a ‘payment flag’ may apply until a future time - for example when a retirement benefit becomes payable in the future - then benefits can normally be split.

After the super is split

If you have reached the age when you can access your super, these benefits become accessible in the same way as the rest of your super. Otherwise, your super will be held until you reach your ‘preservation age’, a minimum age set by law that you can check on the Australian Securities and Investments Commission (ASIC) MoneySmart website.

A financial planner can help you understand and plan for any possible impacts on your long-term finances.

Other ways to seek help

  • Family Court of Australia
  • ASIC 
  • MoneySmart

This document contains general advice. It does not take account any of your objectives, financial situation or needs. You should consider talking to a financial planner before making a financial decision. This document has been prepared by Commonwealth Financial Planning Limited ABN 65 003 900 169, AFSL 231139, (Commonwealth Financial Planning) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. Commonwealth Financial Planners are representatives of Commonwealth Financial Planning. Information in this document is based on current regulatory requirements and laws, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Commonwealth Financial Planning, its related entities, agents and employees for any loss arising from reliance on this document.