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Divorce Split

Superannuation splitting orders are essentially orders made by the Family Court for one person’s superannuation entitlement to be split and a portion deposited into the other person’s superannuation fund.

The Family Court considers superannuation to be ‘property’ – even though you may have to wait years to receive it – and can make a splitting order in a property settlement between people who are or were married.

De facto couples can also make a splitting order, except in Western Australia where the Court does not have jurisdiction to make any orders relating to superannuation for unmarried couples.

Historically the Family Court was faced with the problem that one of the biggest assets someone had was out of reach of the Court, or one person would get property and the other would get superannuation.

Superannuation was considered to be a financial resource which, upon separation, the person who owned it would solely benefit from. The same issue is faced in reverse where the person receiving all the current assets has no financial support upon retirement. A superannuation splitting order is said to avoid these types of situations.

Typically superannuation splitting orders are more likely to be considered in longer term relationships where assets have blended and distinctions between separate assets are blurred.

A person’s earning capacity is particularly relevant as this in turn affects their ability to accrue a significant superannuation entitlement.

The Family Court has a wide discretion when deciding to make a superannuation splitting order. It must however always consider the overall assets and the division which is just and equitable.

It is also important to be aware that superannuation splitting orders take the value of the superannuation at the present date rather than the value of the superannuation at separation or any date in the future. Valuing funds is complex and you need to know how much a fund is worth before negotiating a split.

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