WHAT'S YOUR SITUATION?
How will your super be divided?
The parties (usually during property or financial settlement), divide the superannuation between them (sometimes at the same percentage as the rest of the assets, but not always), depending on many factors including, the length of the relationship, and how much super was accumulated while the parties were together. You should also consider:
- To split superannuation in Western Australia you must have been married (de facto couples currently can not split superannuation in WA).
- In a de facto relationship, due to the WA legislation lagging behind all of the other states in Australia, splitting superannuation is not possible.
- The superannuation in de facto relationships is still considered as a financial resource but, it is dealt with differently. For example, sometimes one of the parties will retain a larger proportion of the other assets in lieu of the superannuation.
- When splitting superannuation for a married couple, a portion of the super is flagged into the other parties name for their benefit when they achieve retirement age.
Superannuation splitting can now only be achieved by way of a Court Order, or a Binding Financial Agreement. The process for either is complicated and requires advanced knowledge of Family Law and property settlement. If you would like to discuss your options for splitting superannuation call us today for some advice specific to your circumstances.
Defact couples will soon be able to “super split” in WA
The Federal Attorney-General Christian Porter has recently announced that de-facto couples in Western Australia will soon be able to split their superannuation interests in the same way married couples can. De-facto couples in WA are subject to the Family Court Act 1997, however the Family Law Act 1975 is soon to be amended with the legislative process expected to be completed in 2019 which will allow for de facto couples to super-split in 2020. All other States (except WA) referred their powers to the Commonwealth of Australia long ago which allowed for superannuation interests for de facto couples to be “split” along with all the other assets of the relationship. The new proposed amendments to refer power in WA (albeit in a ‘limited’ form) will allow WA to catch up with the rest of the Country regarding separating De-facto couples.
Current position – inequitable
Currently in WA, superannuation for de facto couples is considered a ‘financial resource’ of the person who’s name it is in rather than a ‘joint asset’ of the de facto relationship. This has led to an inequitable outcome for many de-facto couples in WA where the superannuation makes up the majority (or a large portion) of the asset pool. For instance; If the asset pool is made up primarily of superannuation in one of the parties’ names of say $200,000, and all the other assets have a combined value of $100,000, then although the Court may allocate all of the other combined assets to the party who’s name the superannuation is not in (i.e. 33%), the party who’s name the superannuation is in would still receive $200,000 (i.e. 66%) of the asset pool by retaining all of the superannuation because it is not currently capable of being ‘split’ in WA.
Inequitable result compounded
This inequitable result is further compounded in circumstances where the party who actually only received the $100,000 (i.e. 33% of the asset pool) is in fact at law entitled to more than 50% because of their ‘future needs’ requirements under section 75(2) of the Family Law Act 1975, for instance where they have the majority care of children of the relationship who are under 18 years old; or have been the major contributor of the homemaker and parenting contributions while their ex-partner was able to advance their career and now has a far greater earning capacity because of that.
Perth Family Law Centre welcomes the proposed amendments and we look forward to helping out de-facto clients achieve a more equitable result in property settlements in the near future.