A question we often get from our divorcing clients is how long after divorce can you claim superannuation. In most cases, married couples can claim superannuation after divorce within 12 months, and de facto couples have 24 months to do so.
Here’s what you need to know about claiming superannuation after getting divorced.
What is Superannuation?
Superannuation is an amount of money an employer contributes to a fund during the working life of an employee which goes towards providing them a pension. These funds are only made available at retirement generally, although there are some exceptions where withdrawals can be made prior to retirement.
If you aren’t familiar with the ins and outs of superannuation, the ATO has a very helpful guide to superannuation on their website.
How Long After Divorce Can You Claim Superannuation?
Although applications can be submitted as soon as you have separated, there are limits to how long after divorce you can make a superannuation claim.
Married couples have up to 12 months from the date their divorce was granted to claim superannuation.
De facto couples have 24 months from their formal separation date to claim superannuation.
How Is Superannuation Treated in Divorce?
Although strictly speaking, divorce only deals with the termination of a marriage, under Australian Family Law, superannuation is considered an asset and forms part of the asset pool that can be split between a divorcing or separating couple.
The only way it differs from other fixed assets, is that the funds are held in trust and must comply with the fund’s terms and can only be released when they become due, usually at retirement.
Do You Have to Split Superannuation When You Divorce?
The quick answer is no, but as it forms an integral part of the pool asset, it can be split when you divorce. This however, can be a highly complex procedure and may require not only legal but financial advice as well.
Can We Decide on How to Split Our Superannuation or Do We Have to Go to Court?
You have 3 basic options on how to split your superannuation by mutual agreement.
- Evaluate your super and one party transfers an agreed portion to the other’s super fund, or if the super funds are accessible, to their account.
- Evaluate your super and leave them untouched but use the values to offset them against any other asset, such as the family home, a debt etc. as part of the overall division of property.
- Leave the super untouched and postpone your decision to a later date, such as retirement. A flagging order will prevent any party from making a withdrawal until that set date, or until the matter has been settled and the flag subsequently lifted.
It is important to remember that you will need consent from your superannuation fund, before superannuation splitting orders can be made.
Once you have reached an agreement, you can apply to the Family Court for a consent order. The Court must be satisfied that the agreement is fair and equitable. You could also make your agreement legally binding by drawing up a Binding Financial Agreement (BFA) but that requires both parties to have received independent legal advice.
If you cannot reach agreement on your own, you will have to go to Court where a Judge will make the final decision.
A copy of your BFA or consent order must be provided to the fund’s trustees to effect your payment arrangements.
How Will Superannuation Be Split in A Divorce?
Although there is no one set formula that applies to all, there are several factors that are taken into consideration when superannuation(s) are split in a divorce. These may include the following:
- The financial and non-financial contributions made by each spouse or partner during the marriage or relationship
- The length of the marriage or relationship
- The financial needs, resources and earning capacities of both parties
- The age and health of both parties as well as of any children’s needs
Superannuation is just one part of the overall asset pool that is split between the two parties, which must be seen to be fair and equitable before it can be approved by the Court.
How Do I Find the Value of My or My Partner’s Superannuation?
As an ex-spouse or bona fide de facto partner, you are considered an “eligible person” to apply to the super fund’s trustee for the value of yours or your partner’s superannuation.
Can Superannuation Be Claimed If It Is a Self-Managed Super Fund or Defined Benefits Scheme?
It doesn’t matter what type of fund you or your ex-spouse have – they can be industry funds, public sector funds, corporate funds, self-managed funds, or any other type of fund.
Claims can be made to both parties’ funds but the evaluating procedures can often be highly complex requiring the assistance of an experienced financial advisor.
Defined benefits schemes use a pre-set formula taking into account several factors including the length of employment and salary level calculated at retirement.
Self-managed super funds are managed by the members themselves and are often more complicated to evaluate and to process. All assets in the fund need to be added up and evaluated. Furthermore, if either of you are registered as trustees to the fund, you are legally obliged to act in their best interests and include them in the entire process.
Do I Need a Family Lawyer to Claim My Ex’s Superannuation?
Strictly legally speaking no, but as claiming your ex’s superannuation is only a part of the overall division of property in your divorce, it is usually recommended to at least consult with a family lawyer before making any decisions regarding how to split your assets fairly.
Besides, calculating the values of a super fund and following the correct procedure in order to make your claim, can be complex affairs and having a family lawyer on hand to guide you towards a fair and equitable settlement can mean settling faster and more amicably than dragging out the process for months or even years through the Courts.
Do you need legal help when it comes to settling your division of property and making a claim on your ex’s superannuation?
Get in touch with our family lawyers in Perth today for a free 15 minute information call, and find out how we can help you with your divorce and property settlement.
